– By Victoria Nelson –
How many vehicles do you think fleets buy each year? Is your guess 20% of all new vehicles sold? Would you be surprised to learn that business, government and rental buyers made up 52% of total new car purchases in 2017? That’s 584,895 vehicles and this figure doesn’t include the 36,849 heavy commercial vehicles that were purchased.
The VFACTS data is broken down into four buyer categories (Private, Business, Government and Rental) so its easy to track which segment is growing and the split between private or fleet buyers. Now some of the Business buyers may be small businesses or novated leasing. So its not what they call in Europe ‘Pure Fleet’. But it costs more to nominate a vehicle for business registration and no one would do this unless there was some commercial activity being undertaken.
Private and Government buyers were down (2.5% and 4.7%) while Business was up slightly (2.6%). The big change was sales to the rental market which increased by 10,963 vehicles or 18.2%.
Rental buyers lead the way by purchasing a similar amount of passenger cars but loaded up on SUVs and light commercial vehicles. There’s no surprise that they have switched to SUVs because rental companies were traditionally used by local manufacturers to offload excess production in the large and medium car segments. Some of this was still happening early in 2017 though when you pick up a rental from any airport in 2018 you’ll notice a significant change to the fleet composition.
But old habits take a while to break and rental numbers were up 44.9% in December compared to last year. If I had to guess looking at the manufacturer increases in the same month, it looks like Holden and Mitsubishi may have been offloading some older stock to start the new year fresh.
Business buyers have signalled to the market they are no longer interested in passenger vehicles. The drop was 8.4% compared to 2016 while SUVs were up 8.9%. Of course when fleet managers analyse Whole of Life Costs or a Fit For Purpose Matrix, small or medium cars will still have a place in most business operations. But the private used buyer now wants an SUV. So the strong resale, improvements in ride comfort and safety will continue to drive demand.
Light commercials were up by 8.6% and all buyer categories were after these vehicles following the trend for everyone to pretend they live in the country by driving a dual cab 4X4 ute. It makes sense for business (up 9.9%) and rental (up a massive 44.5%) – but why do private buyers want a light commercial vehicle? I don’t get it. Approximately 20% all new vehicles were light commercials so I hope they are still trending in three to four years when they’re offloaded by fleets.
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