Australia’s Car Crisis: How Economic Uncertainty is Driving Motorists to the Brink
- A staggering 87 per cent of Australians believe now is a bad time to buy major household items, including cars, as the country teeters on the edge of recession.
- The number of people planning to buy a new car in the next four years has plummeted by 4 per cent since 2023, with SUVs emerging as the only bright spot in a declining market.
- China is now the number one source of new cars for Australia, with sales surging by over 60 per cent in the first four months of the year.
- Used car demand remains strong, with one in four Australians considering a purchase in the next four years, but even this market is showing signs of strain.
Australia’s car industry is facing an unprecedented crisis, with economic uncertainty and a cost-of-living squeeze driving motorists to the brink.
A devastating Roy Morgan research survey of 65,000 people has revealed that only 13 per cent of Australians believe now is a good time to buy major household items, including cars.
This is a stark contrast to the 49 per cent who say it’s a bad time, with many opting to tighten their purse strings as the country teeters on the edge of recession.
The survey’s findings are a stark warning for the automotive industry, with the number of people planning to buy a new car in the next four years plummeting by 4 per cent since 2023.
This decline is not limited to any one segment of the market, with sales of large vehicles such as utes and four-wheel-drives dropping in the last 12 months.
Even the previously resilient sports car market has not been immune, with sales falling by nearly half between April 2025 and April 2026.
However, amidst the gloom, there is one bright spot – SUVs.
The Roy Morgan data shows that SUVs have climbed in popularity between March 2023 and March 2026, with the number of people considering a passenger car, such as a Toyota Corolla or Camry, falling.
This shift in consumer preference has been seized upon by Chinese car manufacturers, who are now the number one source of new cars for Australia.
BYD has climbed to second place in the manufacturer standings behind Toyota, while Chery’s Tiggo 4 compact SUV is a firm fixture in the industry’s top 10.
Analysis: What This Means for Australia
The Roy Morgan survey’s findings have significant implications for Australia’s economy and national security. As the country’s car industry struggles to stay afloat, the flow-on effects are being felt across the entire economy.
The decline in new car sales is not only a concern for the automotive industry but also for the broader economy, with potential job losses and reduced economic activity.
Security analysts say that the increasing reliance on Chinese car manufacturers also raises concerns about national security, with the potential for Chinese companies to dominate the Australian market.
Law enforcement insiders warn that the shift towards used cars could also have implications for public safety, with older vehicles potentially being less safe on the roads.
Industry observers believe that the trend towards hybrid vehicles in the used market is a positive sign, but also note that the number of hybrid cars available for sale has fallen significantly between January and April, indicating a shortage of supply.
Used car demand remains strong, with one in four Australians considering a purchase in the next four years.
However, even this market is showing signs of strain, with the Australian Automotive Dealer Association data revealing that the number of hybrid cars available for sale has fallen significantly between January and April.
As the economy continues to struggle, it remains to be seen whether the used car market will be enough to sustain the industry.
