Australia Automotive Market Report and Forecast 2025-2034

According to this report, the Australia automotive market size is projected to grow at a CAGR of 5.9% between 2025 and 2034. Aided by the rising demand for electric vehicles (EVs) and growing advancements in automotive technology, the market is expected to grow significantly by 2034.

The rising demand for fuel-efficient and environmentally friendly vehicles is driving the Australia automotive market growth. With rising concerns over carbon emissions and climate change, the government has introduced stringent emission regulations and incentives for electric vehicle adoption. This has accelerated the shift towards hybrid and electric vehicles, with key players investing in expanding their EV offerings and charging infrastructure.

The increasing awareness of environmental sustainability and the Australian government’s commitment to reducing carbon emissions have led to a surge in EV adoption. This is one of the key Australia automotive market trends. With incentives such as rebates, lower registration fees, and grants for EV buyers, more consumers are shifting away from internal combustion engine (ICE) vehicles. Automakers are expanding their EV portfolios, and infrastructure investments in charging stations are further supporting this transition.

Modern vehicles are incorporating advanced driver assistance systems (ADAS), autonomous driving features, and AI-powered diagnostics, significantly improving safety, efficiency, and user experience. Innovations like connected car technology, vehicle-to-everything (V2X) communication, and smart infotainment systems are becoming standard in high-end and mid-range vehicles. Australian consumers are showing a strong preference for technologically advanced cars, thereby fuelling the Australia automotive market expansion.

Australian consumers have shown a strong preference for SUVs and utility vehicles (UTEs) due to their versatility, off-road capabilities, and spacious designs. Automakers are catering to this demand by expanding hybrid and electric SUV line-ups, making them more fuel-efficient and environmentally friendly. This trend is particularly strong in regional and suburban areas, where consumers require vehicles suited for long distances and rugged terrain. This is increasing the Australia automotive market revenue.

Sustainability is becoming a major focus in the Australian automotive industry. Automakers are shifting towards lightweight materials, recyclable components, and alternative fuels to reduce the carbon footprint of vehicle production. Hydrogen fuel cell vehicles (FCVs) are also gaining traction, with manufacturers like Toyota and Hyundai investing in hydrogen-powered transport solutions. This is one of the key Australia automotive market trends.

Due to economic fluctuations and rising new car prices, the used car market in Australia is booming. Consumers are opting for pre-owned vehicles due to their affordability, and dealers are leveraging digital platforms to enhance the used car buying experience. The surge in online marketplaces, such as CarSales, CarsGuide, and Gumtree, has made it easier for buyers to access certified pre-owned vehicles with warranties. This is accelerating the Australia automotive market development.

The rise of ride-hailing services (e.g., Uber, Ola) and car-sharing platforms (e.g., GoGet) has transformed urban mobility in Australia. These services are reducing personal vehicle ownership rates in metropolitan areas, hence encouraging the development of affordable and fuel-efficient fleet vehicles. Automakers are responding by designing cars specifically for shared mobility, focusing on durability, low maintenance, and connectivity features.

As per the Australia automotive market analysis, the demand for premium and performance-oriented vehicles is increasing in Australia due to rising disposable incomes and changing consumer preferences. Brands such as BMW, Mercedes-Benz, and Tesla have experienced strong sales growth, particularly in the electric and hybrid luxury segments. Consumers are seeking high-tech features, superior comfort, and sustainability, driving the expansion of the luxury vehicle market.

The Australia automotive market outlook looks promising, with increasing investments in electric vehicles, advancements in autonomous technology, and a shift towards sustainable transportation. Government policies promoting clean energy and consumer preference for technologically advanced vehicles will play a crucial role in shaping the market's trajectory.

Market Segmentation

The market can be divided based on vehicle type, engine type, and region.

Market Breakup by Vehicle Type

• Passenger Cars
• Commercial Vehicles

Market Breakup by Engine Type

• Electric Vehicle
• Hybrid Electric Vehicle
• Plug-in Hybrid Electric Vehicle
• Mild Hybrid Vehicle
• Natural Gas Vehicle
• Fuel Cell Electric Vehicle
• Diesel Vehicle

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Competitive Landscape

The report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the Australia automotive market. Some of the major players explored in the report are as follows:

• Volkswagen Group Australia Pty Ltd
• Hyundai Motor Company Australia Pty Limited
• Ford Motor Company of Australia Pty Limited
• Toyota Motor Corporation Australia Limited
• Volvo Car Australia Pty Ltd
• RVDA Pty Ltd
• Others