Small car sales hit the skids in 2025 as SUV and ute mania accelerates in Australia

Australians secure nearly totally abandoned minute and midsize autos — deem hatchbacks and sedans — in favour of SUVs and utes, which together accounted for 80 p.c of current automobile sales in 2025.

The shift isn’t current: SUVs first outsold autos here in 2017. What is placing is that the SUV and ute takeover is quiet accelerating in Australia.

In 2025, fewer than 165,000 passenger autos were sold across all shapes, with SUV sales (733,831) and utes (273,229) outselling ‘identical old’ autos by more than six to one.

By some distance the supreme-promoting objects in Australia closing 300 and sixty five days were either SUVs or utes, led by the Ford Ranger pick-up (56,555 sales) and Toyota RAV4 midsize SUV (51,947).

Genuinely, SUVs and utes occupied the head 15 spots on the sales charts closing 300 and sixty five days, with the Toyota Corolla (16^th station, 18,968 sales) being the head-promoting passenger automobile.

Passenger autos are sliding into enviornment of interest territory with 2025 the biggest drop but

It has been a punishing 15 years for passenger automobile sales. Motivate in 2010, Australians took offer of 592,122 non-SUVs, but by 2017 — the 300 and sixty five days SUVs numerically bested passenger autos — deliveries of hatchbacks, sedans, wagons and two-doors had fallen to 449,949.

Fleet forward to 2025, and the passenger-automobile class has shrunk considerable extra, dropping from a result of 211,073 in 2024 to 164,847 closing 300 and sixty five days. It’s the biggest fall for the class but.

The brutal records point helps to showcase why automobile manufacturer product planners secure concentrated so considerable energy on importing more SUVs as quiz for crossovers appears insatiable.

Except for the ‘upper trim’ SUV segment, which incorporates objects esteem the Toyota LandCruiser 300 Series and Nissan Patrol, sales of all SUV courses grew in Australia across 2025.

It’s now a no-contest discipline. SUVs accounted for about 60 p.c of market portion closing 300 and sixty five days, with utes making up a extra 20 p.c. By comparability, passenger automobile sales are languishing down at roughly 13 p.c market portion.

Minute autos became essentially dear, and SUVs can look esteem better value

Ten years within the past, a base Mazda 3 Neo auto cost $22,490 plus on-toll road funds whereas an the same Toyota Corolla Ascent became as soon as $22,230 + ORCs.

Now, doubtlessly the most cost-effective Mazda 3 Pure five-door is $31,310 + ORCs (+39%) whereas the Corolla Ascent hatchback of nowadays is $32,110 + ORCs (+44%).

These jumps in label secure skated before inflation within the intervening period — but there would possibly be an right structural reason minute autos became more durable sells in Australia.

The value of enforcing security (mostly ADAS aspects), current infotainment, cybersecurity security and emissions compliance is basically a fastened cost for carmakers no topic the car in ask.

For a minute automobile, most continuously sold with thinner profit margins, these fastened funds bite more mighty. On an SUV with the next transaction label, brands can amortise the prices more conveniently whereas loading an SUV with cheaper add-ons esteem larger screens or heated seats to lower decal shock.

Now that thousands and thousands of Australians are frail to getting about in SUVs, more moderen Chinese entrants secure adopted swimsuit. While brands esteem MG and BYD construct secure passenger automobile choices, their SUV portfolios are greater and customarily pitched more aggressively on label than established competitors.

NVES, or a future weight tax, would perhaps per chance return minute autos to recognition

A consequence of Australia’s relish of SUVs and utes is that singles, couples and families are shifting into greater and heavier autos faster than ever.

The march into heavier transport increases toll road wear, burns by tyres and brakes more fleet and would perhaps presumably worsen pedestrian outcomes in crashes, although more moderen objects usually secure better accident avoidance tech.

Heavier autos additionally use more energy (be that petrol, diesel or electricity) and that’s a spanner within the works of Australia’s federal emissions targets.

The Albanese authorities’s Original Automobile Efficiency Long-established (NVES) is designed to push manufacturers toward lower CO2 outputs on paper and this rewards sales of EVs and trudge-in hybrids.

However NVES does one way or the other penalise extra mass. That would perhaps per chance be a job left to inform registration systems, which construct no longer for the time being punish heavy autos in a financially critical manner.

NVES is up for overview later in 2026, and one capacity tweak would perhaps per chance be to consist of a blended CO2 and weight measurement in deliver to steer sure of a perverse consequence the put aside carmakers meet CO2 targets by pumping heavy batteries into even heavier autos.

European countries are already exploring suggestions about how to tax autos the utilization of each and each CO2 and weight measures. France, for instance, now levies extra taxes on all autos above 1600kg, incentivising all carmakers to hurry weight efficiency — combustion, electric or in any other case.

Even with out a weight convey, the more and more strict CO2 limits embedded in NVES would perhaps per chance additionally quiet steer the Australian market toward smaller and more efficient autos, as carmakers will fetch it cheaper to comply if they steer clients some distance off from thirstier objects.