Australia Car Market to Reach USD 23.45 Billion by 2033, Growing at 1.00% CAGR

Australia Car Market Overview

Market Size in 2024: USD 21.30 Billion

Market Size in 2033: USD 23.45 Billion

Market Growth Rate 2025-2033: 1.00%

According to IMARC Group's latest research publication, "Australia Car Market Size, Share, Trends and Forecast by Vehicle, Propulsion, Sales Channel, End Use and Region, 2025-2033", The Australia car market size was valued at in USD 21.30 Billion 2024. Looking forward, IMARC Group estimates the market to reach USD 23.45 Billion by 2033, exhibiting a CAGR of 1.00% during 2025-2033.

How AI and Innovation are Reshaping the Future of Australia Car Market

• Revolutionizing Autonomous Driving: Tesla launches Full Self-Driving (Supervised) capability in Australia with Model 3 and Model Y vehicles, while lane-keeping assist and autonomous emergency braking become mandatory features from March 2025.

• Powering EV Infrastructure: AI-optimized charging networks expand nationwide with real-time monitoring systems, supporting record 10.3% EV market share as Tesla delivers 14,156 units and BYD achieves 23,355 deliveries in first half 2025.

• Enhancing Connected Technologies: Vehicle-to-everything (V2X) communication systems integrate AI and IoT capabilities for predictive maintenance alerts, personalized driving settings, and real-time navigation across connected SUV and sedan segments.

• Advancing Safety Systems: Intelligent semi-autonomous features including adaptive cruise control gain widespread adoption, with Hyundai SmartSense™ providing 11 autonomous safety features across forward collision avoidance and blind-spot warning systems.

• Optimizing Fleet Operations: Commercial vehicle operators deploy AI-driven connected systems to reduce operational costs and improve efficiency, leveraging 5G networks for advanced services and fleet management capabilities.

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Australia Car Market Trends & Drivers:

The Australian car market is experiencing a transformative shift toward electric vehicles, driven by escalating environmental awareness and robust government support mechanisms. EV sales surged to record levels in 2025, with battery electric and plug-in hybrid vehicles capturing 10.3% market share, substantially outpacing the first half of 2024. Tesla delivered 14,156 EVs while BYD achieved 23,355 deliveries during the initial six months of 2025, demonstrating accelerating consumer adoption. Government incentives including fringe benefits tax exemptions, subsidies, and state-level rebates are decisively tilting cost-of-ownership calculations toward plug-in choices. The rapid expansion of charging infrastructure through public-private investments ensures enhanced accessibility, addressing previous range anxiety concerns. Manufacturers are introducing diverse models with improved battery efficiency and extended ranges, from luxury brands like Tesla, BMW, and Porsche targeting premium segments, to affordable options from BYD and MG appealing to budget-conscious buyers. New South Wales leads with 28.50% market share, while Queensland demonstrates fastest growth at 35.20% CAGR, reflecting regional variations in EV adoption patterns.

Consumer preferences are decisively shifting toward SUVs, which dominate the Australian automotive landscape through their combination of spaciousness, versatility, and performance across diverse terrains. Australian households actively engaged in outdoor pursuits favor SUVs for long road trips, camping expeditions, and family transportation needs. Manufacturers have responded by introducing comprehensive model ranges spanning compact crossovers to luxury SUVs, incorporating hybrid and electric powertrains that blend fuel efficiency with traditional SUV benefits. Modern SUV designs feature improved fuel economy, enhanced handling, and sophisticated safety technologies that attract urban buyers beyond traditional off-road enthusiasts. The practicality of SUVs, combined with stylish contemporary designs and rising affordability across price segments, reinforces their market dominance. This trend aligns with growing disposable incomes among Australian consumers, who increasingly allocate resources toward mid-to-premium vehicle segments featuring advanced technological capabilities and luxury amenities, supported by enhanced financial security and expanding middle-class purchasing power.

Connected car technologies are fundamentally reshaping the Australian automotive experience through integration of AI and IoT-enabled smart capabilities. Features including real-time navigation, advanced in-car entertainment systems, and vehicle-to-everything (V2X) communication have transitioned from premium options to standard equipment in new models. Manufacturers leverage artificial intelligence for predictive maintenance alerts and personalized driving settings that enhance both safety and convenience. The demand for connected vehicles is particularly strong among younger, tech-savvy demographics valuing seamless integration of digital technologies into daily lifestyles. Fleet operators and commercial vehicle owners adopt connected systems to optimize operations and reduce costs, accelerating technology adoption across segments. Semi-autonomous features including adaptive cruise control and lane-keeping assist gain widespread acceptance, with autonomous emergency braking and lane-keeping assistance becoming mandatory requirements from March 2025. The expansion of 5G networks nationwide enables advanced connected car services, while car subscription models offer flexible access alternatives to traditional ownership, appealing especially to urban residents seeking convenience without long-term commitments.

Australia Car Industry Segmentation:

The report has segmented the market into the following categories:

Vehicle Insights:

• Hatchback

• Sedan

• SUV

• Sports Car

• Others

Propulsion Insights:

• Gasoline

• Diesel

• Electric

• FCEV

Sales Channel Insights:

• Peer-to-peer

• Franchised Dealer

• Independent Dealer

End Use Insights:

• Commercial

• Ridesharing and Taxi Services

• Rental Car Services

• Corporate Fleet

• Individual

Breakup by Region:

• Australia Capital Territory & New South Wales

• Victoria & Tasmania

• Queensland

• Northern Territory & Southern Australia

• Western Australia

Recent News and Developments in Australia Car Market

• August 2025: Tesla launches Full Self-Driving (Supervised) capability for Model 3 and Model Y vehicles in Australia, marking significant advancement in autonomous driving technology despite regulatory limitations on fully autonomous operation.

• August 2025: BYD Sealion 7 emerges as top-selling battery electric vehicle with 5,183 units sold year-to-date, demonstrating strong Chinese manufacturer presence alongside established brands in rapidly evolving Australian electric vehicle landscape.

• July 2025: Australian EV sales surge to record 10.3% market share with Tesla and BYD dominating, as Electric Vehicle Council reports strong first-half performance exceeding 14,000 additional battery electric and plug-in hybrid deliveries compared to 2024.

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

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