Skid game

2024 was a record year for car sales. Seven of the top 10 brands grew share, but the next tier down, from 10-20 saw double digit drops from established brands like Subaru, Audi, Volkswagen, Mercedes and Lexus amid shifting market dynamics. Tesla also recorded its first ever steep decline as carmakers brought electric vehicles to market en masse.

2025 could see pressure increase as new entrants bid to squeeze out incumbents and regulatory changes on emissions and tax breaks meet head on with consumer demand and global product portfolios.

The upshot is that over the next 12-18 months, per BMW marketing boss Alex McLean, “some of the longstanding brands may be challenged” and some of the arrivistes may likewise struggle. “Not necessarily everyone will be there.”

Which leaves the market facing challenges on multiple fronts – and brand investment likely to require substantial increases across the board. How that investment manifests in traditional media is shifting per analysis of TV and VOD campaigns across 2024, per data compiled by Adgile media (below). Meanwhile, some carmakers are shifting from traditional mass media product campaign launches to master brand platforms backed by first party data-led sales.

SOV shifts

According to Adgile Media founder Shaun Lohman, the charts above “are based on Adgile’s automated content recognition tracking of every linear TV ad spot using OzTAM data to index year-over-year SOV shifts, while VOD SOV is calculated from over 5 billion video impressions annually; both dealership and corporate adverts are included to capture overall brand exposure accurately.”

Per Lohman: “One thing to note is that we’ve included both dealership as well as corporate adverts – to give an accurate reflection of brand exposure.”

Left chart – brand-level breakdown

• The vertical axis represents the shift in VOD share of voice.
• The horizontal axis represents the shift in Linear share of voice.
• The size and colour of each brand indicate the shift in market share (both volume and percentage, with volume weighted 3x more). 

Right chart – quadrant averages

• This chart shows the average values for all brands within each quadrant.
• It provides an overall market view but does not exclude outliers—all brands are averaged.

SOV rankings

The tables below show the year-over-year (YOY) shift in share of voice (SOV) each brand has experienced across both linear and VOD – this movement determines their quadrant, according to Lohman. “Additionally, we’ve included each brand’s YOY VFACTS [industry sales data] performance, reported as both percentage change and raw sales (+/-).

“To provide further context, we’ve also ranked each brand based on its VFACTS performance. Rankings often help normalise comparisons, particularly when dealing with major players like Toyota alongside smaller brands like Porsche.”

Lohman says some of the outliers are easily explainable, e.g.

• MG had a huge 2023, making 2024 a tough year to follow.
• Polestar faced stock issues.
• Porsche operates at a much smaller volume, among other factors.
• There are also broader media trends to consider, such as the overall market shift toward VOD, as well as one-off events like the Olympics and Toyota’s sponsorship.
• Plus, BYD comparator lacking as it only appeared on TV from last year.

“We believe the key takeaway is valid,” per Lohman. “Brands should migrate spend away from linear TV carefully, ensuring that VOD investments serve as true replacements – matching linear in quality, placement, targeting, and delivery.”

Aggressive intent

BYD posted 65 per cent sales growth for 2024. Delivery data for January suggests a sluggish start to the year – but it doesn’t show the true picture. Kate Hornstein, marketing boss at BYD’s Australian distributor EV Direct, says January orders “have likely been a record” – there’s just lag at play.

“We’ve definitely had some challenges” she says, citing port strikes, “so getting some of the new stock to market has been delayed. But the number of orders placed in January is unheard of.”

She’s bullish on 2025 as BYD eyeing a big bite of the ute market.

“We’ve set ourselves some very aggressive targets, because we really back the product that’s coming to market,” says Hornstein. “Twenty per cent of the cars sold in Australia are utes. To succeed here, you really need a vehicle in that segment.”

Hence the Shark 6 plug-in hybrid ute.

BYD last year ramped up marketing spend 500 per cent to build awareness for the brand, the broader EV category and “the new technology coming out of China”, per Hornstein. “To some degree that legwork has been done … but it very much felt like we were leading that charge.”

BYD globally has dethroned Tesla in volume terms. Locally the firm has repeatedly stated intent to usurp Toyota (241,141 sales in 2024) in the next few years. Hornstein is less outspoken than her boss, mooting “an ambition” to this year crack the top ten. On 2024 data, that would require BYD to notch circa 45,000-50,000 sales, “though that relies on the other [top] brands not growing at a similar rate”.

That’s what BYD aims to ensure. It plans to more than double dealerships from 40 to 100 sites by the year-end. Alongside new category entry, there’s increased marketing investment via new sponsorships and channels, per Hornstein.

“We’ve seen examples internally that some of the legacy brands are feeling the potential threat of us stealing market share in certain categories. Utes – I’m sure some of the other brands where 40-50 per cent of their sales are coming from these segments … might [now] be exploring other variants,” she suggests. “But I’m not going to say that we’re in a threat to their entire line-up.”

Utes make up 52 per cent of Ford’s Australian sales. But it may be that fellow Chinese manufacturers LDV (42 per cent) and GWM (41 per cent) are more likely targets.

Mitsubishi is in the same ute ballpark at 36 per cent of total sales. Isuzu could be most exposed to increased competition with utes making up 75 per cent of local sales. (Toyota sells the second highest number of utes behind Ford, but utes make up 24 per cent of its overall sales mix.)

Hybrid pivot

BYD’s Shark 6 only started deliveries last month – but Hornstein says the plug-in hybrid EV ute and PHEV stablemate the Sealion 6 SUV will “make up the majority of our sales in entirety, well over 60 per cent.”

Which means BYD will flip from a majority ‘pure’ electric vehicle manufacturer to a majority hybrid manufacturer.

Growth in ‘pure’ battery electric vehicles, or BEVs, softened last year, up circa 4 per cent to 91,000 while plug in hybrid (PHEVs) sales doubled to 23,000 units. BYD sold more than a quarter (6,198) of those PHEVs versus its 14,260 BEV sales.

BYD’s growth targets indicate an ambition to sell circa 30,000 PHEVs locally in 2025.

“I think it’s just an indication of where customers’ appetite for EVs are in this market – they like the safety of having hybrids,” says Hornstein.

Softening BEV growth is largely due to range concerns and a lack of public charging infrastructure for pure EVs in Australia, with additional headwinds around resale values. State support has also been wound back.

But fundamentally people like having the best of both – PHEVs with battery-only ranges upwards of 70kms mean drivers can do the daily commute in electric mode, massively cutting fuel bills, using the petrol engine for longer journeys.

“Customers across every segment are trying to reduce their cost of living,” per Hornstein. Hence PHEV being “an absolute game-changer in our line-up”.

“Deliveries for the Sealion 6 started in June. So banking only seven months of sales data it ended the year as the number one PHEV in the country; it became the number one model in the range.

“Now we’ve launched the Shark 6 ute and we have over five and a half thousand orders in the bank that we are working to deliver,” she says.

“Those kind of quantities alone would position these vehicles as top one and two vehicles in the range. So it’s clear that PHEV is where the customers are.”

B2B shifts?

To date PHEVs have benefitted from salary sacrifice tax breaks that allow company car drivers to lease a car and have the costs – including fuel, servicing and insurance – taken out pre-tax provided the car comes in under the Luxury Car Tax threshold of $91,387.

The upshot is thousands of dollars a year in savings, hence Australia being one of the most active markets for novated leasing globally – with EVs and PHEVs powering rapid leasing growth and carmakers increasingly B2B focused.

But change is afoot. From 1 April, only pure EVs will qualify for the Fringe Benefits Tax exemption, which could see business demand swing away from PHEVs in the company car market. Hornstein says BYD is disappointed to see the PHEV exemption go, but whether it will effect overall demand is not clear-cut.

“It’s difficult to attribute demand to a single incentive … I’m hesitant [to call the FBT impact] because everyone’s reason for buying a car is different; everyone’s financial situation is different,” she says. “It’s a consideration, but my focus is really on educating the customer on the long term cost of ownership [benefits].”

Price lever

BMW has capitalised on the boom in novated leasing, which helped propel EV sales to 30 per cent of its total sales in 2024. Its iX1 and i4 SUVs delivered the lion’s share, followed by the iX2 and iX3 – all with variants deliberately priced under the Luxury Car Tax threshold.

While Fringe Benefit Tax changes will affect the B2B market, BMW marketing boss Alex McLean likewise sees “an incredibly high share of PHEVs [across the market] this year, regardless of that incentive going.”

(PHEVs currently make up just 2 per cent of BMW’s sales, though McLean sees that growing markedly on the back of the imminent launch of the X3 PHEV SUV.)

Eighteen months ago McLean said the carmaker had “to turn into almost a B2B-style marketing department” while eyeing the LCT price threshold in order to tap tax break-driven demand, given novated leasing was “about ten per cent of the entire market,” and has since increased.

Upweighting B2B focus meant working more closely with novated leasing companies, which has paid off, helping BMW maintain growth – up 1 per cent in 2024 versus category rivals like Audi and Mercedes, -19 and -18 per cent respectively.

“We definitely saw the opportunity as a premium brand that if we could get pricing below that [luxury tax] threshold, it would have an impact. When you look at some of our main competitors – double digit reductions year on year – the difference for us was those EVs.”

But from a marketing perspective, chasing B2B sales via salary sacrificing schemes is “incredibly difficult”, per McLean. “Carmakers can’t do tax advice.”

Behind Italy, he says “Australia is apparently the highest user of personal accountants for tax [globally]. So even though there are incentives, it’s so bloody complicated … People switch off – and that has been a challenge over the last two years.”

Meanwhile the rest of the market has caught on.

“A few years ago you would never hear about novated leases. Now on the way to work you’re being bombarded on the radio by all the leasing companies.

“So as much as we have leaned into B2B, it is almost like those B2Bs are leaning back into B2C,” he says.

That said, he thinks there is more B2B juice to squeeze via pure battery electric vehicles, “and that will be an ongoing focus.”

Smoke signals

For 2025, all manufacturers will be scrambling to boost EV volumes due to the New Vehicle Efficiency Standard (NVES) now in force.

The legislation threatens steep penalties for carmakers that blow CO2 budgets applied in aggregate across their model mix – at $100 per gram. That means brands with few EVs and a lot of diesel utes and SUVs must quickly adjust their portfolios or risk paying multimillion dollar fines.

Alternatively they can buy credits from rivals like Tesla, Polestar and BYD, which will have plenty to spare and with the likes of Tesla making significant revenues from emissions standard trading globally. Whether brands locally will choose to pay fines over boosting a competitor remains to be seen. But the upshot is adjust portfolio mixes or hike prices to cover the cost.

Marketing GM Dean Norbiato thinks Kia will come in under the threshold – despite expecting big numbers for its first ute, the diesel-powered Tasman. He’s forecasting another record year for the brand after notching 7.4 per cent growth in 2024.

Norbiato said the firm expects its 2025 sales mix to be 75:25 combustion engine to electric and hybrid, with pure EV’s making up about 12.5 per cent, where novated leases are “extremely important” in driving B2B EV sales. The new EV5 and EV3 are expected to drive the bulk of electric volume and thereby help meet the NVES limits with some headroom.

“Federal election notwithstanding, the NVES coming in will be the biggest catalyst for change this industry has seen for a very long time. We’ve done the maths; we’re working very closely with the global team to keep the brand in the positive [side of the line] so we should be in an advantageous position.”

Norbiato said other big brands will be less confident.

“I would say the NVES is definitely a catalyst for growth for EVs. How the market reacts to that with regards to offsetting penalties and buying credits will be something to monitor.”

Brand booster

Given the incentive to sell more EVs amid increasing competition, an increase in brand investment appears likely across the board.

“Brand will be a strong player in the next 12-18 months,” per BMW’s McLean. “With the amount of new players that have arrived here, not necessarily everyone will be there in 12-18 months time. It might not work out for some of the new players – but some of the longstanding brands may also be challenged” he warns.

“So I think brand storytelling – of the past, the present, into the future – will be critical for us and critical for many brands.

“For those that don’t consider the strength of their brand, there could be some challenges.”

Hence carmakers seeking efficiencies in how they launch individual products to recycle spend into master brand strengthening.

“That was exactly our approach with electric vehicles,” says McLean. “We’ve just had one of our busiest years on record in terms of new car launches. At the end of 2023 we launched the new X1, which was our number one seller last year. We didn’t launch it with a campaign, we launched it with a strong first party data play.”

BMW could do that because following a major tech overhaul – onboarding a new CRM system integrated with its dealer network. McLean admits it was painful.

“Anyone who’s worked on those kind of projects knows that on face value, it seems quite simple: You can plug it into everyone, the data is there and you’re good to go. It’s absolutely not. It’s like plumbing in a house; it’s very messy.

“But now that that’s behind us, we can really start to take advantage of the benefits – the ability for us to understand propensity for repurchase at different moments, be they time-based or action-based, is powerful. As we’ve said before, service sells the next car.”

It also means BMW can keep recycling product launch budget into broader brand topics, “which is what we did with EV last year.”

BMW’s marketing mix has settled around 50:50 brand to performance channels in recent years, though McLean sees potentially a “slight increase for traditional awareness channels … particularly as we have some important brand topics to talk about in 2025.”

Kia’s Norbiato likewise expects to continue master brand building ahead of what he says will be Kia’s “biggest launch year to date”.

Kia “hasn’t done a price-focused above the line campaign since 2019”, and Norbiato says that’s not about to change. Its latest brand ad, EV drivers blithely swerving zombies on a shop run, is a case in point.

“It’s an extremely competitive market. We want people to know that Kia makes EVs and we want people to buy the brand as opposed to wanting it for a single reason. That’s a constant challenge – but we launched with the halo products, the EV6 and EV9, they have done the hard work – and we feel that puts us in the best position for 2025,” per Norbiato.

“But it’s going to be a really interesting year.”