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The ute market is about to get a lot busier, but Toyota thinks the number of utes sold won't increase in the long term – and it could push an SUV to the top of the sales charts.
Ute sales are soon to plateau – and new models such as the Kia Tasman and BYD Shark 6 will only eat each other’s lunch, not attract new customers to double-cabs – according to Australia’s top-selling car brand.
Toyota Australia sales and marketing boss Sean Hanley told local media the market is soon to reach "peak ute", as new entrants steal sales from their competitors models rather than other types of vehicles.
The Toyota HiLux ute’s seven-year reign as the nation’s top-selling new vehicle ended in 2023 at the hand of the Ford Ranger ute, but Toyota expects both models to be overtaken by an SUV as soon as next year.
"The most telling figure from January [sales data] ... is that hybrid sales grew by more than 50 per cent. Once again, RAV4 led the way, the seventh month in a row it has been Australia's best-selling [new] vehicle," Hanley told media.
"Of course, I would think this does beg the question – could an SUV become Australia's best-selling vehicle [over a calendar year]?
"Or maybe we should put it another way, have we in fact reached what I call 'peak ute'? The answer to both questions, I think, is very likely.
"We know that ute buyers can look forward to having much greater choice available to them. But despite that total ute sales are likely, I think, to remain fairly static, and a more fragmented segment will make it increasingly difficult for a single model to dominate the sales charts.
"With the ute under challenge as Australia's most-popular vehicle, it is more than possible, I think, that an SUV – perhaps ... even our very own RAV4 – may very well rise to the top of the sales charts within the next couple of years. So watch that space very carefully."
The RAV4 (58,718) was the second-best selling new vehicle locally last year, behind the Ford Ranger (62,593) but ahead of the Toyota HiLux (53,499) and Isuzu D-Max (30,194) utes.
Sales of regular-sized 4x2 and 4x4 utes – excluding full-size US pick-ups – have grown by 15.3 per cent in the past five years, from 198,784 in 2019 to 229,219 in 2024, according to Federal Chamber of Automotive Industries (FCAI) data.
Over the same period, sales of all new vehicles have grown by 16.4 per cent, SUVs are up 45.8 per cent, and petrol, hybrid and diesel SUVs – to account for the rapid growth of the electric Tesla Model Y – are up 35.4 per cent.
Comparing 2024 with 2023, sales of all ute types – including US pick-ups – were down 4 per cent, including a 15 per cent slump for the 4x2 category.
"At best, it'll be static," the Toyota executive said of total ute sales once the market becomes more competitive.
"You're going to see some short-term growth, because when new product comes in, they're going to get a hit. They're going to sell thousands, maybe.
"We already think in February, you're probably going to look at the ute market and everyone will go 'oh, it's on fire' because there's going to be a plethora of pre-orders that come through and it's going to look great.
"You got to look at the ute market over a sustained period of time, at least 12 months. It's like me saying January had 21 per cent market share [for Toyota], happy days. One month is not a year.
"But if you actually look at the ute market over seven months ... it's actually going down. There are new players coming into that'll stimulate that market, I have no doubt. But I don't think it's going to grow exponentially because of that."
Hanley said he expects 2025 "will be it" for the ute segment's peak, but that "from 2026 onwards it's going to be a new era."
The Toyota executive told Drive many customers tend to move beyond utes as their family grows, or their needs change, and an SUV becomes a better fit.
"There's a migration at a certain point of customers from a ute to an SUV ... Typically as families grow older and larger, they say, well, the ute's no longer going to do it for me. I'm going to a medium or a large SUV.
"Or if kids are growing up, they might go to a smaller SUV or a 'cross' vehicle even.
"When you look at the ute segment and you say to yourself, well, if you're looking at a long-term play, do you think that ute segment's going to grow forever? The answer is no.
"And I think there's a fundamental shift about to happen over the next 24 months which we'll see that ute market stagnate. It may grow this year for a little because of new entrants, then it's going to come down and SUV is going to escalate again."
Even though the RAV4 has achieved an SUV's highest-ever ranking on the annual Australian new-car sales charts, Hanley was cautious on Toyota's top seller reaching number one.
He suggested that RAV4 sales would not smash records in 2025 – and may stay close to, or slightly below 2024 levels – as the factory in Japan cannot produce significantly more cars than it is already building.
"No, only based on, I know what our supply rate is," Hanley said when asked if RAV4 will break last year's sales record this year.
"It's not demand. Demand for RAV4 hybrid right now is off the Richter scale. It's strong, it's very strong. Supply will be the only thing I think may determine how that finishes for the year. That's why I certainly wouldn't be calling RAV4 as the number-one selling car this year."
Asked to clarify his comments, and if it meant a return to long wait times, he said: "No, no. Our wait times on RAV4 will be fine. There won't be any issues there."
"I think we'll meet the demand, but I think ... no, there won't be a lot of ground stock. It'll still do very well, but whether or not it's ... I don't think it's the year of the SUV in 2025, but I certainly think in 2026 that'll be a different story."
A Toyota spokesperson added: "It's not going to blow out, [regarding] wait times. It's just when you're talking about those big numbers, the amount of supply needed [is significant]."
Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
