Record Car Sales Drive Dealership Demand

A record year for car sales is driving demand for dealerships with the latest a multi-storey development planned for Collingwood.

A total of 1,216,780 vehicles were delivered during 2023, topping the previous highest sales result of 1,189,116 set in 2017.

Disrupted supply lines and increased rent in the pandemic closed many dealerships, creating opportunities for developers.

UEM Sunrise splashed $43 million on a former Honda and Nissan multi-level dealership at Hoddle Street and proposed a 23-storey mixed-use plan for the site in 2022.

Orchard Piper readied plans for a $400-million boutique apartment project at Toorak in place of a Mercedes-Benz dealership the same year.

However, the latest data from the Federal Chamber of Automotive Industries supports the future of dealerships in urban landscapes.

Acteo Group is behind the inner-city Melbourne plans with a four-storey sales and repair shop planned for165-179 Victoria Parade, Collingwood, near the Bunnings Warehouse.

The independent vehicle distributor would open a Renault, Dodge Ram and Maserati showroom on the ground floor, repairs and used-car sales would be upstairs with an office mezzanine and car storage on the top level.

▲ The site next to Bunnings Warehouse is metres from the Hoddle Street, Victoria Parade intersection, which has more than 100,000 cars passing daily.

The 2546sq m L-shaped block also has frontage on Cromwell and Rupert streets. The dealership would replaces a pharmacy, WMC Jackson textile industry business and two single-storey attached homes at 8-10 Rupert Street.

The Bunnings Warehouse, a 5376sq m site, sold for north of $62.5 million to a Melbourne-based private investor with a 5 per cent yield through Burgess Rawson agents in July.

The preferred height for the locale is to seven-storeys or 24m, so the four-storey design by David Earle Architects has room to spare at 14.4m.

The car industry is expected to make major changes in the next 10 years as it transitions to new technology—16.2 per cent of sales were battery electric, plug-in or hybrid last year.

FCAI chief executive Tony Weber said they were optimistic for the industry’s future.

▲ Acteo Group's plans in Collingwood are on exhibition with the City of Yarra.

“This is a tremendously exciting time for the industry,” Weber said.

“Consumers have a wide choice of vehicles available to meet their work, recreation and family needs that come equipped with the latest advancements in engine technology, safety features and advanced driving, navigation and entertainment aids.

“As we celebrate this historic achievement, we recognise that the automotive sector will face challenges in the coming months. 

“Cost-of-living pressures and increased interest rates will impact the market, and we anticipate a challenging 2024.”

Toyota was the top-selling car brand with 17.7 per cent of the market while the top-selling vehicle was the Ford Ranger at 63,356 units. 

SUVs and light commercials accounted for 78.4 per cent of sales and comprised all the top 10 vehicles sold in 2023.