Cost-of-living pressures have failed to dampen Australia’s enthusiasm for the automobile, with car sales reaching new heights in 2023 despite successive interest rate hikes.

The Federal Chamber of Automotive Industries on Thursday revealed Australians bought 1,216,780 cars last year – eclipsing the previous annual record set in 2017 by more than 27,000.

The result is the culmination of a three-year comeback after COVID-19 decimated supply chains and caused new vehicle sales to slip below one million in 2020.

“This extraordinary result is a testament to the adaptability and resilience of both industry players and consumers alike,” the chamber’s chief executive Tony Weber said.

“Despite the supply chain disruptions faced in recent times, consumers now have greater access to a broad range of choices, fostering increased accessibility in the market.”

But as consumers expend pent-up demand fuelled by COVID-era supply shortages, the industry is readying itself for a slowdown in 2024.

Economists predict household purchasing power to diminish further as the effects of 13 interest rate rises since May 2022 and lingering high inflation continue to eat into record savings accumulated during the pandemic.

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

But he was optimistic that the federal government’s proposed fuel efficiency standard reforms would lead to emission reductions while enabling Australian consumers to drive the vehicles they need and want.

Electric vehicle sales continued to power ahead in 2023. More than 87,000 EVs were sold last year or 7.2 per cent of the market, compared to 3.1 per cent in 2022.

Utes and SUVs dominated the market for another year, accounting for almost 80 per cent of all sales and all of the top 10 most popular models.

For the first time the Ford Ranger was the top selling vehicle, outstripping 2022’s most popular car the Toyota HiLux by 2245 sales and knocking it off its perch for the first time in eight years.

The Tesla Model Y is the first battery electric vehicle to crack the top 10 with more than 28,769 models sold. The SUV came in sixth place, just ahead of the Toyota Landcruiser.

Toyota was the most popular brand for the 21st year running, with more than 215,000 units sold in 2023, accounting for 17.7 per cent of the total market.

Mazda, the next closest competitor, managed less than half that, with 100,008 vehicles sold.