ARB Corporation (ARB) - 4x4 sales continue to slide

ARB Corporation designs, manufactures and sells motor vehicle accessories and light metal engineering works, with a focus on the 4WD market. It has operations in Australasia, the US, Thailand, the Middle East, the UK and Europe. ARB was incorporated in 1975 and is based in Kilsyth, Australia.

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Australian new vehicle sales rose a modest 0.9% on the pcpto 102,924 units in Sep-26, underpinned by continued EV strength. ARB-relevant model sales fell 14.4%, leaving 1QFY27 16.3% below the pcp, though the Ford Ranger returned to growth (+4.0%) and was the month's top seller. Toyota remained the top-selling brand despite a 3.5% decline, with traditional brands continuing to lose share to Chinese brands. According to the FCAI, new vehicle sales increased 0.9% on the pcp to 102,924 units in Sep-26, driven by continued momentum in EV sales. Passenger vehicles led growth (+6.3%), followed by SUVs (+6.1%), while light commercial vehicles (-13.2%) and heavy commercial vehicles (-12.6%) declined. EVs continued to remain steady at 24.2% of sales compared to 26.8% in August 2026.

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ARB-relevant vehicle sales declined 14.4% on the pcp in Sep-26. Key ARB Toyota vehicles were mixed - HiLux sales declined 11.7% and the LandCruiser declined 59.4%, while the LandCruiser Prado grew 6.4%. The Ford Ranger, another key ARB model, grew 4.0% and was the highest-selling vehicle in the month. ARB expects FY27 key vehicle sales to be broadly in line with FY26, with upside from improved Toyota supply. With 1Q27 key model sales 16.3% below the pcp, this requires a recovery over the remainder of the year. Toyota's August 2026 data showed further improvement in exports to Oceania, and we continue to forecast a return to earnings growth in FY27, assisted by improved supply, strong gross profit margins and continued offshore expansion. We maintain a BUY rating.

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