The boss of Suzuki Motor Corporation’s distributor in Queensland and northern New South Wales predicts some automotive brands will withdraw from the Australian market, including some of the newer Chinese entrants.
“I think there’ll definitely be brands that don’t make it [in Australia]. I think there’ll be brands in China that won’t last – they’re cutting each other’s throats over there at the moment already,” the general manager of Suzuki Auto Co, Paul Dillon, told CarExpert.
“If you talk to [Pitcher Partners automotive analyst] Steve Bragg, somebody like that in that part of the industry, their advice to dealers is just to be very careful about which Chinese brands they take on and spend money developing their dealership for. Are they going to be there in the future?
“We’ve already seen Chinese brands come in and go previously.”
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Indeed, the first wave of Chinese brands from 2009 into the 2010s saw various brands come but eventually go, including JMC and ZX Auto.
That wave also included the first attempts in the Australian market by Chery and Geely, both of which left but have re-entered this decade with factory-backed operations.
And as Mr Dillon notes, some Chinese brands have even failed or appear close to death in their own market, including HiPhi, Hycan and Weltmeister, and the Evergrande Group-owned Hengchi.
The latest deluge of Chinese brands into Australia has far surpassed that of this earlier era in our market’s, however.
In 2023, Chery returned to the Australian market to join existing existing players BYD, GWM and MG.
Above (clockwise from left): Geely EX5, GAC GS3 Emzoom, Leapmotor C10, Chery Tiggo 4
Leapmotor, Deepal, JAC, Xpeng and Zeekr followed in 2024, with Geely and Omoda Jaecoo commencing deliveries this year, and Foton soon to give it another crack after having previously exited our market.
GAC is also set to enter the Australian market this year, and even more brands are expected to come. That will see well over 60 brands competing for a market that, compared to more populous nations like the US, is small fry – around 1.2 million vehicles were sold here last year.
Almost all of the new brands entering our market come from China, with automakers from that nation eager to enter the fray here.
They’re doing so in many cases not only to eke out a share of the Australian market, but also to use our market as a test bed for other markets (as Chery has confirmed) and to help bolster their global presence – something particularly crucial as competition among Chinese brands in their home market becomes ever more brutal.
They’re also typically coming here with sharp pricing that undercuts established brands from Japan, South Korea and other countries.
Many of those Chinese brands “undoubtedly” pose a threat to legacy brands like Suzuki, said Mr Dillon.
“The legislation’s almost leaning towards them, isn’t it?” he added, referring to the federal government’s New Vehicle Efficiency Standard (NVES) emissions scheme, which he argued was poorly thought-out.
“When you see if the NVES has the impact that it probably will have, does that mean everything else other than the Chinese stuff starts getting more expensive?
“It doesn’t mean that over the next two years there’s going to be a dip in the national sales of cars. Do we go from 1.1 million to a number less than that, once the shock of price increases?
“That said, looking at the recent VFACTS, some of their brands are certainly rapidly increasing in volume but the overall Chinese share of the national market isn’t increasing that quickly I don’t think.
“There are still some people that prefer to stay with a legacy brand.”
Sales of vehicles built in China were up by 8.6 per cent in 2024, after having overtaken sales of Korean-built cars in 2022.
But while brands like BYD and Chery have soared, overall sales growth for Chinese-built cars isn’t as impressive as it was in 2023, when their sales increased by 57.5 per cent, or in 2022 when they rose by 61 per cent.
And since 2021, Suzuki has managed to maintain a total share of our market of between 1.4 and 2.0 per cent, though this year it may struggle thanks to interrupted supply of key vehicles like the Jimny.
Suzuki finished 16th overall in our market in 2024 with 21,278 deliveries, finishing behind Chinese brands MG (seventh place, 50,592 deliveries) and GWM (10th, 42,782 deliveries) and just ahead of BYD (17th, 20,458 deliveries).
So far this year, Suzuki is behind all three of those brands, plus Chery. It’s sitting at 9653 deliveries, down 21 per cent year-to-date, while Chery has overtaken it with 17,272 deliveries, up 235.2 per cent.
Moving forward, Suzuki will also need to keep an eye on rapid risers like Geely in its rear-view mirror, while new entrants like GAC will be competing in some of the same segments as the Japanese brand.
Suzuki Australia, which manages the sale and distribution of Suzuki vehicles everywhere in Australia bar Queensland and the Northern Rivers region of NSW, says it won’t start a price war with purveyors of affordable Chinese vehicles.
“We offer products that are good value for money that can be applicable to most buyer types around the world. And that’s part of Suzuki’s philosophy: to produce a car for everybody,” Suzuki Australia general manager Michael Pachota told CarExpert.
“With that said, there’s no compromise ever on quality, so you get what you pay for.
“With respect to that, I don’t think it’s a race to the lowest price if a competitor is down there. It’s based on producing a vehicle that’s right for the consumer, and it’s a quality product without any compromise.
“We own our lane. We’re good in it. We’re the small-car specialists, and we deliver – and I keep saying it – undeniably reliable, quality product.”
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