Although the Australian car industry has faltered recently, it seems as though one entity that may be coming out ahead are Chinese automakers. As recently as last year, Chinese cars were selling like hotcakes, setting new records. At the tail end of 2012, they were outselling name brands like Renault, Lexus, Volvo, and Peugeot. Because some Chinese brands are using Australia as a test market for wider global expansion, it’s interesting to keep an eye on this trend to see if it persists into 2013 and beyond.
Rapid Growth in 2012
As 2012 drew to a close, many were predicting that Chinese cars were the next big thing to hit Australia. Sales figures for Chinese cars were higher than the usual favourites at motoring.com.au like Land Rover or Lexus. Great Wall Motors sold 25,000 cars in Australia in far less time than it took Korean brand Hyundai to tap into this same market. While Hyundai took five years to hit this milestone, it took only three years for Great Wall Motors. In 2012, Great Wall was the 17th best-selling brand in Australia, with sales up 32%. This success may be due in part to the experience of its distributors. For example, Great Wall is handled by Neville Crichton in Australia, who was responsible for introducing Suzuki to Australians in the 1980′s and Kia in the 1990′s. He predicts that Chinese cars will take half the time as Korean brands did to become mainstream contenders in the Australian market.
A Sales Slump in 2013
Although it looked last year like Chinese cars were on track to dominate the budget car class in Australia, sales figures have taken a dive in the first half of 2013. Great Wall Motors deliveries sank by 35% compared to the same time frame last year, while other brands like Geely and Chery have struggled to get off the ground at all. Yet Australian distributors are still optimistic about the brands’ ability to recover, as they strive to meet Australian regulations and improve features. One reason for this drop in sales may be that direct competitors like Suzuki and Nissan dropped their prices to undercut the Chinese models. Whether competitors can maintain these slashed prices for the long term remains to be seen.
The Future of Chinese Cars in Australia
In addition to more competitive pricing from other automakers, Chinese brands face a few other challenges before they can truly take over the Australian market. Because they’re not yet proven in this market, resale values are extremely low. They also must boost their public image after a 2012 recall of Great Wall Motors and Chery vehicles due to asbestos in the engines. Finally, Chinese cars have been scoring lower in crash tests than many competitors. The brands have kept these hurdles in mind as they work on designing their latest ranges of models. Australian consumers can expect to see a new generation of Chinese vehicles available in local showrooms over the next couple of years that meet international standards more effectively.
With an improvement in crash safety and overall features, Chinese cars could rebound in the next two years to become major contenders in Australia and beyond.