Introduction:

Australia’s roads are about to undergo a huge transformation. A new report predicts that in the next decade, Australian streets will be filled with cars made in China!

#01: The Major Change Ahead — Australian Roads Filling with Chinese-Made Cars!

In recent years, many have noticed an increasing number of Chinese cars on Australian streets. While this might seem like a minor trend, the reality is that the Australian automobile market is undergoing a massive shift — one that will see half of all vehicles on the roads impacted!

With Ford closing its local manufacturing plant in 2016, followed by Holden and Toyota in 2017, Australia has become entirely reliant on imports to meet the demand for new vehicles. In fact, every year, 1.2 million cars sold in Australia are all imported from overseas.

According to a new report commissioned by the Australian Automotive Dealers Association (AADA) and released by the Centre for International Economics (CIE), it is predicted that by 2035, Chinese-made cars will account for 43% of Australia’s total imported vehicles. This is a massive leap from just 15% in 2024, and even more significant considering that this percentage was nearly zero in 2020!

The speed of this change is staggering. Today, China holds an absolute advantage in Australia’s electric vehicle (EV) market, with 65% of all BEV imports coming from China last year. And the expansion doesn’t stop here — Chinese exports of internal combustion engine vehicles, diesel vehicles, and especially light commercial vehicles and SUVs are also on the rise.

The rapid rise of Chinese manufacturing is a result of several factors:

Cost

·: Since 2017, manufacturing costs in most car-exporting countries have risen, while China has managed to keep car prices stable or even lower.

·Government policies: With the introduction of the New Vehicle Emissions Standards (NVES), which penalize high-emission vehicles and encourage clean energy models, Australia is reshaping the types of vehicles allowed in the market.

·Investment in EV technology: China’s heavy investments in battery and electric vehicle technology have put it at the forefront of global manufacturing.

#02: Chinese Brand Sales Surge by 368% – A Major Industry Shift

As more Chinese cars enter the Australian market, consumer interest in Chinese brands is also rising. Brands such as BYD, ZEEKR, XPeng, Great Wall, and Chery have rapidly gained market share.

According to MA Moelis, BYD has already surpassed Tesla to become Australia’s best-selling electric vehicle manufacturer, with sales surging by 368% in June compared to last year. Other established brands, like Chery and Great Wall, are also experiencing rapid growth.

The Australian Automotive Dealers Association (AADA) reports that at least 23 Chinese brands are either currently selling in Australia or have confirmed plans to launch. Moreover, five more brands are expected to enter the market soon.

Analysts at MA Moelis predict that a major industry transformation is on the horizon, especially as new electric vehicle brands enter the market and some existing ones exit.

Previously, Australia’s import surge was led by countries like Japan (1990s), South Korea (early 2000s), and Thailand (late 2000s), but China’s growth is expected to surpass all previous records.

#03: Why Are Chinese Car Manufacturers Flocking to Australia? Key Factors Driving the Trend

So, what has made Australia so attractive to Chinese car manufacturers?

According to Great Wall Motors Global Chairman Wei Jianjun, the “friendly market environment” in Australia for Chinese brands is a significant factor in their decision to expand into Australia.

He pointed out that the China-Australia Free Trade Agreement allows Chinese-made cars to enter Australia duty-free, saving companies significant costs. Additionally, Chinese car manufacturers are consistently improving the cost-effectiveness of their vehicles, making it difficult for European brands to compete on price.

While European cars are subject to a 5% import duty, Chinese-made cars enter Australia duty-free.

However, the most critical attraction is Australia’s high standards, which include strict vehicle certification processes, emission standards, and the ANCAP crash safety testing system.

Wei Jianjun believes that “if our products are recognized in the Australian market, it will set a great example for entering other right-hand drive countries, such as the UK, Southeast Asia, and South Africa.”

Australia is considered a “diverse testing ground” for the global car market. The local demand for everything from European-style small hatchbacks, American-style pickups, and large SUVs to Asian-market diesel light commercial vehicles offers Chinese brands an excellent opportunity to test and refine their product lines for global markets.

Additionally, Australia’s higher per capita income and multicultural population structure are major driving forces behind Chinese manufacturers “planting roots” in the local market.