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Market Insight: China rises, incumbents pay the price

Momentum: The rise of Chinese car brands in Australia will continue this year with the introduction of more GWM brands including electric-only Ora (pictured left) and off-road-oriented Tank (below).

GWM, MG and LDV chew into market share of brands like Honda, Jeep, Volvo and Audi


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31 Jan 2022

NEWS that Great Wall Motors will likely introduce two new brands into Australia this year shows the customer acceptance of Chinese vehicles onto the market and the willingness of China to expand its exported product range.


Great Wall, now GWM and combined with its Haval brand, has been a star performer on the market, along with MG.


GWM sales are up 251 per cent in 2021 compared with 2020, with 18,384 buyers. MG sold 39,025 vehicles, up 155.9 per cent on 2020.


It is set to do even better. This year GWM has confirmed the Haval H6 Hybrid and smaller Jolion Hybrid, as well as the coupe-styled H6 GT.


The company’s Ora pure-electric brand will start rolling out in the middle of the year, followed by the Tank off-road range that could be here as early as the fourth quarter with either the 300 or larger 500 model.


As importantly, the position of the Chinese brands on the Australian market is rapidly rising. GWM now has a market share of 1.8 per cent, up from a mere 0.6 per cent in 2020.


This puts it above brands that could be more obvious on our roads, including Audi (1.5 per cent), Honda (1.7 per cent), Jeep (0.7 per cent), Land Rover (0.6 per cent), Lexus (0.9 per cent), Suzuki (1.7 per cent) and Volvo (0.9 per cent).


MG has a market share of 3.7 per cent (up from 1.7 per cent in 2020), making it more popular than Isuzu Ute (3.4 per cent); Subaru (3.5 per cent); and close to Volkswagen’s 3.9 per cent.


The other Chinese manufacturer, LDV, lifted sales in 2021 by 62.9 per cent with 15,188 sales for 1.4 per cent of the Australian market.


Gains on the market as a percentage mean there are losses elsewhere. As the Chinese bands grew in acceptance, they displaced others.


In the period from 2020 to 2021, Honda sales almost halved (a programmed exercise as Honda moved to an agency sales model) and Mercedes-Benz Cars slipped to 2.7 per cent from 3.2 per cent, while Volkswagen and even Toyota lost a couple of base points.


Audi slipped from 1.7 to 1.5 per cent of the market; BMW was down from 2.6 to 2.4; Nissan reversed from 4.2 to 3.9; and Toyota lost one basis point, still retaining the lion’s share at 21.3 from last year’s 22.3.


Of course, sliding sales have a lot to do with availability. Most car-makers have been hit by shortages of components, mainly semiconductors, and of steel and aluminium.


This contributed to China overtaking Germany and the United States as a source of vehicle imports to Australia last year by a comfortable margin, securing fourth position after Japan, Thailand and South Korea – all of which also grew their share of the import pie.


One notable decline as vehicle source to Australia was England, its production issues compounded by the tatters of Brexit and the subsequent closure of Honda’s manufacturing facilities in Swindon.


The English contribution was further eroded by most of its overseas markets reducing demand, with exports to Australia down 31.1 per cent in 2021.   


England supplied 35,581 vehicles to the Australian market in 2016, representing three per cent of the total market. 


By comparison, Australian production of vehicles that year was 87,096 units, or 7.4 per cent. And to reflect the changes through the years, China exported 2927 vehicles that found buyers in Australia. 


China’s sales in 2016 were 0.25 per cent of the market. In 2021, its share was 7.3 per cent.

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