Why Australia matters to Chinese car brands

Summary

Used-Car Purchase Nearly Goes Wrong

Adam Morris was considering a low-kilometre Skoda Octavia RS245. A pre-purchase inspection found some mechanical issues but no obvious evidence of a major crash. A subsequent vehicle-history check revealed that the car had been written off in 2024, with about $14,500 in recorded damage, including structural damage. The seller had not disclosed this.

Adam says the experience reinforced the importance of checking a car’s history and arranging an independent inspection before buying. John Cadogan suggests doing the relatively inexpensive history check first, then using the inspection to assess the car and negotiate over repairs.

Chinese Brands and Dealer Networks

Cadogan describes the rapid arrival of Chinese car brands as a kind of automotive “colonisation”—a metaphor for how they are taking over dealership sites and distribution networks, often with established dealers choosing to represent them. Examples discussed include a former Volkswagen site becoming a Denza dealership and other dealer groups switching to Chinese brands.

The presenters argue that familiar dealer groups give new brands credibility, facilities and access to customers.

Pressure on Established Manufacturers

The presenters say Chinese brands are challenging legacy manufacturers with lower prices, more features and faster product development. They contrast China’s rapid development cycles with what they describe as the slower, more cautious processes of Japanese manufacturers, while acknowledging that Japanese makers’ conservatism has helped deliver reliability and build quality.

They argue that pressure from Chinese competitors could force incumbents to improve their products and cut costs. Another possible response, they suggest, is to build more desirable “halo” models that strengthen a brand’s image and help sell its more mainstream cars.

How to Interpret Sales Figures

Cadogan cites year-to-date figures showing roughly 281,000 vehicles sourced from China and 219,000 from Japan, while noting that many Japanese-brand vehicles are built in Thailand. Including Thai-built vehicles, he argues, Japanese brands still account for more sales than Chinese brands in Australia.

The figures are presented as a reason not to equate a vehicle’s manufacturing location with the nationality of its brand.

Leapmotor and Stellantis

A listener asks whether Leapmotor could be affected if Stellantis, its Australian distributor, leaves the market. The presenters think Leapmotor could find another distributor or establish a different local arrangement if its sales and growth prospects justify it.

They also discuss the possibility that a manufacturer might eventually take over from its distributor, but stress that Leapmotor’s longer-term position remains uncertain.

Why Some Cars Don’t Come to Australia

Bringing a new model to Australia involves more than shipping vehicles. Costs include regulatory compliance, technician training, spare-parts inventory and warehousing, marketing, staffing, and securing a sufficient production allocation from the manufacturer.

Although Australian vehicle rules have been harmonised with major international standards, the other fixed costs can still make niche models uneconomic or push their prices too high. More models and variants would also increase the parts and inventory burden for aftermarket suppliers.

Presenters and Contributors

• John Cadogan — Auto Expert
• Adam Morris — ReDriven