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The rapid rise in sales of Chinese cars in Australia – which have quadrupled in the past three years and now outsell vehicles from South Korea – has earned praise from an unlikely source.


Sales of cars made in China have overtaken those from South Korea so far this year – for the first time in Australian automotive history – as records continue to tumble.

China is now the third-biggest source of new motor vehicles in Australia after Japan and Thailand – and ahead of South Korea, Germany and the USA.

Five years ago, fewer than 5000 cars from China were sold in Australia annually.

In the first five months of this year, more than 76,000 cars made in China have been reported as sold locally, an increase of 78.6 per cent compared to the same period the prior year.

Against this backdrop, the boss of Kia Australia – which last year overtook sister brand Hyundai for the first time in three decades – says while emerging Chinese brands may be a threat to established auto giants, he had respect for their rapid rise.

“Their growth has been outstanding, and they’ve done it with limited models, and they’ve done it with limited dealers,” said Damien Meredith, the boss of Kia Australia, who warned established brands ought to “expect more competition”.

The Kia Australia boss said as most mainstream brands have increased prices and vacated the budget end of the new-car market, Chinese automakers had “gone in there and filled that space very, very well. There was a space there, a pricing space there, and they filled it and have done a great job.”

When asked if that is why most mainstream Japanese and South Korean brands were “scurrying” from the incoming threat from cheap Chinese cars and trying to reposition themselves in more expensive segments (because they can’t compete on price due to their higher manufacturing cost base), the executive said:

“I don’t think we scurried. We made strategic decisions about where we want to position our brand and where we want to position our product. And that’s worked relatively well.”

The Kia Australia head honcho – a former high-ranking executive at sister brand Hyundai – said: “There are a couple of Chinese brand groups that are doing very, very well.

“They’re in the Top 10 already. But there’s also a technology story there as well.

“Customers are embracing electrification. There’s a huge pool of early adopters that still hasn’t been exhausted and they’re buying into the technology. They’re not buying into the brands because they don’t know the brands.”

As for the rivalry between Kia and Hyundai – after Kia ended Hyundai’s three-decade winning streak last year – Mr Meredith said: “The most important thing is really the success of the group (the two companies combined).”

And, Mr Meredith noted, Kia’s gain was not necessarily at the expense of Hyundai’s decline – even though the sales graphs for each brand go in opposite directions at about the same rate.

“The figures also show that we’ve gone up and Honda (has) gone down,” said Mr Meredith. “We’ve gone up and General Motors (Holden) has disappeared.

“There are a lot of reasons (for Kia Australia’s growth) and the market has largely stayed the same.

“If you want to grow, you’ve got to claw market share from your competitors, and we’ve been relatively successful in doing that. But the big claw in my view hasn’t come from Hyundai. It’s come from lots of different manufacturers.”

Mr Meredith said the long term goal would be for both Kia and Hyundai to be doing well in Australia, rather than one dominating the other, as has been the case for the past 30 years in Australia.

“So the challenge for the group, and this is always discussed when we’re in Korea, is that they like the competitive tension between Kia and Hyundai.

“But really it would be great if we were doing 100,000 (sales per year in Australia) and Hyundai were doing 100,000 and collectively there was 200,000 group cars being sold here.”

Australian sales of new motor vehicles made in China

  • 2023 May year-to-date: 72,619 (up 78.6 per cent)
  • 2022: 122,845
  • 2021: 76,262
  • 2020: 30,696
  • 2019: 17,957
  • 2018: 10,489
  • 2017: 4689
  • 2016: 2927

Source: Federal Chamber of Automotive Industries.

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Joshua Dowling has been a motoring journalist for more than 20 years, spending most of that time working for The Sydney Morning Herald (as motoring editor and one of the early members of the Drive team) and News Corp Australia. He joined CarAdvice / Drive in 2018, and has been a World Car of the Year judge for more than 10 years.

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