Huge change coming to Aussie roads

A massive shift is coming to Aussie roads over the next decade, that will affect almost one in two cars we drive.

A new report forecasts that China will become Australia’s largest source of vehicle imports within the next decade.

The report, commissioned by the Australian Automotive Dealer Association and prepared by the Centre for International Economics (CIE), projects that by 2035, 43 per cent of all vehicles imported into Australia will be manufactured in China, up from 15 per cent in 2024 and virtually zero in 2020.

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Source: Australian Automotive Dealer Association/Centre for International Economics

Source: Australian Automotive Dealer Association/Centre for International Economics

MASSIVE SHIFT

Australia’s automotive landscape has dramatically shifted over the past decade with closures from multiple local manufacturing operations including Ford (2016), Holden (2017) and Toyota (2017).

Since then, Australia has relied entirely on imports to meet demand for new cars, with 1.2 million vehicles sold annually – all sourced from overseas.

China already dominates the local electric vehicle (EV) market, accounting for 65 per cent of Australia’s Battery Electric Vehicle (BEV) imports last year.

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BYD electric cars waiting to be loaded to the automobile carrier BYD "Shenzhen". (Photo by AFP) / China

But the report reveals China’s growth is not confined to BEVs, but exports of internal combustion engine (ICE) and diesel vehicles, especially light commercial vehicles and SUVs, have also risen.

The report states China’s rapid rise is a combination of several factors, including lower production cost, rising consumer demand for low-emission vehicles, and the Federal Government’s New Vehicle Efficiency Standard (NVES), which came into effect on the 1st of July.

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The evolution of automotive technology, particularly in drivetrain options, has been a key driver of change in Australia’s import market. Picture: AADA

Another enabler of China’s rise is the ongoing and projected fall in real production costs. Picture: AADA

The policy penalises high-emission vehicles and incentivises clear alternatives, and is expected to reshape the types of cars entering the Australian market.

While most automotive exporting countries have seen rising manufacturing costs since 2017, vehicle prices from China have remained flat or declined.

The Chinese government has also invested heavily in battery and EV technology, which has placed China at the forefront of manufacturing.

Chinese brands like BYD are expected to take over from the likes of South Korea’s Hyundai. Picture: Thomas Wielecki

Australia’s appetite for Chinese brands is also growing, with emerging automakers like BYD, Zeekr, XPeng, GWM, and Chery gaining market share quickly.

The AADA report also highlights China’s rise as part of a broader transformation in Australia’s car market, driven by the end of local manufacturing, changing consumer preferences and global trade trends.

Previous import booms were led by Japan in the 1990s, South Korea in the early 2000s and Thailand in the late 2000s.

But China’s current growth is expected to outpace them all.

Originally published as Huge change coming to Aussie roads