Chinese cars overtake rival UK, US and German imports as Aussies drive towards cheaper models

Australians are choosing cheaper cars over rival UK, US and German imports, with two Chinese brands racing ahead in sales.

David McCowen

4 min read

May 15, 2021 - 6:00AM

News Corp Australia Network

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Chinese cars have overtaken rival imports from Germany, the UK, and the US as Australian customers drive toward cheaper models.

New figures released by the car industry show China was the fourth-largest source of new vehicles in the first four months of this year with 20,909 cars imported, ranking behind South Korea (48,869), Thailand (77,226), and Japan (129,295).

Chinese brands Great Wall Motors and MG have enjoyed a fourfold increase in sales this year by offering well-appointed cars at discount prices.

Established brands have largely stopped selling entry-level budget models, creating an opportunity for Chinese manufacturers.

The cheapest Toyota is a Yaris hatchback priced from about $27,500 drive-away, while the Chinese MG3 Auto is $10,000 less at $17,490 drive-away.

Toyota’s HiLux ute costs more than $64,000 drive-away in best-selling SR5 auto form, much more than the range-topping Great Wall Motors Cannon ute offered for $40,990 drive-away.

Great Wall Motors customer Anthony Conias said he chose to buy a GWM Cannon as it costs significantly less than an equivalent Ford or Toyota.

Anthony Conias with his Chinese-built GWM Cannon ute. Picture: Richard Walker

Mr Conias said the Cannon was “leaps and bounds” ahead of other Chinese vehicles he has owned.

“I told myself I’m not buying another Chinese truck, but I test drove the Cannon and it changed my mind completely,” he said.

“It’s built different to the last generation of Chinese cars. It’s chalk and cheese,” he said.

“I saved $20,000 and got a great seven-year warranty.”

Recent trade wars between China and Australia have had little to no effect on sales.

Australian bought just 2320 cars built in China in 2015. That number swelled to 30,696 in 2020 and is on track to double again this year.

Western brands such as Volvo, BMW and Tesla are also shifting production of some vehicles to China in pursuit of greater profit.

Tony Weber, chief executive of the Federal Chamber of Automotive Industries, said “China has some of the most modern and high-quality factories in the world”.

“It’s not surprising they are selling high-quality vehicles,” he said.

Federal Chamber of Automotive Industries chief executive Tony Weber.

Early examples of Chinese cars suffered from sub-par build quality, but newer versions look and feel impressive, and models such as the MG HS and MG ZS EV – Australia’s cheapest electric car – have five-star ANCAP crash safety ratings.

MG Marketing Director Danny Lenartic said MG’s mission is to offer “more choice for the Australian customer”.

“We’re delivering value- not just based on price, but also features and warranty,” Mr Lenartic said.

MG is the international arm of SAIC, China’s largest automotive company.

2019 MG3.

The Australian Strategic Policy Institute has linked MG and SAIC, as well as western companies such as Nike and Volkswagen, to forced labour camps staffed by ethnic minorities.

A statement released by MG Motor Australia said it “does not and will not tolerate forced labour in any of its operations”.

“MG is committed to acting ethically and with integrity and transparency in all business dealings and to putting effective systems and controls in place to safeguard against any form of modern slavery taking place within the business or our supply chain.”

GWM head of marketing Steve Maciver said the company “does not engage forced labour of any kind”.

“GWM’s production processes are amongst the most advanced in the world and utilise a combination of high-tech automation and skilled labour.

“The reason GWM can offer quality vehicles at a cost less than many of its competitors is due to the huge scale of the Chinese domestic market.

“This makes amortisation costs very low and when combined with significant business growth, GWM is well-placed to pass this value on to its customers.”

The MG HS.

Australian National University economist, assistant professor Shiro Armstrong, said the explosive growth of Chinese was “unequivocally good for Australian customers” as it will lead to “more choice and cheaper cars”.

“This is a similar story to South Korean cars and Japanese cars before that – it’s not a brand new pattern,” he said.

“The Chinese cars are becoming better-quality and more competitive, this is an extremely large potential that we are starting to realise.”

THE BIG THREE CHINESE CAR BRANDS

Once famous for British sports cars, MG is now part of the Chinese state-owned SAIC Motor Corporation. One of the fastest-growing brands on the road, MG has big plans for electric vehicles. All of its cars come from China, and its Australian operation is an extension of the main business.

GWM

Great Wall Motors was one of the first Chinese car brands to make a splash in Australia, undercutting established marques with a cut-price ute in 2009. Now offering well-equipped utes, the brand runs its own operation in Australia. It also sells SUVs under the sub-brand Haval.

LDV

Leyland Daf Vans was a defunct British commercial vehicles supplier reborn as a Chinese concern in 2010. LDV sells affordable vans and utes, along with the D90 full-size SUV in Australia. The cars are imported locally by ATECO, which also handles Maserati, Renault and RAM trucks.