5 hours ago
7
Car companies that short-change dealers and customers with "unfair" practices and limited servicing have been placed on notice by the Prime Minister.
Prime Minister Anthony Albanese has fired a warning shot towards new car brands in Australia – many of which are from China – looking to cut corners and short-change motorists.
Albanese called out "unfair practices" by car companies towards showrooms and customers at a conference held by the Australian Automotive Dealer Association today.
"We want Australians to be able to choose from the broadest possible range of vehicles from manufacturers at the best possible price," he said.
"And we want to make it clear that companies new to the Australian market: they also have to meet standards around service, not rely on [sales] volume alone."
Twenty-eight new car brands have entered Australia in the past five years, most from China – and many, including BYD, are identifying the need for improvement in servicing and parts supply, as their sales grow faster than their dealer networks.
The Federal Government is cracking down on the franchising laws between dealers and manufacturers, which give showrooms little protection from automotive giants, and can force them to take on far more cars than they can sell.
"We know that in order to protect consumers from unfair practices, we have to protect dealers as well," said Albanese, adding that legislation to fix it would be introduced and passed this year.
The Prime Minister acknowledged "a growing field of new manufacturers" competing on the Australian market, and a "power imbalance" between car companies and dealers.
BYD sells more cars per dealer on average than any other brand – at 989 vehicles per location – compared to 857 for Toyota, 477 for Ford, and 617 for Mazda.
Other Chinese marques have larger dealer networks – GWM selling 429 cars per showroom, and MG 382 per dealer – resulting in 750 additional new-car dealers opening their doors in the past five years.
James Voortman, CEO of the Australian Automotive Dealer Association (AADA), warned the growing level of competition is "unsustainable", both for new brands and established names.
"We have a lot more brands in this market, backed up by their dealers, eating away at the same pie," Voortman told the conference.
"We're also going to seek consumer protection if we have brands that grow too quickly without the ability to develop parts supply and service capability for those vehicles."
"It wasn't that long ago that Holden packed up. We have seen others depart this market in recent years.
"We will see more of these, whether it's legacy brands who can no longer compete with an emerging Chinese sector, [or] whether it's Chinese brands who have to depart because some kind of rationalisation has occurred in China, meaning that brands here are no longer viable."
"These are some of the challenges we're going to be facing."
Voortman said the growth of Chinese cars is being felt in Australia "like nowhere else".
"People will say you've seen the same thing with Japan and Korea. What I'm telling you is that this is at a different scale. This is going to occur on a different magnitude, and the effects are going to be much more long-lasting."
Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
