Home » Chinese Cars Are Thriving In Australia For One Big Reason

Chinese Cars Are Thriving In Australia For One Big Reason

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This episode of The Morning Dump will take us on a tour around the world, albeit one skewed toward the Pacific as we look at the success and failure of a whole crop of new automakers.

As the headline and photo should make clear, the English-speaking nation that has seen a big increase in the popularity of Chinese cars in Australia. Why? To some extent, you can blame American automakers and the government.

Vidframe Min Top
Vidframe Min Bottom

It’s a wonderful thing to live in a country where we can report critically and honestly on the performance of an automaker like VinFast. That may not be the case in Vietnam, where one VinFast critic has gone missing after being apprehended by the government. Our friends at TechCrunch have a big report on some embarrassing problems at Fisker. Thankfully, there’s a low risk of them being tossed in jail.

And, finally, we go back to Asia where Toyota is tossing Daihatsu’s leadership in the rubbish bin after all the lying.

Trade Rules Everything Around Me (TREAM)

Mg Zs

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Sales numbers are in for our friends in Australia, and it’s becoming clear that Chinese automakers are continuing to gain a foothold in the country.

In particular, MG (now owned by SAIC) is doing extremely well, selling the most popular sub-$30K (Aus) vehicle in the MG 3, the most popular small car in the MG 4 hatchback, and the most popular cheap SUV in the MG ZS. SAIC also owns automaker LDV, whose Mifa van is also popular.

SAIC isn’t alone, BYD is outselling Tesla according to Drive.com.auand both MG and GWM are now in the top ten automotive brands in the country. GWM grew a whopping 25% year-over-year and managed to outsell Subaru.

So what’s happening here?

First, there’s the obvious: Chinese cars are now generally on par with other automakers in terms of design, equipment, and safety. When it comes to electric vehicles, which many of these are, Chinese cars often have an edge in terms of performance and available features.

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The huge price advantage is also clearly a contributing factor, as an MG ZS, for instance, costs about $24,000 AUD (or $15.5k USD) and comes with Apple CarPlay, parking sensors, and about everything you need in a basic car. The next most popular car in the segment, the Hyundai Kona, starts at around $36,000 AUD (or $24,000 USD).

Those reasons only tell part of the story.

What really happened in Australia, and what hasn’t happened in a lot of the rest of the world, is that Australia gave up on having a domestic car industry. When you have a domestic industry you do a lot to protect it, which includes putting tariffs in place and other measures to restrict imports.

Why doesn’t Australia have a domestic car industry? Why are the utes dead? Why does Holden no longer exist?

It’s fairly simple economics. The Australian car market was no longer big enough to support domestic production and the industry was no longer efficient enough, so it had been propped up for years by government subsidies, which kept thousands of people employed but cost the average taxpayer a lot. There’s a great write-up in Road & Track that goes through the history:

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And now Treasurer Joe Hockey was done playing nice. Nostrils flared, finger jabbing the lectern, he leaned into the microphone and made the government’s case. If Holden wanted another dime, Australia needed to know whether the company was in it for the long haul.

“Either you’re here,” he said, “or you’re not.”

The next day, he had his answer. On December 11, 2013, GM announced that Holden would cease production in Australia by the end of 2017. Two months later, Toyota, which had a plant in suburban Melbourne, confirmed it was leaving, too.

And so the winding down began. Factories closed. Employees were laid off. Suppliers pivoted, looking for customers in a manufacturing sector that now barely existed. In early 2020, GM announced it was axing the Holden brand altogether. The news came more as a mercy than a surprise. Australia’s oldest carmaker was dead, as was the country’s auto industry.

By and large, protectionism is what’s keeping Chinese automakers from dramatically expanding in a lot of markets, but what’s the use of protectionism when you no longer have something to protect?

At that point, as a government committed to reducing global warming (especially after the massive wildfires at the start of the decade), it made sense to let the cheap EVs flow into the country and have those savings get passed down to consumers.

There are also benefits when it comes to normalizing trade, as China is an important trade partner for Australia and has been lately dropping barriers to items such as Australian hay. Chinese cows get delicious Australian chaff and Australians get MGs. Everyone wins.

Did VinFast Cause A Critic To Get Detained By Police?

Vinfast Vf3 Real Photo 1536x10242

When we drove the VF 8 electric crossover from Vietnamese automaker VinFast we experienced a lot of problems, which ended up being common among other journalists.

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Nothing happened to those journalists other than they got a good story and likely irked a few PR people.

Things might be different in Vietnam, where a teacher named Sonni Tran made it his mission to point out the many issues surrounding VinFast and its parent company Vingroup in Vietnam.

I suggest you read this feature from Kevin Williams over at InsideEVs that details the sudden disappearance of Tran and the potential involvement, whether directly or indirectly, of the automaker.

“Need to find missing person!!”, a user exclaimed on Reddit, asking for help in searching for Tran. A translation of the post reads: “This morning, we had an appointment to go out for coffee together, but after contacting them again, [he] had disappeared since 7 a.m. and no one knew where… the safety of [Sonnie’s] life is currently the most fragile issue at present.”

Not long after, they made a harrowing claim: three plainclothes police officers allegedly abducted Tran at a coffee shop in broad daylight. According to sources with direct knowledge of the situation—including sources whose identities are being withheld by InsideEVs to protect them from potential retribution—the investigation that resulted was due to Tran’s criticism of VinFast, as he may have run afoul of a broadly defined Vietnamese law critics say is designed to stifle speech against the country or its interests. Subsequently, his phone and computer were confiscated by police during his arrest. (The Vietnamese edition of Voice of America initially reported the news of Tran’s detainment.)

Furthermore, a Vietnamese court document seen by InsideEVs confirmed that Tran—and another person close to him, a detail that has not been previously reported—was summoned to speak with the Ministry of Public Security “to respond to some content related to Vingroup’s complaint.”

It’s not entirely clear that VinFast was the main reason why Tran was detained as he was also a critic of the government, but it seems quite possible given the reporting here. InsideEVs attempted to get a comment from VinFast a few times, ending with this statement:

“According to Vietnamese law, individuals and organizations have the right to file complaints against entities that abuse freedom of speech to tarnish the reputation and honor of others. The relevant authorities were responsible for accepting and resolving such matters. We subsequently decided to no longer pursue the issue,” a VinFast official said, later confirming they were referring to Tran’s case.

 

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More Troubles At Fisker

Fisker Ocean 1

VinFast isn’t the only upstart electric automaker facing issues with its products. The ongoing troubles at Fisker continue with an embarrassing report from TechCrunch that indicates both frequent vehicle issues and a slow response to complaints from its small number of owners.

The day had started on a celebratory note. Fisker, donning a graphic tee depicting the electric Ocean SUV, hugged and posed for photos with the company’s first customers — at one point even signing one of the vehicles.

What happened next was a harbinger for Fisker and what his eponymous company continues to grapple with: Shortly after Fisker board member Wendy Greuel took delivery, her Ocean SUV lost power on a public road, according to two employees familiar with the matter. The company has confirmed the incident occurred, and said the issue with her vehicle was fixed.

There’s a lot more in the report, but it shows a wide range of unnerving issues including with the vehicle’s brakes, locks, and power systems:

Another owner reported to NHTSA that on January 2 they had been repeatedly locked inside their Ocean, and says they “put numerous service tickets in with no response from Fisker.”

“[W]e’ve been locked in the car numerous times and are afraid to drive anywhere not knowing if we can get out in a timely manner,” the owner wrote.

This is not a great look.

Daihatsu Charade Claims Execs As Toyota Admits It Overstressed Company

Cs Daihatsulineup

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The massive safety testing scandal at Toyota’s subsidiary company, which we’re calling the Daihatsu Charade, has claimed the top executives of the company. Not only are Daihatsu’s Chairman Sunao Matsubayashi and President Soichiro Okudaira being forced to resign, but the entire position of Chairman is being abolished as Toyota takes firmer control of the company.

The new President of the company will be Masahiro Inoue, who is currently in charge of Toyota’s Latin American operations.

From Automotive News:

As part of the overhaul, Toyota will refocus Daihatsu’s business on minicars and outsource some of its overseas operations to partner companies. The overall idea is to relieve the pressure for growth that overstretched the company’s development and production resources.

“The rapid expansion of the company caused distortion that was not properly absorbed by the company,” Inoue said of the minicar maker’s problems. “I aim to rebuild Daihatsu.”

This is a positive development because, you know, we really like Daihatsu’s cars.

What I’m Listening To While Writing TMD

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The first and, maybe, only Plains record is fantastic. “I Walked with You a Ways” is one of my favorite folk country albums of all time, due in no small part to this song, which made me tear up the first dozen or so times I listened to it. Also Beyonce has a country album coming out. Good country music is back, y’all!

The Big Question

Are there any Chinese cars you’re excited about? Any you’d be interested in buying if they came to the United States?

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InvivnI
InvivnI
2 months ago

I have driven both the MG3 and MG ZS as rentals. They were… fine. A bit underpowered, and the handling, ride, NVH were nothing special but frankly not the worst I’ve ever experienced either. They’re obviously cheap cars but they’re really not that far behind their (more expensive) competition – especially if you only care about having Android Auto/Car play and must have a new car.

I still wouldn’t buy one due to the current political situation, but hopefully they can give other car makers a good scare, enough to improve their product and bring more competitive pricing (and options!) to the rapidly shrinking entry level segments.

Rapgomi
Rapgomi
2 months ago

The issues with Fisker make me sad. I recently spent a brief time with a Fisker Ocean One and was genuinely impressed with the build quality. The interior reminded me a bit of a Tesla, but it was much more solid. The interior materials were also touch better than Tesla, but well behind Rivian.

My brief exposure gave me high hopes for their success.

Freelivin1327
Freelivin1327
2 months ago

-Talk about a charade ha ha
-Beyonce+Country? Sounds like the worst music ever made!
-I’ll take a ChangLi

NosrednaNod
NosrednaNod
2 months ago
Reply to  Freelivin1327

-Beyonce+Country? Sounds like the worst music ever made!

Why? She is very talented, has been very successful and will have access to the best song writers and studio musicians. It isn’t as if Jason Aldean writes his own songs….

Freelivin1327
Freelivin1327
2 months ago
Reply to  NosrednaNod

Yeah, just completely different opinions on music, like w/ most people- everyone has their own personal taste in music and that’s ok. I listen to most all genres actually, mostly all the different types of rock/metal. I only like some country, some pop, some hip/hop, some rap and not as much mainstream in general. I just had to comment since I don’t like her and hardly like country so it sounded horrible; so had to vent about it. There are tons of bands outside of the mainstream that are so good- I actually just found one recently that blew my mind when heard them

V8 Fairmont Longroof
V8 Fairmont Longroof
2 months ago

Australian here… Chinese cars are doing well here for one reason – they are cheap. Same way Hyundai and Kia got a foothold, and the Japanses before them. The legacy importers have pretty much abandoned the sub – $A20-30K market. My wife’s 2018 South African made Polo is a classic exanple – was $A17 new, now the cheapest Polo starts above $30K. Ranger and Hilux still best-sellers however – we still loves us a Ute! Even if they are technically a pick-up, but don’t start that argument…

Craig Simpson
Craig Simpson
2 months ago

Bingo. Chinese cars are cheap, the jury is out on their longevity. It may be a case of saving money in the short term, but costing yourself more in the long term via depreciation or having to replace earlier than intended.

Autopian regularly laments the lack of affordable cars, and the Australian market is proof that people will choose to buy cheaper cars, and in Aus that means Chinese cars.

I’ve only driven one, an MG SUV that we hired whilst on holidays, and it worked perfectly well and nothing broke, but my goodness what a penalty box. As an enthusiast I hated driving it (also is was auto and I only drive manuals, so I probably would have hated any auto).

And yes, they are everywhere, and you notice how many people have bought bright yellow MG3s (which don’t look too bad and are an actual colour).

Andy Individual
Andy Individual
2 months ago

Tell me, are there die hard ute lovers taking Rangers and putting car sized wheel and tire (not nature stompers) packages on them, dropping the suspension in order to ute cosplay? It would seem oddly logical.

Last edited 2 months ago by Andy Individual
Craig Simpson
Craig Simpson
2 months ago

As funny as that would be…… no, not seen any of that. In fact a lot of Rangers are the Wildtrak model, and a lot of those owners like to ape the Americans by making them bigger, badder, more agressive….. for the school run.

Like America, SUVs now rule the land of Oz, but overall our preference tends more European with what Americans deem Small or Compact models.

I guess Americans even consider the Hilux and Ranger to be Compact?

DadBod
DadBod
2 months ago
Reply to  Craig Simpson

The Hilux analog in the US is the Tacoma and is super popular with outdoorsy people. Otherwise people buy the big trucks. Rangers are considered wussy by truck dorks.

V8 Fairmont Longroof
V8 Fairmont Longroof
2 months ago

It exists, but typically older Japanese ‘utes’ here – search “lowlux”. Did see a Ranger sporting a half-hearted attempt at a Carolina Squat the other day, but I was on the Gold Coast… ¯\_(ツ)_/¯

Dangerous_Daveo
Dangerous_Daveo
2 months ago

A base Yaris is $28k…

A lot of the bigger Chinese manufactures have also gone for big unlimited km warranties, much like Hyundai / Kia have. It definitely reduces the nerves on the transaction, which I think gets a lot of the fence sitters over the line.

I think also, most cars look much of a muchness now due to numerous regulation reasons, so most of the Chinese stuff looks pretty good too. Back in the day a GWM ute definitely looked cheap from the outside, and just didn’t sit right on the road. Those days are long gone I think.

Manwich Sandwich
Manwich Sandwich
2 months ago

Are there any Chinese cars you’re excited about? “

No.

Any you’d be interested in buying if they came to the United States?”

I’ll want to see it on sale for a few years and see some reliability data before considering one.

Also on the subject of Australian vehicle sales, it should be noted that the top selling brand for 2023 by a wide margin is Toyota. And Mazda is #2 and Ford is #3.
https://www.racv.com.au/royalauto/transport/cars/australian-new-car-sales-2023.html

Silent But Deadly
Silent But Deadly
2 months ago

Mostly because of fleet sales of the Hilux and Ranger. 80% of Ford’s total sales were for the Ranger and related Everest. Mazda has done well but their volume will slip with their move up to premium SUVs.

Daniel MacDonald
Daniel MacDonald
2 months ago

Based on past work experience with sourcing camera parts from Chinese vendors as well as a more recent fiasco trying to return some lamps I bought from a Chinese company I’m pretty dubious on buying something as expensive as a car-not to mention the wide and sometimes hilarious range of amazon product experiences I’ve had.

I used to work at a camera repair shop and Chinese suppliers would routinely send us obviously damaged or used parts that they advertised as new. Not to mention more than one report of Chinese companies selling foods tainted with heavy metals. I’ll pass for now.

As for tariffs-why not? They’ve protected their own auto industry for years by forcing any who wanted in to partner with domestic companies-likely resulting in the IP theft they used to get a running start on building globally competitive cars. The Chinese govt also heavily subsidizes science R&D in a way the US doesn’t and lastly I don’t see what the issue is with wanting to protect american jobs, the Europeans do and no one here bats an eye. I’m not a big fan of American car companies in general but I don’t think it’s going to be a net positive for Americans if the Chinese wipe out the US car manufacturers or a large portion of the Japanese auto industry.

Brock Wilhelm
Brock Wilhelm
2 months ago

I bet pretty soon you will be able to buy an Electric Car from Temu.

Ranwhenparked
Ranwhenparked
2 months ago
Reply to  Brock Wilhelm

Temu Motor Buggy, calling it

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