The influx of new brands into the Australian auto market presents opportunities—and the potential for blood on the floor.
The Australian new car market is heading for a reckoning. Even before factoring in macroeconomic conditions, the entry of new brands is set to trigger significant disruption.
Depending on how you count them, nearly 50 car brands are already competing in the Australian market. Over the next 12-18 months, as many as a dozen more could join them.
Some of these new entrants will target the budget-conscious, while others aim higher upmarket. Many—but not all—will be EV-only. Some will stick to traditional dealer-based models, while others will pursue direct sales or omni-channel approaches.
All of them will compete for experienced automotive talent.
More importantly, they will vie for the attention of a consumer whose focus is increasingly fragmented. These buyers are grappling with long-term higher interest rates, rising cost of living pressures, and an auto industry rife with competing claims—brands which in some cases use misinformation as a marketing tool.
In one of the world’s most competitive car markets, this is a recipe for—understatement alert—significant disruption. Add in the Australian auto ecosystem’s less-than-convincing commitment to electrification, and things become even more complex.
It goes without saying that new brands will need to excel to break through. To displace established players and overcome default purchase choices, they’ll need to innovate, meet buyers where they are, and ensure that interacting with their unproven brands is, as the consultants say, “frictionless.” Most crucially, some will need to craft a compelling narrative about why Australians should go electric.
Frankly, I’ll be surprised if more than a quarter of these new brands can navigate the complex landscape ahead.
Most will land in Australia with a pipeline full of product and a mandate to get vehicles onto driveways as quickly as possible. While there will be talk of building brands and growing the market sustainably, this is likely to last only until the second boatload (okay, maybe the third) arrives.
With many established brands already grappling with ballooning stock levels, it’s likely we’ll soon see a return to pre-COVID levels of discounting and phantom registrations.
While that may benefit consumers in the short term, the medium- and long-term damage could be significant. It’s quite possible that some of these new brands will come and go quickly, leaving behind the expected collateral damage to staff, stakeholders, and consumers.
Struggling legacy brands are likely to collapse. Low-volume OEM operations may exit the market—some to be replaced by third-party distributors, others for good.
What’s the solution to all this? Short version: there isn’t one. Viewed as “Treasure Island” by global automakers, Australia remains an attractive market. It’s not even a case of “build it and they will come”—they will simply come.
The optimist in me sees the potential for exciting new vehicles, fresh approaches to sales, and redefined levels of after-sales service. There are also opportunities for automotive talent to thrive and for strong retail operators to scale.
But as the saying goes, be careful what you wish for. The battle lines are being drawn, and the field can only stretch so far. “May you live in interesting times” has rarely felt more apt.
petrolhedonist 