Chinese brand success will hinge on customer care

The head of Mazda in Australia, Vinesh Bhindi, says time will tell whether the surge in popularity of Chinese brands will be sustainable, with success measured on a car company’s customer support over many years in areas such as servicing and parts availability.

Asked about the threat Chinese brands such as MG posed to traditional car-makers, Bhindi said it was “early days” and that Australian buyers were discerning enough to look beyond the price tag and pleasing exterior designs.

“I do have to say Australian consumers are very sophisticated,” he said.

“They’re not going to just take what’s on offer just because it’s a price thing, or a design thing. You do have to demonstrate value, you do have to demonstrate support after the purchase, in service, in parts availability.

“They [Aussie buyers] do also like to be brand loyal to a large extent and engage in many products like in our expanded portfolio.

“It’s early days, and I’m sure they [Chinese brands] will have their strengths and they’ll push hard on those, but let’s see where it goes.”

Vehicles built in China were the fourth most popular in Australia last month, behind Japan, Thailand and South Korea but ahead of Germany and the United States.

Chinese brands are the among the fastest-growing, with MG now knocking on the door of the top 10 brands and GWM (Great Wall and Haval) and LDV experiencing strong growth – even throughout the COVID-19 pandemic – with attractive pricing and ongoing improvements in vehicle quality, technology and safety.

Other companies such as BYD are also planning to set up car assembly operations in Australia and recently shipped the BYD Han electric luxury car here for evaluation.

Bhindi quested the term “threat” but said he regarded every other mass-market brand as a competitor.

“We compete with every OEM [original equipment manufacturer]. I’m not sure how you describe a threat, but are they competitor? Everybody’s a competitor,” he said.

“I do hear they’ve got lots of variations available in China, [but] what plans are there to bring them here, what will comply to the safety standards we have, and who they will appeal to?

“Every OEM that comes into this country wants to grow their business, and I suppose that’s what their plans are.”

Japanese brands in Australia such as Mazda themselves faced similar issues in the 1970s, as did the Koreans in the 1980s. And now it’s Chinese car-makers’ turn.

Kia’s chief operating officer Damien Meredith said recently that the South Korean brand would not give up any of its hard-fought ground easily to the Chinese brands, vowing to protect its turf at the bottom end of the market as it continued to strengthen its position at the top end.