Is ‘China Speed’ too fast for Australia’s car market?

OPINION:

‘China Speed’ describes how Chinese companies can accelerate product development to the point it far outpaces other nations’ legacy brands or OEMs. Even Japan and Korea.

The flat hierarchy and innovation focus Chinese companies employ to hasten development has legacy brands worried, and as a new car buyer, perhaps it should worry you too.

A report titled ‘China Speed’, commissioned by management consulting firm Arthur Little, said that this Chinese management method is ”…forcing global OEMs to reconsider what innovation leadership looks like and how fast they must move to remain competitive”.

The report also noted that “unlike traditional OEMs, many successful Chinese OEMs arose from software or consumer electronics”. 

Legacy automotive OEMs traditionally validate a product with extensive testing. Many Chinese brands produce a vehicle that is developed quickly to a ‘good enough’ standard, then improve as needed via OTA software upgrades.

Nikkei Asia reported that in 2025, BYD pushed out 200 software updates in a year, while Toyota only had eight and Volkswagen five.

A source within the Chinese car industry effectively confirmed this structure to carsales: a vehicle will proceed from a concept brief to design sign-off in as little as 12 to 18 months.

They said this is something that takes an established legacy car brand four to five years to achieve.

While there’s a lot more to unpack than merely ‘China Speed’ to explain what is occurring in the Australian car market now, the key concern for car owners is what consequences may evolve for reliability, future resale value, parts supply — and increasingly, software support.

The influx of Chinese car brands and their products represents a paradigm in a market where the car parc average is more than 10 years old.

Which begs the question, will a new Chinese car purchased today be a viable proposition in ten years, when it could be up to five generations out of date?

Australia is already witnessing a form of China Speed with the sheer pace with which many existing Chinese domestic brands and models are being rolled out here.

In the last two years, more than 15 Chinese brands have either returned or are new to the local market.

In February, industry statistician VFACTS announced China had become the number one source of new cars for the first time in Australia, overtaking a position held by Japan for 28 years.

That lead has only grown since, with figures to the end of August 2026 showing one in three new cars sold this year is from China.

Any sense that the Australian new car buying public has an aversion to these newcomers is not supported by the numbers.

Part of this shift is due to the higher cost of living, which is reducing household budgets.

Given that Japanese and Korean brands no longer occupy the budget end of the market, this has also contributed to the popularity of Chinese cars which have filled that void in Australia.

GWM is the longest established Chinese car brand in Australia. It has kept each of its individual models on sale here for at least four years on average since it arrived in 2009.

However, that is changing – at China Speed.

GWM averaged only one new model or product update a year from 2016 (when the factory took over distribution from local importer Ateco) to 2021, primarily the Great Wall Steed, the Haval H2, and the older Haval H6.

In the last five years, GWM has scaled up from two brands (GWM and Haval) with four model lines and a volume of about 5000 units a year, to four brands (GWM, Haval, Tank and Ora) selling 10 model lines that deliver more than 60,000 units a year.

An additional nine to 10 new or heavily updated variants are arriving in the short term.

This includes new sub brand Wey, a luxury brand that will take aim at Lexus and Volvo, plus new Ora variants and various other updates to existing platforms.

While many Chinese car parent companies – much like legacy brands – do share platform hardware and software between various models and sub-brands, leaving variations largely to the ‘top hat’ (body, hardware, interior), the risk is that your shiny new, tech laden and luxurious Chinese car could be made redundant far more quickly than we’ve seen before.

This concern has been acknowledged in part by the Chinese government itself, which has launched a regulatory campaign requiring car makers to conduct quality audits and file proactive recall plans for safety defects.

This follows a recall in China affecting 4.3 million vehicles due to problems with emergency door-release mechanisms.

That, however, all relates to safety alone; nobody is talking about a car that won’t work in future and no-one can fix.

How might one obtain a software upgrade for an out of warranty eight-year-old EV that appears to have a suffered a software glitch resulting in total vehicle failure? Will the companies still actively support older cars a decaden or more into the future?

This is an issue facing the digitalization of new cars and it has been a problem well before Chinese cars started rolling into export markets in huge numbers.

For example, ask any 2017-model Holden owner how they’re going with updating the integrated radio and music app, Pandora: neither the car brand Holden nor the app Pandora even exist any longer.

It is widely accepted that the Australian new car market cannot harbour 80 or 90 new car brands – at least not profitably.

While we might be worried about China Speed making our older Chinese cars redundant, there’s no guarantee a legacy brand will be able to continue after sales software support either.

Added to that is the fragmentation of an effectively static-volume new car market (where there are many more makes, models and variants, competing for the same million or so buyers every year) combined with increasing vehicle complexity, not to mention supply chain issues not fully resolved since the pandemic.

This has meant that getting any car back on the road is not necessarily as quick, easy or cheap as it once was.

One thing is clear, the car industry’s future would seem to be one following the lead of consumer electronics such as laptops and phones. Simply put, we could be looking at a fast-changing and disposable car industry, coming our way at China Speed.

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