Suzuki to tough it out amid flood of new Chinese brands

Suzuki Australia’s long-held position as a leading brand for affordable compact cars is under threat with the flood of new Chinese brands heading Down Under, but the car-maker remains determined to combat the tougher landscape.

The rise of MG and GWM have already eaten into Suzuki’s market share in Australia, where the Japanese brand managed only 17,078 sales in last year’s all-time-record-high market – a fall of 20.9 per cent over the previous year and, besides a tumble in 2020 (15,586) during the COVID-19 pandemic, its lowest result in 27 years.

The company has fought back this year, with sales up 21.7 per cent to the end of May, but Suzuki Australia general manager Michael Pachota has told carsales that the marketplace was already overcrowded and that a dozen more brands setting up shop here could result in casualties.

“There’s no doubt about it, if it starts becoming a crowded space, it starts to get harder,” Pachota told us at the launch of the new-generation Suzuki Swift light hatch, which lines up against the equally new MG3.

“But we’ll just align our business accordingly and apply ourselves accordingly to combat that.

“It could get to a point, if it did grow very rapidly, where some manufacturers will make a decision to remove themselves from the market based on how small the pie is and the effort required to try to get here.”

Last year, almost 200,000 Chinese-built new cars were sold in Australia, making it the third most popular country of origin behind Japan and Thailand (where most of our utes come from).

Suzuki is no longer a top 10 brand in Australia, but MG and GWM have broken into this exclusive club and Tesla, which builds its EVs in China, has become a major player too.

BYD has also quickly made an impact, and has plans to reach 100,000 sales a year by 2026, while at least 12 other new Chinese brands are heading Down Under over the next couple of years.

This could be fuelled further by higher import tariffs being applied in other key markets such as Europe and the US, which are fighting against the flood of Chinese imports – particularly EVs – which threaten to destabilise the local car manufacturing industry in those regions.

Higher tariffs aren’t anticipated in Australia, which no longer has a car manufacturing industry to protect, but there are still calls in some quarters to make the landscape tougher for new budget players drawn to our low-tariff market.

Asked whether Australia should increase tariffs here along similar lines to Europe and the US, Pachota said: “Its probably not a place for a manufacturer to make a comment, based on the fact that it’s not us that are allowing so many players into the market.

“I think everyone has a place in the market and if Australia [government] believes that’s the amount of manufacturers that are allowed to be within this market, then so be it.

“That’s the competitive set I have to compete with.”

Few established western car brands offer budget-priced electric cars that can compete with the Chinese, whose economies of scale – and, reportedly, generous government subsidies – enable them to pump out EVs en masse at highly competitive prices.

The counter-argument is that more competitors will drive car prices lower, something that stands to benefit consumers.

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