A massive shake-up is coming to the Australian new car market, with an unprecedented influx of new brands heading here from China in the next 12-18 months.
And according to Hyundai Australia’s chief operating officer, John Kett, the existing industry is “nervous” about what it could mean for the market.
Mr Kett said that there are some brands that currently play in the top 10 in Australia that mightn’t be able to maintain that position in light of the new brand onslaught and the expected aggression of the companies about to set up shop Down Under.
“I think everyone’s nervous about it,” Mr Kett said.
“We have to be confident in the things that we’re doing.
“I think, progressively, the constant evolution of our portfolio and the technology that we’re bringing, the years that we’ve been in the country and the lessons that we’ve learned and the scale that we brought — that whole business model that we started off with is now being replicated by eight or nine brands coming to the market.”
Some of the marques confirmed for our shores include Geely, Zeekr, Smart, Xpeng, Jetour, Jaecoo, Leapmotor, GAC and Aion.
It’s expected that those brands will push hard to offer buyers alternatives to the existing mainstream brands from South Korea and Japan, let alone the burgeoning businesses from China that have already taken a spot in the top 10.
The expected onslaught of affordable electric cars in light of the New Vehicle Emissions Scheme legislation – which essentially requires zero-emissions models to be more readily available to consumers among a mix of combustion-powered and hybrid choices – means the market is primed for a price war.
But Mr Kett said a price war isn’t something that Hyundai wants to be a part of.
“The changing price in the Tesla space is obviously disturbing that topic,” said Mr Kett, referring to the Model 3 and Model Y which have recently received successive price cuts in recent months.
“I think for us it’s about being clear on the type of volume we need, and when, to make sure that we meet our NVES targets, right, so that we’re not constantly revisiting the pricing,” said Mr Kett.
“So I think you’ll see us a little bit aggressive around the run-out of our Ioniq 5 and Ioniq 6 portfolio as we refresh it, but beyond that, once we set that price, we’re not trying to become number one in the marketplace in EVs today.
“I think we exited April in fifth position, and we’d like to get a bit further up between our Ioniq brand and our Kona EV, so I thought if we exited the year somewhere close to 4000 to 5000 units, then we’ve done a fairly solid job both for us and network and sustainability in that pricing.
“So I think that’s where we are. But if everyone pushes a certain way, we might have to respond,” he said, leaving the door open to repositioning ranges to have more competitive pricing.
Mr Kett suggested that he believes the battle will cause some brands to cut prices to remain relevant.
“There’s no doubt [the incoming brands] will disturb pricing,” he said.
“There’s no doubt that some of the historical top 10 brands that aren’t evolving maybe as quickly as we are in terms of HEV (hybrid) at EV will be at some risk, and the only way to offset that risk is to maybe price for it.
“But we feel comfortable that we’re well positioned as a brand offering. We’re conscious of it. We’re trying to avoid the turbulence that comes with it in terms of pricing, but that’s going to happen.”
Kia Australia boss Damien Meredith recently said that the brand will also follow a ‘believe in what we’re doing’ approach.
“It’s obvious that Australia is going to get more and more brands into the country,” Mr Meredith said at the launch of the Kia Carnival earlier in May 2024.
“You have a choice with what you do. You can go into the corner and suck your thumb. You can leave the market. You can play the discount game. Or, you can have faith, and by that, I mean what we’ll do.
“We believe in our product, we believe in our brand and we believe in our dealer network to still do the job that’s required in regards to customer satisfaction, our volume, our market share, and ensuring there is growth in our brand ongoing, even with that competition.”
