The boss of Nissan Australia says our already cluttered market is fast approaching a point where some brands are going to have to pack up shop.
“The number of competitors in the market: UK and US, 42 [and] 40, depending on the data source that you look at, some say 53, but it’s moving, dynamic,” Andrew Humberstone, managing director for Nissan Oceania, told Australian media.
“We’re 69, 70, plus 12 more coming in. They’re saying 100 brands in this country, within the next five years. That’s a very, very, very complex marketplace.
“It’s not sustainable to have, within five years, 100 brands in the market.
“The business case does not fly – simple, it doesn’t work.”
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While new brands will steal sales from existing brands, Mr Humberstone says the real victims will be customers should these upstarts fail in Australia.
“People will test and learn. Who suffers in that equation? The relationships between dealers and OEMs. But most importantly, the customer. The customer whose residual value crashed. Whose parts availability is no longer available,” he said.
Most of the new brands coming to Australia hail from China. They include Aion, GAC, JAC, Jaecoo, Leapmotor, Xpeng and Zeekr.
There’s also Foton, which is returning to Australia under distributor Inchcape.
But while Mr Humberstone said these will aim to steal sales from the top brands, they’re more likely to do damage to brands outside of the top 13.
“In this industry in Australia, there’s 3174 dealerships out there. If you look at that and you say, well, the top six brands are doing circa 600,000 out of a [total industry volume] of 1.2 million,” he said.
“So 50 per cent of volume in the top six. In the top 13, 14, 900,000, so you’ve got a significant portion of the market out there that is competing for arguably 300,000 units.
“Of course they are hoping to cannibalise from the top 13 and dilute that market share, so it’s critical that at this particular juncture that we know where we’re going with our brand and what we want to achieve.”
“Look at the number of brands that are going to be here. How many are going to stay?”
Mr Humberstone warned some of the new brands to our market could flame out, but it also seems possible they could help drive established brands out of the market.
In August, Citroen announced it was pulling out of Australia after more than 100 years of selling vehicles here.
Nissan’s history in Australia isn’t quite as long – the first Datsun came here in 1934 – but the company wants to play up its status as both a long-running and high-volume brand here.
That also includes touting its credentials as a major employer and manufacturer. While it ended local vehicle production in 1992, it still operates the Nissan Australia Casting Plant (NACP).
Opened in 1982, it produces high-pressure aluminium die-casting parts and tow bars for export and use in over 30 different models.
Nissan also claims it’s the third largest employer among carmakers in Australia, and that it has sold over two million vehicles since first arriving here.
“We would rather have this narrative and say we’re authentic, we’re incredible, we’re here to stay,” he said.
“I think it’s been a missed opportunity to just share the authenticity that we have, on being a committed investor in Australia, and arguably the most authentic brand in this market, given all of these components in terms of Australian-ness.
“I think it’s fair to say that we’re actually quite deeply rooted in the Australian history.”
That also includes offering more capable Warrior versions of the Navara and Patrol, developed in Australia by local firm Premcar.
“We’re a very strong brand. But actually, if you look at where we are, in terms of our market share, it raises a number of questions because arguably, we should be in a better position,” Mr Humberstone said, though he didn’t outline any volume targets.
Last year, Nissan sold 39,376 vehicles in Australia, making it the 12th best-selling brand Down Under.
To the end of August, Nissan’s sales are up 32 per cent on the same period last year.
It’s sitting at 31,593 sales, putting it in ninth place year-to-date. It sells vehicles through what it claims is the fifth largest dealership network of any car brand in Australia, with over 78,000 people employed within the network.
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