How car buyers are changing the rules.
Car brands have surrounded me my entire life. I’ve worked on some of them. I’ve owned some of them. I’ve driven in many of them. While I’m not a tech-head or a car guy, I’m always interested in them as a brand because buying a new car is the most expensive brand purchase you will ever make in your life. Toyota, Nissan, Datsun, Mercedes, Volvo, BMW, VW, Jaguar, Ford, Honda, and Holden come to my immediate mind.
Recently, I’ve been surrounded by a whole lot of new, strange (to me) car brands. The other day, I caught an Uber, and as always, I checked out the brand name of the car, especially if it was a car I hadn’t been in before. “Nice car”, mate, I said. “What’s the brand name? Who makes this car?” He replied, “Build Your Dreams”. I laughed and said, “Funny joke mate”. And he was like, “No mate, Build Your Dreams built this car. We just say BYD.” I had never even heard of Build Your Dreams, and it seemed like a really cheesy name if I’m being honest. Build Your Dreams?!
Another Uber picked me up in a Polestar, and even though I see quite a lot of them on the streets, I have absolutely zero fucking idea who or what the Polestar car and brand is all about. Same with Chery. I see them on the road, but WTF is Chery? Apart from having a logo that looks like a Toyota rip-off. It got me thinking: what are all these new car brands, and where do they come from?
Made in China.
I did my research, and the simple answer is they are made in China. For decades, China has been a major supplier of auto parts globally, with an auto parts export industry valued at over $80 billion. Now, they are using their know-how to build their own cars and their own car brands, especially in the EV sector. The Chinese government kick-started this about fifteen years ago by providing substantial subsidies and incentives for EV production and exports (the “Made in China 2025” initiative). This fuelled rapid innovation and enabled Chinese companies to invest in new brands to expand into global markets. The plan is for China to be positioned as a dominant force in the global automotive industry. China is already the world leader in EV production and technology, and they are set to control 33 per cent of the global car market by 2030. They sure got it done!
The key players and brands.
Here’s my topline analysis of the key players, their brands and their models. And, I gotta say, it’s a bloody impressive story.
BYD (Build Your Dreams): Founded in 1995. Known for its electric vehicles, BYD has rapidly gained popularity with models like the Atto 3 and Seal.
GWM (Great Wall Motors): Founded in 1984. A house of brands that includes sub-brands like Haval, Ora (EVs), and Tank (off-roaders).
Chery: Founded in 1997. Produces a wide range of vehicles, including compact cars, SUVs, and electric vehicles, with models such as the Omoda 5 SUV and the Chery eQ1.
Geely: Founded in 1986. Acquired Volvo Cars, Polestar, and Lotus, including its Zeekr brand, high-tech Lynk & Co and EX5 electric SUV (being launched in Australia in 2025).
NIO: Founded in 2014. Known for its premium electric cars with advanced technology, offering models like the NIO ES8, the ES6 SUVs, and the NIO ET7sedan.
XPeng Motors: Founded in 2014. Creates electric cars with advanced autonomous driving capabilities, offering models like the XPeng P7 sedan and XPeng G3 SUV.
GAC: Founded in 2008. Combine modern design, advanced technology, and strong performance, offering models like the Aion Evs, GAC GS8 SUV and GAC GN8MPV.
Leapmotor: Founded in 2015. Produce affordable, tech-driven electric cars with advanced features, offering models like the Leapmotor T03 and the Leapmotor C11.
So that’s eight Chinese car manufacturers, all founded between 1984 and 2015. Each has its own brands, sub-brands, model names, and logos. And not one of these car brands is more than forty years old. In fact, most of them are ten years young or less. And in terms of car brands, that’s very young. Mercedes-Benz was founded in 1883. Peugeot in 1889. Fiat in 1899. Ford in 1903. BMW in 1916. Mazda in 1920. Volvo in 1927. Toyota in 1937. Isuzu in 1916.
Is pedigree still important?
Is pedigree still important when it comes to car brands? Remember, your car is the most expensive brand purchase you will make in your life. Are you going to trust a brand that’s been around for 8 years or 80 years? I worked on the launch of Lexus in Australia in 1990, and the biggest challenge we had to overcome was that Lexus had no pedigree. No history and no reputation. There was the history and reputation of Toyota, the company that manufactured Lexus, but Lexus wanted to distance itself as a brand from Toyota. So, we loaded up the benefits of owning a Lexus with a whole array of ‘special privileges’ – such as opening night at the Sydney Opera House – that gave the brand more prestige and status. And it worked pretty well.
But here’s the thing. People today don’t seem to care as much for pedigree when it comes to car brands. Over 120,000 Chinese car brands were sold in Australia this year, making them the third-largest source of cars in the market. The heritage, history, and reputation of these Chinese car brands obviously don’t count today as much as they did in the past. Instead, the purchase decisions of many new car buyers today are being is driven by:
Affordability.
Chinese car brands in Australia are significantly cheaper than their competitors from Japan, South Korea, and Europe, offering savings of up to 30-40% in some cases. For example, the entry-level MG ZS small SUV starts at $22,990 driveaway, whereas a comparable Toyota Corolla Cross begins at $33,000 plus on-road costs. Not to mention the 7-10 year warranties.
Advanced technology and features.
Chinese car models include (as standard) advanced features like smart infotainment systems (large touchscreens up to 15 inches), AI-powered voice assistants for hands-free operation, Autonomous Emergency Braking (AEB) and Adaptive Cruise Control (ACC), lane-keeping assist and lane departure warnings, parking assistance with 360-degree cameras, integrated apps for remote vehicle monitoring and control, customisable displays and dashboards, cloud-based navigation with real-time traffic updates, sleek exteriors with high attention to detail, leather seats, customisable ambient lighting, and advanced climate control with air purification systems. Some models even come with level 2 or 3 autonomous driving capabilities.
Electric Vehicle (EV) Innovations.
Chinese car brands are leading in affordable electric vehicles when it comes to their range and leading technology. Their electric motors deliver strong acceleration and quiet operation and come with advanced battery technology for enhanced safety and energy density, fast charging capability enabling significant range recovery in minutes, regenerative braking systems that extend the high driving ranges (up to 700 km in some models), and efficient energy management systems.
It is a competitive world, and for the automobile industry, the battle for sales just got a lot tougher. Affordability, features, and new innovations matter more to many of today’s buyers than a car brand’s history and pedigree. Traditional carmakers face dwindling brand loyalty and are being forced to rethink their customer retention strategies, including offering better warranties. All the while, the perception of Chinese car brands continues to improve as they build their trust among their new brand customers.
