Australia’s peak automotive dealer body has called for a pause on new car brands entering the country, warning high competition from overseas manufacturers is harming the sustainability of the local industry.
The Australian Automotive Dealer Association (AADA) said the number of car makes operating in Australia had surged from 39 in 2021 to 67 in 2026, driven largely by a swathe of new Chinese EV brands.
AADA argues this influx has resulted in aggressive discounting, excessive inventory, and shrinking profit margins among local dealer networks.
In a statement, AADA CEO James Voortman said the September quarter recorded the industry’s first negative quarterly profitability result since the Global Financial Crisis.
An image of the Chinese EV brand, Zeekr, recently launched in Australia taken in Brisbane on Nov. 30. 2024. Daniel Y. Teng/The Epoch Times
“There are simply too many manufacturers operating in this market and we need a pause on further car brands entering this market,” Voortman said.
Voortman said increased competition from manufacturers is causing dealers to take on more stock and absorb the financial risks, calling it a “race to the bottom.”
Related Stories
AADA Warns of Job Losses
AADA Deputy CEO Brian Savage told The Epoch Times dealers are calling this “some of the most difficult trading conditions they have experienced.”
“Without action to address the pressures facing the industry, we are concerned that profitability will continue to deteriorate, putting dealership businesses and further local jobs at risk,” he said, warning that regional communities could be particularly affected given the industry’s role as a major local employer.
Savage said a temporary halt on new brands entering Australia would give the government time to implement policies and protections for dealers.
“The duration would depend on the progress and effectiveness of those reforms, particularly the proposed unfair trading practices protections and changes to the Australian Consumer Law,” he said.
“It is about ensuring that businesses entering the Australian market operate within a framework that supports fair and sustainable trading practices.”
Chinese Imports Reshape Australia’s Car Market
Australia relies entirely on vehicle imports after its last major factory closures with Ford shutting its doors in 2016, followed by Toyota and Holden in 2017.
While Japan, South Korea and Thailand have been traditionally been the largest source of cars to Australia, China has rapidly expanded its presence, particularly in the electric vehicle market.
A general view of the Geelong Ford plant as Ford have announced the closures of their Geelong plant and Broadmeadows factory in Geelong, Australia, on May 23, 2013. Robert Prezioso/Getty Images
“The spike in electric vehicle imports reflects changing consumer preferences, supported by growing fuel security concerns and rising fuel prices,” ABS head of international statistics Jonathon Khoo said.
China also accounted for 65 percent of Australia’s battery-electric vehicle (BEV) imports in 2024.
In July 2026, the AADA estimated that Chinese-manufactured vehicles could account for 58 percent of all imports by 2035, exceeding the 43 percent previously projected in the CIE report.
The CIE report attributed China’s rapid growth to lower production and labour costs compared to other nations, state investment in electric vehicle manufacturing, and Australia’s New Vehicle Efficiency Standard (NVES).
The NVES was introduced in January 2025 and required manufacturers to meet progressively stricter fleet-average emissions limits, encouraging the sale of more fuel-efficient, hybrid, and electric vehicles.
Unlike the EU and US, Australia Still Open to Chinese EVs
Australia has maintained a relatively open approach to overseas vehicle imports, in contrast with trade restrictions imposed by other major automotive markets.
The United States imposed a 100 percent tariff on Chinese electric vehicles in 2024, while the European Union introduced additional duties of up to 35.3 percent following an investigation into Chinese Communist Party (CCP) state subsidies.
According to the Department of Foreign Affairs and Trade, Australian tariffs on Chinese goods covered by ChAFTA were progressively eliminated by January 2019.
“The China-Australia Free Trade Agreement should never have been signed,” he previously told The Epoch Times. “It’s made us very dependent on one trading partner.”
For Challen, tariffs are about protecting local production and improving a country’s own sovereign capabilities, saying they are the “one thing that protects and defends your economy.”
