No more car brands for Australia, urges AADA

The Australian Automotive Dealer Association believes the rapid intake of new brands into this country has the car sales industry at crisis point.

Representing 3900 car dealers across Australia, the AADA claims the influx of new brands is leading to “financial losses and aggressive manufacturer stock targets” and “fuelling a race to the bottom” that will harm dealerships and consumers alike.

The number of brands competing for the new car consumer dollar has spiked from 39 in 2021 to 67 in 2026, with more slated to arrive on Australian shores in 2027.

AADA CEO, James Voortman, said the July-September quarter had delivered the industry’s first negative quarterly profitability result since the global financial crisis.

“This is a clear warning that the commercial settings underpinning our industry are becoming unsustainable,” he said. “The sheer number of brands arriving in Australia at a rapid pace is having profound consequences for Australian consumers and businesses alike.”

Wey is another Chinese brand slated to join the Australian market in 2027.

The AADA believes the situation “presents risks for consumers”, including the rapid depreciation of vehicles, a lag in parts supply with longer repair times, and no service or parts supply at all should brands fail.

While acknowledging that choice and competition can benefit consumers, Voortman believes the market cannot support endless growth.

“Pushing excessive stock onto dealers is fuelling a race to the bottom,” Voortman said. “Aggressive discounting erodes margins and devalues vehicles while dealers carry the financing costs and risk of unsold vehicles.”

The AADA wants the federal government to put a pause on any new car brands entering Australia – one in a list of 10 actions it says are necessary to protect the industry, including manufacturers setting realistic sales targets and providing financial relief for dealers carrying excess stock.

Open Road approached a number of manufacturers seeking comment on the AADA’s proposed measures, but all have so far declined.

“Competition safeguards matter, but their application must recognise the realities of an industry undergoing rapid structural change,” Voortman said.

“Dealers invest in local jobs, apprenticeships, technical training and the servicing and warranty support motorists rely on. Governments, manufacturers and suppliers all have a stake in keeping that network viable.”