Toyota's answer to the Chinese brands

The success of Chinese car makers in Australia has left Toyota Australia wondering how it can still stay relevant, a senior executive told CarsGuide.

Speaking at the launch of the Corolla Cross, Toyota Australia vice president of sales and marketing Sean Hanley said the emergence (or re-emergence) of Chinese brands such as GWM and MG is not a threat, even though they are clearly winning over the hearts and money of many Aussie buyers.

“Do we feel threatened? You never take a position where you feel threatened - because that would be an incorrect perception - you respect,” Mr Hanley said. 

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“We show the same respect to the Chinese competitors as we do to our Japanese, Korean, European or US competitors.

“When we see all these new brands emerging, particularly the Chinese brands which are making quite a big impression in the battery electric area, you can’t ignore. So therefore, it makes you think harder about what we have to do to position ourselves to still be relevant.”

Chinese carmakers such as MG have made serious headway into the Australian market with the brand breaking into the top 10 biggest sellers locally for the first time in February this year, and in October the MG ZS was the fifth best-selling car for the month with 2293 sales ahead of Toyota's Corolla, Mitsubishi's ASX and the Kia Sportage. 

MG was also among the first to offer the most affordable electric vehicles on the market - the MG ZS which lists for $44,990 drive-away.

Rival Chinese brand BYD more recently brought out its Atto3 to Australia with a competitive list price of $44,381 before on-road costs.

GWM’s Haval is also competing in the more affordable end of the market, and while it is yet to offer a fully electric vehicle, its Jolion and H6 SUVs are stealing sales away from more established brands such as Toyota, Mazda, Nissan and Mitsubishi.

In fact, October was the first month that GWM cracked the top 10 most-popular brands, selling 2462 units and beating out established players like Subaru and Honda.

It’s this type of fierce competition that Mr Hanley says is good for the market.

The MG ZS EV is priced at ,990 drive-away.

“The Australian car market is one of the most competitive car markets globally. We’re saturated by different brands, we’re a just over a million market on average per year and we have something like 50-plus brands represented so the ratio of competitiveness here is quite challenging, quite severe compared to other markets globally,” he said.

“We believe competition is healthy - it keeps you vibrant, it keeps you engaged, it keeps you thinking.”

It might be some time, however, before the emerging Chinese brands can outsell Toyota. 

Toyota is by far and away the market leader, accounting for around 20 per cent (or one in five) new cars sold, which Mr Hanley said comes down to more than your products. 

“Market leadership is not a right - no brand has a right to market leadership; you have to earn it. And you earn it through product behaviour and experience and contribution to society. It’s not all about product,” he said.

“So, when you ask if we are threatened - no, we’re confident in our brand, we’re confident in our strategy but we’re not complacent and we’re acutely aware that you have to work hard always.”