The car brands at risk of leaving Australia

There could be car company casualties in 2024 as showroom competition returns to pre-COVID levels.

New car deliveries this year will hit an all-time record around 1.2 million but times are predicted to be tougher next year.

Competition is already heating up, with various deals – from free on-road costs to no-cost accessories – on offer as real-world customer demand begins to slip thanks to the cost of living crisis.

This year’s record numbers have been driven by a catch-up on the delivery of older orders, not fresh sales, and Toyota believes things will be much tougher in 2024 and beyond.

“I see the crowding of this small market as an interesting challenge for the future. For everybody. For all players,” the vice-president of sales and marketing at Toyota Australia, Sean Hanley, told CarExpert.

He went on to predict a potential retreat by weaker brands.

“I do believe there will be a rationalisation in this industry. This will come from natural sources,” he said.

“Over times it’s hard to see how 60-plus brand can survive. It’s hard to see how that will be a sustainable business model.”

Mr Hanley would not name the brand or brands he considers to be vulnerable, but other industry experts have previously pointed to any non-niche company – the likes of Ferrari, Lamborghini, Rolls-Royce, Lotus and Ineos – which are selling fewer than 10,000 cars a year.

The Toyota executive has seen brands come and go over the past 20 years, including the high-profile failures of Infiniti, Saab, Opel and others. All were casualties of overly ambitious parent companies.

More than 60 brands are already jostling for success and more are on the way, including Cadillac – which has just revealed the all-electric strategy it will use from late in 2024 – and Nio from China.

Hyundai can also see the growing threat from China, although its chief operating officer John Kett isn’t joining Mr Hanley in predicting any failures.

Instead, he believes new Chinese brands will make early gains because of their pricing and electrification.

“They are playing an incredible game, that we played ourselves. We’re looking at them really closely, ” said Mr Kett.

“They are formidable. We’ve got to believe that price can certainly get you a long way into this marketplace. Whether can get into the top 10 or top five, the jury is still out.

“Any consumer relationship that is totally around price will never be a long one.”

For Mr Hanley at Toyota, it’s not just the Chinese brands which are creating new challenges.

“I see the crowding of this small market as an interesting challenge for the future. For everybody. For all players,” he told CarExpert.

“I believe strong market market demand over the last three years has obscured the sustainable future. We’re seeing a lot action in the franchise space. We’re seeing a lot of different models.”

Although Toyota has been sales champion for more than 20 years, Mr Hanley said the company is not going easy in Australia.

“We see it as a challenge. We’re incredibly grateful,” he said.

“Being number one is not a right. It’s an outcome of all the action.

“We don’t see anyone as a threat. We are in the most competitive car market in the world.