Kia 'a little nervous': Korean giant reacts to rapid growth of MG, Great Wall Motors and other Chinese car brands in Australia

In 2021, the MG ZS small SUV has surpassed all competitors in its class.

The rise and rise of Chinese brands like MG and GWM in Australia makes local Kia boss Damien Meredith nervous, but happy for them as long as they stay cheap and cheerful.

You only have to look at the 2021 sales results to see that even in a year plagued by COVID and long supply delays due to semiconductor shortages, MG and GWM had an all-time great year.

In 2021, MG was successful on the MG3 small hatchback body along with the HS and ZS SUVs, selling 39,025 vehicles in 2021, 40,770. By comparison, Volkswagen sold 37,015 vehicles in the same period while Subaru managed to sell XNUMX vehicles. .

 That was enough to put MG in ninth place ahead of Subaru in the top 10 automotive brands of XNUMX, the first time a Chinese brand has made it into this golden group.

MG may be of British origin and headquartered in London, but the brand is now owned by the Chinese company SAIC Motor and the cars are also made in China. So the brand is truly Chinese, even if it uses its "British affiliation" in the same way as the Mini brand owned by BMW. 

GWM (Great Wall Motors) is also owned by the Chinese and produces the popular Haval Jolion and Haval H6 SUVs. There were 18,384 sales recorded in 2021, ahead of Honda with 17,562 vehicles sold.

Mr. Meredith is impressed with the success of Chinese brands in Australia and believes they are filling the "cheap and cheerful" space left by Kia as it becomes more of a premium player. 

“First of all, I think they did a wonderful job. Secondly, we always knew that if we push up, they will take the void we left - specifically MG. But if we didn't focus on our brand like we've been doing for the last four or five years, we'd still be cheap and fun, which is not what we want to do with where we're going in terms of our product and where are we going with electrification,” he said.

When Kia arrived in Australia in the late 1990s, the Korean brand won Australians over with its affordable alternatives to the more expensive and famous Japanese models.

In the mid-2000s, Audi's Peter Schreyer joined Kia as global design boss, an appointment that saw its models drastically change their styling towards a more premium look. 

Since then, Kia has followed this high-end styling trajectory, with models like the new Sorento, Carnival, and the upcoming EV6 electric car not only becoming Mazda and Toyota's main competitor, but Volkswagen as well.

However, the decision to abandon a budget brand comes with risks, Mr. Meredith acknowledged. 

“We had to make this decision,” he said. 

“I mean, we talk internally all the time that because of what we have done, our wrong side is exposed, but you have to believe in the strategy that you have put in place regarding brand and brand improvement. resilience, and we think we're doing just fine."

However, Mr. Meredith is keeping a close eye on MG's growing market share. In a good month in 2021, Kia was selling around 7000 vehicles, but it typically sold between 5000 and 6000. MG hovered at just over 3000 per month in 2021, even hitting 4303 sales last June. These are very good results for any automaker, and enough to scare him.

“I get a little nervous when I see them doing 3000-3500. But look, they've done a good job and you should respect that." - Mr. Meredith.

He added that it was time for automakers already based in Australia to recognize MG and other Chinese brands as real competitors.

“I think the industry needs to understand that they are competitors – that's how we look at them,” Mr. Meredith said.

The best-selling MG in 2021 was the ZS SUV, with 18,423 vehicles sold in the year. The ZS was the best-selling small SUV under $40 in 2021, ahead of the ever-popular ASX Mitsubishi with 14,764 sales, the Mazda CX-30 with 13,309 sales, and the Hyundai Kona with 12,748 sales. Kia Seltos lagged far behind in 8834 vehicle sales.