More car brands could leave NZ says Motor Trade Association CEO

As competition in New Zealand’s new-vehicle market continues to heat up, and numerous brands announce a partial or full suspension of their local operations, Motor Trade Association chief executive Lee Marshall says the “general trend” could continue.

The comments come off the back of a chaotic week of announcements. Earlier this week, Fiat distributor Ateco confirmed that it is suspending the Italian brand’s passenger vehicle arm. Then late yesterday, Inchcape issued a press release confirming it was dropping commercial vehicle brand LDV.

Speaking earlier today on the Mike Hosking Breakfast, Marshall linked the industry turbulence to rising competition from affordably priced Chinese brands. 

Asked by Mike Hosking whether more car brands could suspend operations in New Zealand or exit entirely, Marshall said: “I think the general trend is very real, which is that you’ve got a lot of new entrants coming into the market that are putting a lot of pressure on the incumbents.”

“Truth be told, New Zealand is a marginal market by any standard, so it’s changing the value equation for anyone that’s bringing cars in,” he added.

This week’s Fiat and LDV news are the latest in a series of brand and distributor announcements.

In August 2024, Renault’s local operations confirmed that the brand was putting its passenger car sales wing on hold whilst it would continue selling commercial vans. Earlier this year, Auto Distributors NZ (ADNZ) revealed it was dropping Opel from its line-up. And then earlier this month, Inchcape confirmed it would drop KGM. 

Across the ditch, meanwhile, Peugeot and Citroen have both exited the market. The two brands, both distributed locally by ADNZ, are still offered in New Zealand. 

On the flipside, the last 18 months have seen a raft of new car brands launch into the New Zealand market — the majority coming from China. 

The likes of Zeekr, GAC, JMC, ArcFox, BAIC, DongFeng, Farizon, XPeng, and Forthing have all either entered the market or announced plans to enter the market. Foton and Chery, meanwhile, have re-entered the market after being on hiatus.

According to Marshall, the impact of these new brands on the New Zealand vehicle market is already reflected in the sales data of the country’s most popular manufacturers.

“One of the things we’ve seen in the last 2.5 years is, if you look for example at the top six biggest selling brands in New Zealand, 2.5 years ago they made up about 55% of new vehicle registrations,” he said.

“Last month they only made up about 45% because the others, the smaller brands, are growing. And most of those are coming from new entrants, particularly out of China.

“Many of these new entrant brands coming in, they’re really confronting head on stereotypes about what they are. There’s the perception that they’re not high quality, so they’ve made themselves look and feel high quality.

“There was a perception that their technology wasn’t up to spec, now many of them have globally leading technology, particularly in terms of battery electric vehicles.”

Marshall explained that a good portion of these decisions to suspend operations or depart our market don’t come directly from the car brands, but rather from the distributor companies. 

“For example, Peugeot being removed from [Australia]. It’s not Peugeot that have withdrawn from that market, it’s the distributor that’s decided they no longer want to bring in that brand,” he said.

“[This] probably means they’re just going to put their effort and energy into something else that they think has a better long term future. And I think you’re going to see that here as well with lots of distributors making such decisions.”