This is software that helps a business keep track of customers and their requests. For car dealers, it can help respond faster and keep information organized.
Clutch is the company opening a new location. They’re described as “digital first,” meaning they mainly operate online but add a physical spot for pickup and help.
USMCA is the trade agreement between the U.S., Mexico, and Canada. Changes to it can affect how car parts and cars move across borders and what rules companies must follow.
“First wave” means the earlier attempt by Chinese brands to sell cars in Australia. The speaker says it didn’t go well at first, mainly because of quality and trust issues.
A “false start” means the first attempt didn’t really work out. The speaker is saying the early Chinese car push in Australia didn’t gain traction because of problems with quality.
Market share is how much of the car sales pie a brand takes. The speaker is using it to show how Chinese brands grew from a small slice to a much bigger one.
A premium market means higher-priced cars that are marketed as more upscale. The speaker is saying some brands went after that higher-end buyer, while others undercut them on price.
A dealership network is the set of car stores a brand uses to sell cars. If there are fewer dealers, it’s harder to sell; if there are openings, it can help brands grow faster.
General Motors is a big car company. In the segment, GM’s decision affected the Holden brand and led to dealers closing, which then helped make room for Chinese brands.
BYD is a Chinese car company, especially known for electric cars. The speaker is saying BYD was one of the brands that helped drive the newer wave of Chinese growth.
EVs are cars that run on electricity instead of gasoline. The episode is talking about how government rules and customer interest in EVs helped certain brands grow.
Government policies can change what kinds of cars are encouraged or rewarded. Here, the speaker says Australia’s policies made EVs more attractive, which helped certain brands grow.
This describes intense price competition among automakers, where brands try to undercut each other to win sales volume. It can pressure margins for both manufacturers and dealers, and sustainability depends on whether lower prices can be maintained profitably.
Brand partners are the car brands that a dealership is allowed to sell. The speaker says dealers have to make big choices about which brands to work with.
Showroom space is the physical retail area allocated to display vehicles for a specific brand. When dealers add new brand partners, they must decide how to split limited floor space, which affects visibility and sales effectiveness.
“Dealers have choice” refers to dealers being able to select which brands they represent and partner with. This can shift dealer leverage, especially when new brands enter a market and competition for dealer networks increases.
GFC refers to the Global Financial Crisis (late 2000s). The speaker uses it to illustrate that dealers have faced major economic shocks before and typically adapt and recover.
The pandemic refers to COVID-19 and its broad impact on supply chains, demand, and business operations. In automotive retail, it often meant inventory disruptions, staffing challenges, and shifting consumer buying behavior.
“Software-defined” means the car’s behavior is controlled more by software than by fixed parts. That can make updates and new features easier to deliver.
The EV supply chain is everything needed to make electric cars, especially battery-related parts. If a country controls more of it, they can build cars more efficiently and often cheaper.
Dealer networks are the established sales and service channels a manufacturer relies on to reach customers. Requiring new entrants to use dealer networks can help ensure consistent sales support and after-sales service.
“Biggest month ever” means sales hit their highest point in that dealer’s recent history. It’s a sign demand is very strong right now.
LIVE
Hi everyone and welcome to the April 10th, 2026 episode of the Automotive News Canada
podcast. I'm your host Greg Laysen, the digital and mobile editor at Automotive News Canada,
coming to you from just outside Windsor, Ontario, the automotive capital of Canada. Two weeks
ago on the program we heard from Tony Weber, CEO of Australia's Federal Chamber of Automotive
Industries. He talked about the presence of Chinese brands down under. Today we get the
dealer perspective from James Vruchman, the CEO of the Australian Automotive Dealer Association.
He talks to Automotive News Canada Toronto Bureau Chief David Kennedy. The two discuss the number
of brands in Australia pricing dealer networks, security and more. James offers a glimpse of
what might lie ahead for Canadian dealers and consumers. But first, a look at some of the
top Canadian automotive stories of the week. 401 Group of Companies has acquired Kitchener based
software firm Dabadu, bringing its customer management platform in-house. The group has used
the software across 50 locations for three years to speed responses and track customer data. Dabadu
will continue operating independently and expanding with new AI tools in development. Financial
terms of the deal were not disclosed. Sticking with retail, Clutch has opened a second Ontario
retail hub, this time in Ottawa's Bayshore Shopping Centre. The location will serve as a
pickup and drop-off point, adding in-person support to its digital first model. CEO Dan
Park says the move adds flexibility as the company expands across Canada. Finally, on the trade front,
US Trade Representative Jameson Greer says key issues in the USMCA talks likely won't be resolved
by a July 1st deadline. Greer says talks are progressing, but more time is needed as the
Trump administration pushes for changes. The review could lead to a renewal of the trade deal,
withdrawal or years of ongoing negotiations. That's a look at some of the top Canadian automotive
stories of the week. You can find more on those and other stories at our website, AutomotiveNews.ca.
We'll now hear a conversation between Automotive News Canada Toronto Bureau Chief David Kennedy
and CEO of the Australian Automotive Dealers Association, James Rootman.
Tell me a little bit about how Chinese automakers got started in China and about how long this has
been going on. Yeah, it looked very interesting. We've had Chinese automotive manufacturers in our
market for some time. They kind of had what I'd call two starts. Probably about 15, 20 years ago,
we had the first wave of Chinese vehicles starting to be sold in Australia. I'd call that the first
false start. They didn't gain much market traction. There were some quality issues. One of the
companies had to leave the market because of the fact that it has asbestos in its breaks.
That first wave of Chinese entrance into Australia wasn't as impactful,
but then we've had what I'd call a second wave and started just before COVID. It was interesting in
the quality over those 10 years had significantly improved. We also saw some of the Chinese brands
that we have before do a slight rebranding exercise. One of them bought the MG brand,
which is a trusted British brand. Some of them changed their name from traditional Chinese names
like Great Wall Motors to GWM and so forth. They came back to this market and started
gradually getting a little bit of market share just before COVID in 2019. They were sitting at about
less than 2%. Over COVID, a couple of things happened that really helped them grow their
market share. They navigated the supply crisis a lot better than the other OEMs. They were providing
product at a lower price point when some of the other Japanese manufacturers were trying to pitch
their product at a more premium market. I think the other thing that happened is we lost quite a
few dealerships in our country because General Motors took the Holden brand away
and Honda changed their model and rationalized their network. We had a whole lot of dealers
with vacant showrooms and prepared to give the Chinese manufacturers a chance.
Then we had others join like BYD and some of the new ones we're seeing now. The story of that is
that we've gone from less than 2% as I said in 2019 to around 20% of the market today
and growing. It's been a huge growth story, 28 new brands over five years, 750 additional dealer
locations. We're quickly resembling a situation in which you see a vehicle and you have to
sense check what's that car. It's a very interesting phenomenon and it's changing our
market in real time. Absolutely. When it comes to this second wave, are all the Chinese brands
coming in? Are they partnering with local dealers or any of them trying to go it alone
through a direct sales model or otherwise? By and large, they have gone with the traditional
franchise dealer model. Even brands like Zika, which is a premium brand and has got a direct
to customer model in other markets has decided to use a franchise model in Australia. There are
a couple of exceptions. BYD's got a slightly interesting model. They initially partnered with
one large dealer group and then have now since bright start, but they run probably more of what
you'd call a, it's more like an agency model BYD in that there really isn't much negotiation.
I think by and large, it's been traditional. There are some differences with the BYD model,
but we have not seen any Tesla type models where we're just going to direct it to customer.
Yeah. What do you chalk that up to? Are there franchise laws on the books to prevent it or is
more just partnering with local partners was the way to go? Look, I think there's nothing to
prevent them legally from becoming another Tesla, but I do think though that when you look at
Australia's geography, it's probably not too different from Canada. You've got a lot of these
Chinese brands who really want to take advantage or not take advantage. They really want to get
volume into our market as quickly as they can. I think they've seen the challenges of trying to
do that in a country like Australia on their own. I think they've just sort of trying to leverage
existing networks so that they can have that geographical footprint immediately. Also, to be
frank, I think in Australia, we've had a couple of brands, Mercedes-Benz and Honda, moved to agency
model in recent years. It hasn't worked for them. They've both lost market share significantly. I
think anyone looking at this market and choosing which model to go with is looking at the top
performers and they're generally employing the franchise model. Yeah, that makes sense. Great.
When it comes to what Chinese brands are selling, is it predominantly EVs that they have on the
market or are they offering a full lineup of vehicles? No, look, I think they definitely
dominate the sale of EVs in Australia. I think we looked at total EV sales in the past few years,
and by and large, 80% of those come from China. Now, that does include Tesla, Tesla vehicles in
Australia are manufactured in China, but yes, the Chinese sort of exports dominate the electric
market, but there are a lot of Chinese products competing with hybrid drivetrains, diesel and
petrol drivetrains. GWM, for example, has made quite a few inroads into that sort of light commercial
vehicle market or sort of traditional hybrid SUVs. Look, there's no doubt that they are
able to bring electric product to market at a much better price point than their competitors,
but they're not surrendering and refusing to play in those traditional Australian
preferences around petrol, diesel and now growing hybrid. Yeah, and just to double
back on the internal combustion engine side of things, do they have products across all
sorts of different categories? I wonder partly because as you know, we have the quota coming
up here in Canada, and it doesn't include ICE vehicles actually, like they're able to bring
in ICE vehicles, basically an unlimited amount, but there's an open question on whether or not
they will. So, I'm just curious, do they offer ICE pickup trucks? Do they offer ICE SUVs? Is it
really the runs the gamut? Yeah, no, they do. They offer us SUVs. Certainly, pickups aren't
really a thing here. We call them utes in Australia, and they're generally a bit smaller than some of
the pickups you sell, but they definitely are offering utes across most segments, diesel, hybrid.
They're doing very well in that ute or pickup market in the plug-in electric. They've come to
dominate that space, which has grown in recent years. So, look, they are still offering the
gamut. There are some manufacturers who don't. BYD is purely an EV or a PHEV company.
But brands like GWM, Cherry that's doing very well has just announced that it's going to be
introducing a ute to our market, and there's another one called LDV, which is Maxis in
other parts of the world. So, no, they aren't, as much as they dominate the electric vehicle
side of our market, there is a lot more to China's rise in Australia than just EV.
Fascinating. Great. So, when it comes to this rise, I think you said about 20% market share.
What do you point to when you look at that to try to explain it? Is it simply price,
or is there more going on? Yeah, I think there's a bit more going on. So, price is no doubt one of
the key factors which have influenced their rise. But aside from price, the quality of
product is actually very good. And this was something when I was in Canada that quite a few
of the automakers who were asked about China wanted to mention that the product is good,
because there are a lot of misconceptions that it's not. So, I think price, product,
you have to say that in Australia, their emergence coincided with new government policies,
which were much more encouraging of EVs. So, their dominance in that EV side of thing definitely helped
them increase their market share. So, I think those are three of the things. The other thing I'd say
we've mentioned, even in a short period of time, that the Chinese manufacturers move at a pace that
is very different to what we've seen before. Their ability to pivot even very quickly on something
like when they understood that Australia and consumers were probably looking for the bridging
technology in terms of plug-in hybrids. There was a big swing towards plug-in hybrids from some of
those brands, and they've managed to capitalize on that interest. So, look, I think it's all
of those things, price, product, EV, but also just the scale that they bring and the speed with
which they work puts them in a big advantage. And I think the biggest one looking forward
is we've just put in place vehicle efficiency standards, which are going to make it very difficult
for brands who do not have EVs to meet those targets. So, the Chinese are well placed to meet
the new laws the government have put in place and to benefit by selling credits they've generated
from those new laws. So, they're in a very good position as we speak today.
Yeah, sounds familiar to some of what we have going on here. So, when it comes to one of the
things here, of course, I'm pretty sure it's the same in your part of the world, but affordability
has crept into the conversation more and more these days. American and Canadian pricing on
vehicles is extremely high, comparatively to what it was before COVID. So, have their rivals,
Chinese brands, some more competition, have they softened pricing at all in Australia for consumers,
or are things still creeping up? Look, I don't think we're ever going to go
back to those pre-pandemic days. By the time we got to the pandemic, we probably had a good
15 to 20 years where vehicle prices were really going down almost, and we'd seen a really good
affordability story. So, I don't think we're ever going back to those days, and especially with some
of the things affecting the world today, but there's no doubt that we're probably in a better
position. A lot of consumers are in a better position with the range of choice they have,
and especially the Chinese, as I said at the start. I think introduced product which previously
would have been the domain of the Japanese automakers, which was priced at an affordable
point and considered to be reliable. The Japanese manufacturers gradually moved a little bit more
premium in our market, and I think the Chinese came in and have definitely
sort of capitalised on some of that demand for more affordable product. It's actually quite
incredible, especially in the EV space, to see how much cheaper they can bring product to market
than their competitors in Europe and Asia. We're talking about significant price differences.
I think while the average story of affordability is probably one in which the graph has gone up,
I think if you scratch beneath the surface, consumers are still in a pretty good space
in some areas, and we're seeing electric vehicles in our market now coming in at under $30,000
Australian dollars. I think our currencies are similar, David, I'm not sure.
Usually pretty close. That's pretty affordable in my estimate. It's certainly something that's
taken a long time to get to that sort of sub-30 mark, but we now have it here. I think it's
this talk of others following suit. It's a bit of a race to try and bring the cheapest product
to market. How sustainable it is, who knows? Yeah, fair enough. For dealers, what's it meant
for your membership? Has it changed the landscape substantially? Has have dealers simply adapted
by finding some new partners and going on selling vehicles?
It's been a real challenge for dealers because when you put so much more volume into a market,
the very seldom translates into increased profitability. Dealers are now being asked
to make huge decisions on which brands they partner with. If they do take on new brands,
how much showroom space do they allocate to that partner? It's really challenging. It's
challenging to make the right decision on the right brands and maintain relationships with
your existing OEM partners. That's been challenging. It's obviously been a challenging
environment just generally. The cost of doing business in Australia, like I'm sure many other
parts of the world, has never been higher. We're paying higher costs on financing our stock, wages
have gone through the roof, things like rent and so forth. It's a tough environment. What I would
say about the arrival of some of the new brands is one positive is that it has put dealers in slightly
better position in terms of trying to pick my words, right? I don't want to say that they're
playing brands off against each other, but there is a situation in which things like
no or low profitability are no longer tolerated. Dealers now have choice. They have a lot more
choice in terms of who they represent and who they partner with than they did before.
The other thing is that dealers have valuable real estate that all of these brands want. I think
the dealers are experiencing a lot of difficulty in this rush for all these brands to be in Australia,
but there are a couple of upsides. The thing about dealers that we always say is they've gone
through crises before, whether it was the GFC, we lost local manufacturing in this country about
a decade ago, the pandemic. They always come out stronger on the other side, but I must say this
is probably going to be the biggest shakeup to our automotive industry we've ever seen. We hope
the dealers can get through it like they did those other crises, but I'm sure they will.
No doubt. Excellent. I've just got a few more here. One of the things that is constantly coming
up in North America is concerns about software, hardware data security, cyber security when it
comes to Chinese vehicles. Is that something that comes up in Australia as a bit of a concern
at the government level or consumer level, or is it a little bit less of a concern in your part of
look? We certainly hear concerns about it occasionally. We hear reports from North America.
It was actually President Biden who launched the first investigation into Chinese software and
Chinese vehicles. It's not something our government has specifically spoken about or linked to
China, but it's obviously something that I'm sure gets discussed behind the scenes.
As an industry, I've asked our government just to realize that there are a lot of dealers who
invested in these relationships and so forth. There might be a situation down the track where
changes are made to some of our import standards around which information can be collected in the
software system of a vehicle. Those conversations have not been formalized yet, but I've got no
doubt they're happening in official circles. It must be said, we now have quite a few Chinese
cars on our roads. There's probably an idea that that ship's almost sailed. We also have,
I'm sure, like other parts of the world, a lot of other products which should be considered
software defined with its mobile phones, televisions, things with cameras, and so forth.
It's probably one of the important ones where we have to put it into perspective, but it is
something that I think is in the back of a lot of policymakers' minds.
Yeah, it makes sense. Just a little bit of forward-looking thought here when it comes
to Chinese brands in the market. I'm sure you've done some modeling. Where do things lead here
over the next few years? Is it going to be a position of dominance? Is it going to be
growth and absorption throughout the rest of the market? Tell me what you expect to happen here.
Yeah, look, we've actually done some modeling. I'm happy to share that with you. It basically
tells us that the Chinese growth story will continue. We've modeled out to 2035 and we think
China will have 43% of our market at that stage. The other interesting thing will be that Japan
will still be a large player in our market by that year, as will the Koreans. To a lesser extent,
Thailand, who we get a lot of our youth product from at the moment, but very little will be coming
in from places like Europe and North America by that stage. That's the modeling we've done.
Some of our members have looked at our modeling. They looked at what's happening with China and
they think we might be undercalling it, but we'll revise that at some stage. But I guess the story
is one of continued growth. The reasons our modeling found that is firstly, the emissions
regulations really do benefit the Chinese and their control of the electric vehicle
supply chain. Secondly, just the way China, like no other automotive market, has managed to
produce what bring down cost of production. No other market, as we see it, has managed to do that.
And they have with all the scale, and to be frank, all the incentives they're getting from
both national and local governments. So we think it's a story in which their growth trajectory
continues. But that's based on a number of facts we're seeing today. Those facts could change.
But as we speak today, they look well placed to be the major player in our market.
Excellent. And just seeing how I know you spent a little time in Canada, I'm sure you talked to
a bunch of dealers about this and spent a little time with folks. I'm just wondering,
I think you probably got the same impression from people as me that there's an awful lot of fear
and there's some excitement here from dealers and otherwise. Is that the right attitude to be
heading into this with? Yeah, look, I think so. I think you need to be excited about the future,
but you also need to trade with caution now. I see the policy that the governments come to,
which is a gradual easing of import restrictions is interesting. I don't know if that's the right
solution, but I don't mind the concept of allowing new manufacturers who are being
supported pretty aggressively by their local governments, local and national governments.
I don't mind the concept of trying to attach some conditions to their emergence in your market.
That may be some things like compelling them to join NAIDAC, ensuring that they go through
dealer networks. That's some of the things I'd be interested in is trying to establish some
patterns of behaviour before they get there. And that might, who knows what that is, but
I think the reality is once they are in Canada, customers will be the ones making the decisions.
And our experience here is that they have found a pretty strong place in the hearts of customers.
And I think that's when I think of a quarter of 50,000. You might be causing some angst amongst
the customers who miss out on some of those. One thing I can tell you is since I'm expecting the
Chinese made number for the next sales period to go up significantly, we're hearing from
electric vehicle dealers in our market since this Middle East crisis began. And there is an
absolute run on EVs. We're looking at our biggest month ever for March.
I'd like to thank James for his time and David for conducting the interview.
If you'd like to be a guest on the show, have a suggestion or simply want to comment,
email me at glason at AutoNews.com. And remember, you can listen to all our previous podcasts on
Spotify, iTunes, Google Play, or on our website, automotivenews.ca. Just scroll to the podcast
hub in the middle of our homepage. And don't forget, you can follow Automotive News Canada on X,
where we're at AutoNews Canada. You can find me there too under at G-Lacin, A-N-C.
Finally, look for us on LinkedIn. Just search Automotive News Canada. That does it for this
episode of the Automotive News Canada podcast. We hope you'll join us next time. So long, everybody.
About this episode
Dealer association CEO James Rootman explains how Chinese automakers surged in Australia from a first, weak wave 15–20 years ago to a second wave that accelerated around COVID. He credits improved quality, aggressive pricing, better supply-chain execution, and a dealer-network shakeup after Holden’s exit and Honda’s rationalization—plus rapid pivots toward plug-in hybrids. Rootman says most Chinese brands use franchise dealer models (BYD is more agency-like), dominates EVs (about 80% of EV sales), and still offers ICE/ute lineups. He also touches on cyber-security concerns, dealer profitability pressures, and modeling that projects Chinese brands reaching ~43% market share by 2035.
401 Group’s AI buy; Clutch expands; slow trade talks. Plus, Australian Automotive Dealer Association CEO James Voortman offers a glimpse of what might lie ahead for Canadian dealers and consumers once Chinese brands land in Canada.
