THE chairman of the Australian Automotive Dealer Association (AADA), David Blackhall, has warned the industry that Chinese car makers are emerging, not from traditional auto industry sources, but from business sectors not associated with building vehicles.

And, he warned, these new Chinese car makers have client bases from their core business activities that cumulatively add up to billions of potential buyers rewarding these manufacturers with unprecedented scale.

Mr Blackhall was addressing the chairman’s dinner at the recent 2025 AADA Convention and Expo in Brisbane in which he spelled out the nature of the challenge the Australian car industry faces from China’s reshaping of the car-making world.

He opened his remarks with a well known saying: “There are decades where nothing happens and there are weeks where decades happen.” 

“That actually accurately describes the car business today,” he said. 

“After decades where the established manufacturers, selling very familiar brands, achieve market dominance, we suddenly have disruptors, some from China, some from other countries, but we are seeing potential turmoil in the competitive environment.

Mr Blackhall said that the recently revealed Xiaomi YU7 SUV car generated about 289,000 pre-orders within one hour of being announced. 

David Blackhall

“That is a pretty decent performance in an hour. And that’s an astonishing achievement for a smartphone company that wasn’t even in the car business four years ago.

He said that Bill Russo, the Shanghai-based founder and CEO of Automobility Ltd, a global strategy and investment advisory firm with particular expertise on China, told Bloomberg recently that the automotive industry is facing two types of new disruptors; what he calls the super scalers. They are brands like BYD and Geely and the ecosystem integrators like Xiaomi and Huawei. 

“The super scalers like BYD leverage tech advantages like their blade batteries and their first mover advantage to quickly scale up volume. 

“Geely, on the other hand, scales up on brand name and name plate diversity. So they currently have seven different strands to their strategy, brands or name-plates, and they will continue to add to that portfolio. Both of these companies, BYD and Geely, are already enjoying reasonably good success in Australia.

“The ecosystem integrators are Xiaomi and Huawei. They are writing a new automotive playbook. Both are consumer software companies. They start with a clean sheet and apply the learnings from their consumer successes to the auto industry.  “It’s estimated that Xiaomi has more than 600 million active monthly users of devices like phones and appliances worldwide, and these all feature their proprietary operating systems and software. Xiaomi sold about 170,000 SUV YU7s last year.”

Mr Blackhall said that Huawei just announced the Deepal S07 in China – a joint venture with Changan. “They are partnering with the Chinese giant CATL, who are experts in battery technology and tech support.

“If you see echoes of some of the other brands in the market in the styling of these new players, I would say, get used to that. That’s what they’ll do, and that’s what they’ve done successfully. 

“Xiaomi and Huawei have both connected with millions of customers who use their software. Experts say that maybe as many as three billion people globally use these brands’ proprietary software. 

“So these are game changing numbers for those who continue to think traditionally about the car business,” Mr Blackhall said. 

“Xiaomi has signaled its intention to enter the Australian market probably in 2027.  Huawei’s Australian plans might be a bit complicated by what I’d call a somewhat fraught relationship with the Australian government over the data collection aspects of what they do. But Albo has been up in China so maybe that’ll change quickly.“Research conducted by the AADA team tells us that by the end of 2026 as many as 25 additional brands will be selling cars in Australia, quite a few of them from China, including names you’ve probably never heard of. We already have about 70 nameplates on sale in Australia. 

“By 2027 we’re likely to have as many as 90 name plates, maybe more, chasing the annual total market here of 1.2 million, 1.3 million or 1.4 million at a stretch. Does it really matter? Do we really need 90 plates? It’s pretty competitive.”

Mr Blackhall said that China has strong ambitions.

“Chinese Premier Li said recently the following: ‘China is a technology company. We have DeepSeek. We have BYD’. They’re his words. That’s actually what he said: ‘We have DeepSeek. We have BYD’. 

“Then a few days later, Chinese Premier Xi Jinping signaled that he wanted to take some heat out of the domestic automotive price war raging in China. Last year, Chinese domestic car sales totaled over 31 million cars. That’s about 40 per cent of global sales, and it’s unclear how profitable all of that volume really was.

“Now, with a tariff war raging courtesy of President Trump, and with government pressure to cut discounting in China, it’s highly risky making predictions about how this is all going to play out. It’s a volatile mix, but all the production has got to go somewhere. We have a wide open market here. There is a limit to how many cars can come here, but it’ll happen, in my opinion.” 

Mr Blackhall said that making forecasts was risky “but there is one forecast I will make confidently; that dealers in this room will find ways to survive and thrive even in the coming maelstrom of product that’s arriving. It is what we do. We’ve done it over and over and over again, and we’ll do it this time.” 

Footnote: DeepSeek is a Chinese developed AI robot of impressive capacity, capability and scalability.