GAC, the newest Chinese automaker entering the Australian market, has declared it will not engage in aggressive price competition, opting instead for a strategy focused on profitability and long-term sustainability. The company aims to position itself as a “middle premier brand,” offering competitive pricing alongside high quality rather than simply undercutting rivals.
The Pushback Against Low-Price Tactics
GAC International president Wei Haigang emphasized that artificially low pricing is unsustainable. “We cannot choose to set a lower price just for the sake of setting a low price, as without profits we cannot make our business sustainable.” This stance comes amid a growing trend where some Chinese brands have struggled to turn a profit in Australia’s competitive market. Several dealers have even abandoned Chinese franchises due to razor-thin margins.
This dynamic is critical because long-term viability matters more than short-term sales ; a brand that can’t sustain itself ultimately fails both customers and investors.
The Competitive Landscape: Price Wars and Profitability
Several Chinese brands—including MG, Chery, and GWM—have previously engaged in price wars to secure market share. BYD, for example, currently offers Australia’s cheapest EV, the Atto 1, starting at $23,990. However, profitability remains elusive for many.
Other automakers, like Chery and Suzuki, are increasingly vocal about the dangers of constant price slashing. Chery Australia boss Lucas Harris stated that frequent price changes hurt resale values, while Suzuki aims to align pricing with customer expectations rather than simply undercutting competitors. GWM International president Parker Shi even described BYD’s approach as “too aggressive.”
GAC’s Positioning: Quality and Value
GAC’s first model, the Emzoom small SUV, starts at $25,590. While pricier than some competitors, GAC emphasizes that its vehicles offer higher specifications and trim levels for the cost. The company’s strategy is clear: it will not sacrifice profitability for the sake of being the cheapest option.
This approach recognizes that customers value long-term value over short-term savings, especially in a market where resale value and reliability are key considerations.
The Broader Trend: Sustainability Over Short-Term Gains
GAC’s decision reflects a shift among some automakers toward sustainable business practices. The relentless race to the bottom can harm brand perception, dealer networks, and ultimately, customer satisfaction.
By prioritizing profitability and quality, GAC aims to establish itself as a reliable player in the Australian market, rather than a fleeting presence driven by unsustainable pricing tactics.
