Confident there’s room for a new player in the market, China’s GAC plans to establish a local subsidiary for its 2025 entry into Australia with the, mid-sized SUV, AION V
Marcus Reubenstein
China’s fourth largest automaker, GAC (Guangzhou Automotive Company) will launch its AION brand on the Australian market in 2025, with plans to sell 4,000 vehicles in its first year. The company showcased the AION V at the Mobility Live exhibition in Melbourne on October 31, lining up against new offerings from BYD, GWM, Zeekr, JAC and LDV.
With its spacious interior, premium upholstery and huge panoramic sunroof, the AION V grabbed the attention of the crowd at this industry expo.
Industry reports say up to 12 Chinese automakers plan to debut on the already crowded Australian market next year. Currently there are 68 different brands on sale in Australia, offering 380 different models, serviced by a network of 4,000 dealers across the country.
According to figures published by the Federal Chamber of Automotive Industries total new sales for the first six months of 2024 were a record 632,412 vehicles, a year-to-date increase of 8.7 percent on the previous year and surpassing the previous record of 605,522 in 2018.
GAC will have its work cut out moving into Australia, the biggest winners in sales growth have been hybrid and plug-in hybrid cars, while Australia’s appetite for gas guzzling internal combustion engine utility vehicles shows little sign of abating with the Ford Ranger, Toyota HiLux and Isuzu D-Max occupying three of the top four selling vehicles spots.
The Tesla Model Y and Model 3 fill the top two spots of EVs, with combined first half sales of 23,116 units. BYD’s Seal, Atto 3 and Dolphin occupy positions three, four and six, with total half year sales of 9,066.
Rather than a segmented market, GAC plans to focus on the headline numbers. Says Wei Haigang, General Manager of GAC International, in Melbourne for the brand launch, “The Australia market, with a potential of one million units, is also open for competition. So, if we want to have good development in the Asia Pacific region, we cannot ignore the development in Australian market”.
AION V potentially a compelling choice
The AION V on show in Melbourne was only a prototype of the model but an impressive one at that. Given its competition, when it goes to market in 2025, price could be a crucial point of difference. There’s no announcement on price but industry experts estimate a point below the MG4 EV, that sells from $39,353 to $65,670, could make the AION V an attractive mid-sized SUV option.
The top specification prototype model on display was a very well finished vehicle with options well above what one might expect from the EV offerings of legacy European and Japanese brands. However, the luxury and creature comforts are comparable to those in many Chinese brands, so price and distribution in Australia will be a key to success.
A mid-sized SUV, the AION V is an EV offering that goes up against the Toyota RAV4, which in September 2024 was Australia’s top selling vehicle.
Perhaps a better comparison is with the Chinese-made MG4 EV which in 2023 had sales of 3,134, its first year on the market. Sales across all MG models were up 17.7 percent on the previous year, boosted by pricing, brand recognition and a growing dealership network.
The company has indicated the Volkswagen ID.4 and BYD’s Atto 3 are also on its radar of models it expects to challenge.
Against that backdrop, projected sales of 4,000 in its first year would be considered a success for AION and its parent company GAC.
GAC gears up for the challenge
Despite having what looks to be a great product, the immediate challenge for the AION V is lack of brand recognition in Australia. While the brand is well established in China and already enjoys a global profile, how quickly this translates to Australian consumers is a question for GAC. With no announcement on plans to introduce any other models in the near-term, this leaves car buyers with just one choice. That’s also a quandary in setting up dealerships which, the company says, will be a major responsibility of a local subsidiary that it plans to establish.
According to Mr. Wei, “Previously we wanted a business model of selling through distributors or, as we call it, as an importer to distribute our products. But now we are considering setting up a subsidiary or joint venture to provide value services to customers.”
In May, media announcements indicated, local group, AGA Auto was appointed exclusive distributor in Australia. It is understood that GAC and AGA Auto are in the process of advanced discussions as to how the 2025 AION V launch will be facilitated, as well as customer service and support which will be key to the success of the brand in Australia.
Aside from indicating AGA Auto remains a cooperation partner, GAC did not elaborate on its specific plans for the local rollout of the AION brand.
At the Melbourne expo, AGA Auto’s Chief Operating Officer, Charles Lau confirmed that, “We’ve achieved some great milestones with GAC Motor International since 2022. Much work has been done and AGA is excited about bringing the AION brand to the Australian market in 2025.”
Another company, Greentech Auto, is in preliminary discussions to partner GAC in Australia, however, there’s no indication of any formal agreement or that it is an authorised GAC representative. GAC confirmed it is “in contact with many excellent local potential partners in Australia” as it moves towards the rollout of its first model in Australia.
In a company news release, GAC indicated, “The brand is in its preparatory phase, laying groundwork through dealer recruitment, channel development, and service system establishment.”
The company also says, “A sustainable strategy will rely on more than pricing. GAC will focus on brand value, product innovation, and local market integration, building lasting relationships with Australian consumers and positioning AION as a household name.”
Having announced a release of mid-2025 for the AION V, building dealer relationships without its flagged Australian subsidiary having got off the ground is set to be a major challenge. That said, the AION V is still a potential winner for GAC. Once established, it could shake up the mid-sized SUV market in Australia.
