CMC turns to BYD and JAC as New Zealand’s vehicle market changes

Profit Growth Meets a Weaker FY2027 Start

The Colonial Motor Company Limited (NZX:CMO) has entered its new financial year with a stronger balance sheet but a less forgiving trading environment. Trading profit after tax rose nearly 5% to NZ$18.7 million for the year ended 30 June 2026, while the company paid a 40-cent fully imputed dividend.

That annual result, including the dividend increase, was detailed in the 2026 annual results, but the tone at CMC’s annual meeting was more guarded about what comes next. Chief executive Alex Gibbons said first-quarter earnings had been significantly affected by difficult economic and market conditions relative to the prior year, without providing a dollar figure or formal FY2027 guidance.

Chinese Brands Expand as Vehicle Demand Shifts

CMC said New Zealand now has 69 vehicle brands, compared with 55 in 2024, while 46 brands hold less than 1% market share. Chinese manufacturers are the fastest-growing source of new vehicles, and account for more than half of electric vehicle and plug-in hybrid sales, according to the meeting presentation.

The company attributed a sharp shift in demand towards vehicles with a plug to elevated oil prices following the Middle East conflict. Mild hybrids have also gained ground, while demand for diesel utes and SUVs has continued but with less market share than when fuel prices were lower. CMC’s retiring chair, Ashley Waugh, said he expected new energy vehicles to retain a significant share even after the initial surge in demand eases.

BYD and JAC Add Strategic Options

CMC is positioning itself between established franchise partners and the incoming Chinese brands. It has secured a relationship with Ateco and BYD in Christchurch and other regional locations, is developing further BYD dealerships, and is building its light-truck business around Chinese-sourced electric and diesel JAC vehicles. The JAC operation is gaining traction, the company said, but has started slowly in a difficult market.

Recent and planned representation includes new or upgraded facilities for BYD, Ford, Kia, Southpac Trucks and Yamaha, alongside existing investments across car, truck and tractor dealerships. CMC’s stated approach is to recycle capital into more productive facilities rather than pursue growth for its own sake. The company also plans to strengthen customer retention, stock control, dealer analytics, marketing and artificial-intelligence capability across its network.

Conservative Capital Policy Faces a New Test

Waugh defended CMC’s policy of distributing up to 70% of post-tax trading profit, arguing that franchise dealerships require continuing investment in facilities, working capital and bailment capacity. The board’s preference is to retain sufficient capital for existing operations and future representation opportunities, including the Christchurch BYD investment now under way.

That discipline may become more important as competition increases and the market consolidates. CMC said not every brand can survive in New Zealand’s relatively small vehicle market, while established businesses continue to generate returns and newer ventures require time to build customer bases and scale. Waugh also confirmed that the meeting was his last as director and chair; the filing did not identify his successor.