Australia’s new-car market is experiencing one of its most significant changes in nearly a decade.
The last major turning point came in 2017, when local vehicle manufacturing ended and the market completed its transition away from large Australian-made passenger cars towards imported SUVs and dual-cab utes. In 2026, another structural shift is taking place, but this time it is being driven by electrification, Chinese automotive brands, affordability pressures and changing expectations around vehicle value.
The total number of vehicles sold does not tell the whole story. Australia set a new annual sales record in 2025, with 1,241,037 new vehicles delivered, but the more important development is where those sales are moving. Chinese brands are gaining market share, traditional manufacturers are facing stronger competition and more Australians are considering electric, plug-in hybrid and conventional hybrid vehicles.
For buyers, this means more choice, new ownership calculations and a growing need to compare the full cost of a vehicle before purchasing. Eligible employees can explore a novated lease, estimate potential savings with Fingo’s novated lease calculator or compare broader car finance options.
Quick answer: Australia’s biggest car-buying shift since 2017 is being driven by the rapid growth of Chinese brands, expanding EV and hybrid choices, pressure on household budgets and a stronger focus on technology, running costs and overall value rather than brand loyalty alone.
What Changed in Australia’s Car Market in 2017?
The end of Australian vehicle manufacturing marked a clear dividing line in the local market.
By 2017, SUVs and dual-cab utes had already become increasingly popular, but the closure of local manufacturing formally ended the era in which large locally built sedans played a central role in Australian car buying.
Since then, imported SUVs, utes and crossovers have dominated new-vehicle sales. In 2025, SUVs and light commercial vehicles together represented almost 74% of Australia’s new-car market.
Australia’s changing vehicle preferences
| Earlier market pattern | Current market pattern |
|---|---|
| Large locally built family sedans | Imported SUVs and utes |
| Petrol-dominated model ranges | Petrol, diesel, hybrid, PHEV and EV choices |
| Strong loyalty to established brands | Greater willingness to consider newer brands |
| Purchase price as the main comparison | Total ownership cost becoming more important |
| Limited Chinese-brand presence | Multiple Chinese brands competing in mainstream segments |
The current shift is broader than a change in body style. It is changing which manufacturers Australians buy from, which powertrains they consider and how they assess affordability.
Why Are Chinese Car Brands Gaining So Much Ground?
Chinese manufacturers are increasingly competing in the centre of the Australian market rather than occupying a small or specialist segment.
Brands including BYD, GWM, Chery, Geely, MG and Omoda Jaecoo now offer vehicles across many of Australia’s most popular categories. These include small SUVs, medium SUVs, family vehicles, electric cars, plug-in hybrids and utes.
Their appeal is largely built around five factors:
- Competitive pricing
- High levels of standard equipment
- Electric and hybrid powertrain choice
- Rapid expansion into popular vehicle segments
- Favorable government tax concession, i.e. PHEV and EV FBT Exemption for novated leasing
During the first half of 2026, BYD, Geely and Chery recorded substantial growth while several established manufacturers lost volume. Carsales reported that the overall market was relatively flat year to date, indicating that much of the growth achieved by challenger brands was coming at the direct expense of existing competitors.
BYD recorded 18,881 Australian sales in June 2026, finishing only 243 vehicles behind Toyota. Chery increased its June volume by 49% year on year, while Geely more than quadrupled its sales compared with the previous June.
Quote-ready insight: Chinese brands are not only expanding Australia’s EV market. They are competing directly with established manufacturers across the mainstream SUV and family-car segments.
Is This Shift Only About Electric Vehicles?
No. Electric vehicles are an important part of the change, but they are not the whole story.
Chinese manufacturers have gained attention partly because they offer several powertrain choices at competitive prices. Depending on the model, Australian buyers may choose from:
- Petrol
- Diesel
- Conventional hybrid
- Plug-in hybrid
- Battery-electric
This flexibility matters because not every buyer is ready to move directly from petrol to a fully electric vehicle.
Some households may prefer a hybrid that does not need external charging. Others may choose a plug-in hybrid for shorter electric trips combined with petrol backup. Drivers with reliable home charging may find a battery-electric vehicle more suitable.
How the main powertrains compare
| Powertrain | Main advantage | Key consideration |
|---|---|---|
| Petrol | Familiar and widely available | Fuel costs and emissions |
| Diesel | Useful for towing and long-distance driving | Servicing and fuel expenses |
| Hybrid | Lower fuel use without external charging | Still relies on petrol |
| Plug-in hybrid | Electric commuting with engine backup | Requires regular charging for best efficiency |
| Battery-electric | Lower energy and scheduled maintenance costs may be possible | Charging access and depreciation must be considered |
Electrified vehicle demand was already rising strongly in 2025. Plug-in hybrid sales increased by 130% year on year, battery-electric vehicles reached approximately 9% of the market and conventional hybrid sales rose from 172,699 in 2024 to 199,133 in 2025.
In February 2026, EV sales increased by 95.9% compared with the same month a year earlier, while sales of petrol-powered vehicles declined by 17.7%.
Eligible employees considering a fully electric vehicle can explore an EV novated lease and request a personalised quote based on the vehicle’s eligibility and their financial circumstances.
How Is the Cost of Living Changing What Australians Buy?
Affordability is becoming more complicated than comparing drive-away prices.
Households are considering:
- Weekly repayments
- Fuel or charging costs
- Insurance
- Servicing
- Tyres
- Registration
- Depreciation
- Expected resale value
- Warranty coverage
- Finance structure
A lower-priced vehicle may be attractive initially, but buyers increasingly want strong technology, safety equipment and warranty coverage without moving into a higher price bracket.
This is one reason newer brands are gaining attention. They are often offering features that may have previously been associated with more expensive vehicles, including large infotainment displays, advanced driver-assistance systems, connected technology and electrified powertrains.
RedBook executive Ross Booth told Carsales that value for money and improved quality are central to the growing appeal of Chinese vehicles in Australia.
Expert takeaway: The current market shift is being driven by value, not price alone. Buyers are comparing how much technology, warranty coverage and performance they receive for the total amount they will spend.
Are Australians Becoming Less Loyal to Traditional Car Brands?
Brand reputation still matters, but it is no longer the only deciding factor.
Toyota remained Australia’s leading manufacturer in 2025 with 239,863 sales and a 19.3% market share. However, GWM, BYD and MG all appeared in the national top 10, showing that Chinese brands had already moved into the mainstream before their stronger 2026 performance.
By June 2026, BYD had finished second for three consecutive months, suggesting its performance was becoming more sustained rather than being driven by a single exceptional month.
Meanwhile, several established brands experienced double-digit declines as buyers moved towards challenger manufacturers and newer electrified models.
Traditional buying behaviour versus the emerging market
| Traditional approach | Emerging approach |
|---|---|
| Return to the same manufacturer | Compare a wider range of brands |
| Prioritise reputation and familiarity | Prioritise value, technology and ownership costs |
| Choose petrol or diesel by default | Compare hybrid, PHEV and EV alternatives |
| Visit a small number of dealers | Research extensively online before visiting |
| Compare monthly repayments | Compare full ownership costs |
This does not mean established manufacturers will disappear. It means they must respond more quickly with competitive pricing, improved technology, electrified vehicles and stronger value propositions.
Why Does Vehicle Origin Matter More Than Before?
Australia is now sourcing more vehicles from a broader range of countries.
In February 2026, China became the largest source of new vehicles sold in Australia for the first time in a single month. Chinese-built vehicle sales increased by 50.5% year on year, while deliveries of Japanese-built vehicles fell by 31.3%. These figures include vehicles from non-Chinese brands that manufacture certain models in China, including Tesla and Kia.
This development reflects a change in global vehicle production as well as brand preference.
China has become a major manufacturing base for EVs, batteries and increasingly sophisticated mainstream vehicles. Australian buyers are therefore encountering more Chinese-built models even when the badge itself is not Chinese.
What Does the Shift Mean for Vehicle Prices?
Greater competition may place downward pressure on prices or encourage manufacturers to include more equipment at the same price.
Potential benefits for buyers include:
- More affordable entry-level EVs
- Better-equipped SUVs
- Longer warranties
- More frequent manufacturer offers
- Wider hybrid and plug-in hybrid availability
- Faster model launches
- Greater pressure on established brands to improve value
However, the lowest advertised price is not always the lowest ownership cost.
A complete comparison should include finance, energy use, servicing, insurance and depreciation over the expected ownership period.
Fingo’s novated lease calculator can provide an initial estimate for eligible employees, but a formal quote should be based on the exact vehicle, salary, lease term and expected annual kilometres.
How Is the EV Transition Changing Finance Decisions?
The way a vehicle is financed can materially affect its affordability.
Australians may compare:
- Cash purchase
- Personal loan
- Secured car finance
- Dealer finance
- A novated lease
- An eligible EV novated lease
For eligible employees, a novated lease may package vehicle finance and approved running expenses through payroll.
Depending on the arrangement, the budget may include registration, insurance, servicing, tyres and fuel or charging costs. Eligible battery-electric vehicles may also qualify for favourable Fringe Benefits Tax treatment when all legislative conditions are met.
The best option depends on the person’s employment, salary, vehicle, annual travel and financial goals. A manufacturer discount or low advertised repayment should not be considered without reviewing the full agreement.
What Should Buyers Compare Before Choosing a New Brand?
A newer vehicle brand may offer strong pricing and technology, but buyers should still complete a broader assessment.
New-car buyer checklist
| Area | What to check |
|---|---|
| Purchase price | Final drive-away cost and applicable fees |
| Warranty | Vehicle, battery and roadside-assistance terms |
| Service network | Distance to authorised service centres |
| Parts availability | Expected repair times and supply |
| Insurance | Quotes for the exact vehicle |
| Safety | Independent rating and standard equipment |
| Running costs | Fuel, charging, servicing and tyres |
| Finance | Interest rate, fees and total repayments |
| Depreciation | Expected resale demand |
| Suitability | Range, towing, passenger room and cargo space |
A newer brand can still be a sensible purchase. The important point is to compare the whole ownership proposition rather than focusing only on equipment or price.
Will Chinese Brands Replace Traditional Manufacturers?
Traditional manufacturers are unlikely to disappear, but the competitive balance is changing.
Toyota, Ford, Hyundai, Kia, Mazda and other established brands still benefit from strong recognition, broad service networks and large existing customer bases. Many are also expanding their hybrid and electric ranges.
Chinese manufacturers, meanwhile, are introducing products quickly and competing aggressively across categories that generate significant Australian sales.
The likely result is not a market made up entirely of new brands. It is a more fragmented and competitive market in which fewer manufacturers can rely on loyalty alone.
Quote-ready insight: Australia’s new-car market is shifting from a small group of dominant brands towards a wider contest based on price, powertrain choice, technology and total ownership value.
Compare the Real Cost of Your Next Vehicle
Australia’s changing car market gives buyers more options, but more choice can also make the decision harder.
Before selecting a petrol, hybrid, plug-in hybrid or electric vehicle, compare the full ownership cost and consider how the vehicle will be financed.
Explore Fingo’s novated lease options, compare available car finance solutions or use the novated lease calculator before requesting a personalised quote.
What Is Driving Australia’s Biggest Car-Buying Shift?
The current transformation is being driven by several changes happening at the same time:
- Chinese brands are entering mainstream vehicle categories
- EV, PHEV and hybrid ranges are expanding
- Buyers are focusing more heavily on value and running costs
- Traditional brand loyalty is weakening
- Vehicle technology is improving rapidly
- Finance and tax treatment are influencing vehicle choice
- SUVs and utes continue to dominate the market
The result is one of the most important changes in Australian car buying since local manufacturing ended in 2017.
For consumers, the shift should create more choice and stronger competition. However, it also makes careful comparison increasingly important. The right vehicle is not necessarily the one with the lowest price or the most features. It is the one that best matches the buyer’s budget, driving needs and expected ownership costs.
Frequently Asked Questions
What is driving Australia’s car-market shift in 2026?
The shift is being driven by rapid growth among Chinese brands, increased EV and hybrid sales, affordability pressure, expanding model choice and stronger consumer focus on technology, total ownership costs and geopolitical induced fuel crises.
Are Chinese car brands becoming popular in Australia?
Yes. GWM, BYD and MG were all among Australia’s 10 highest-selling brands in 2025. BYD then finished only 243 sales behind Toyota in June 2026.
Is China now Australia’s largest source of new cars?
China became the largest source of new vehicles sold in Australia for the first time during February 2026. The figure included Chinese-built vehicles from both Chinese and non-Chinese brands.
Are electric vehicles responsible for the entire market shift?
No. EV growth is important, but hybrids, plug-in hybrids, affordable SUVs and the expansion of Chinese manufacturers across conventional petrol segments are also changing the market.
Are Australians buying fewer petrol cars?
Petrol vehicle sales declined by 17.7% year on year in February 2026, while EV sales rose by 95.9%. Monthly results can vary, but the figures illustrate the broader shift towards electrified alternatives.
Can I put a Chinese-brand vehicle on a novated lease?
Yes. Subject to employer participation, finance approval and vehicle eligibility, models from brands such as BYD, GWM, Chery and MG may be financed through a novated lease.
How should I compare vehicles from new and established brands?
Compare the drive-away price, warranty, service network, insurance, running costs, safety, finance, expected depreciation and suitability for your driving needs.
