Australian Car Dealerships Pivot to Chinese Brands Amid Industry Shift
Dealerships are replacing traditional European and Japanese brands with Chinese models as the Australian automotive market undergoes a significant transformation, with predictions that Chinese manufacturers could account for over half of new car sales by 2035.
Australian car dealerships are increasingly shifting away from established European and Japanese brands in favor of Chinese imports, a trend driven by market dynamics and evolving consumer preferences. The Australian Automotive Dealer Association (AADA) estimates that Chinese manufacturers will represent more than half of all new vehicles sold in Australia by 2035.
This transition is occurring amidst intense competition among 67 car brands vying for market share in Australia. AADA chief executive James Voortman noted that the rise of Chinese brands, coupled with the challenges of meeting new emissions standards, is reshaping the industry. "We have been saying for some time that not all of these brands can survive," Voortman stated.
Several brands have already withdrawn or are scaling back their operations in Australia. Citroen ceased operations in 2024 after a century in the market, and Fiat passenger vehicles followed in July of this year. Peugeot is also planning to reduce its business presence.
In Victoria, a prominent owner of Volkswagen, Mitsubishi, and LDV franchises announced the closure of its three dealerships. The company cited government legislative changes, specifically the New Vehicle Efficiency Standard, as a factor beyond its control. This standard effectively penalizes companies for selling vehicles with high emissions. The family behind these dealerships has reportedly registered a new company, Wangaratta MG, indicating a move toward selling Chinese-made MG cars.
This shift is not isolated. Essendon Volkswagen, located on the outskirts of Melbourne, has also transitioned from selling Volkswagens to exclusively offering MG vehicles, with Volkswagen sales now limited to servicing and parts. Investigations using Google Street View have revealed similar patterns at other dealerships, where former sellers of Ford and Nissan are now displaying vehicles from Chinese brands such as Chery, Omoda, and Jaecoo.
Sales figures reflect this changing landscape. Volkswagen's Australian sales have seen a notable decline, dropping 20.6% in 2025, while Mitsubishi's sales fell by 17.9% over the same period. LDV, a Chinese brand, saw its sales peak in 2023 but has sold significantly fewer vehicles so far this year.
Shaun Westcott, former chief executive of Mitsubishi Motors Australia, had previously predicted a challenging period for the industry, referring to it as a "bloodbath." He cited Australia's lack of tariffs and barriers as factors contributing to an anticipated period of excess supply. The AADA anticipates the number of car brands in Australia to grow from 67 to 75 by 2031, further intensifying market competition.