This year has been unprecedented in many ways, not least because Australia’s first mandatory CO2 emissions legislation for new vehicles came into force and at least half a dozen new Chinese car brands were introduced locally.
However, the full impact of these two major developments has not yet been felt, so 2026 will be a litmus test for the automotive industry for these and a number of other reasons.
However, there are far more issues in the Australian new car market than just fresh Chinese brands and the New Vehicle Efficiency Standard, and there are always a few surprises.
We don’t have a crystal ball, but here are some of our predictions for the new year.
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Some long-established brands will realize that Australia isn’t for them and start making plans to exit.
Without naming names, it is very obvious that some Japanese and European brands in Australia (and globally) are in serious trouble and are being decimated on all fronts.
If you are an automobile company that doesn’t make attractive cars in this extremely competitive market and you want to charge more than the Chinese, your lifespan in our market will be very, very limited.
Marton Pettendy
With at least six new Chinese car brands joining an already saturated automotive market this year, and several more joining next year, some of them – and some of the more established brands – could well be forced to close shop in 2026.
But the inexorable rise up the rankings of major Chinese brands such as BYD, Chery and GWM, each with ambitious local sales and market share targets, is likely to continue due to their relentless assault on new products.
As a result, market leaders such as Toyota, Ford and Mazda are likely to be left with a smaller slice of the overall pie – and of the lucrative ute segment, which by the end of next year will have more competitors and a more diverse range of options than Australians have ever had access to before.
William Stopford
The onslaught of Chinese brands is not over yet. China’s domestic market remains fiercely competitive, and automakers are looking to export markets in search of profits. And although our market is much smaller than, for example, Europe or the USA, there are no annoying tariffs to contend with.
Chinese brands already largely build cars that meet our safety standards, and they almost universally have the same hubris that they can displace brands that have been around for decades.
Well, not only do I predict that several unconfirmed Chinese brands will come here in 2026, but I also expect the market share of Australia’s leading brand – Toyota – to change little.
Certainly smaller, weaker players need to be careful, but we could reach a point where the Chinese brands have done enough damage to them and are starting to eat each other up.
Meanwhile, Toyota will continue to do well, at least for a while, helped by its vast dealer network, reputation and legion of often conservative, rusty buyers.
The Chinese have stormed into the top 10, but it remains to be seen how long it will take for one of their brands to crack the top 3… especially if they are now battling it out.
James Wong
Australia’s new emissions regulations and upcoming free trade agreements lead me to believe that European brands could make a strong comeback in our market next year.
With pricing and regulatory pressure (or lack thereof) having long been an obstacle for European brands here, we could see the gap between European and Asian brands narrowing in 2026 – and that’s already happening.
The fact that Skoda, for example, can offer the Enyaq for less than an equivalent Toyota or even Chinese competition is frankly crazy. And as other Japanese and Korean players are forced to increase prices due to factors such as Euro 6 emissions regulations and the like, we could see a shift in the market.
Renault has made great strides in its home country with its affordable electric and hybrid options, and the Volkswagen Group has a number of new products on the way. Not to mention BMW is already in the top 10 of the Australian electric vehicle sales race.
I would be interested to see where the market will be in 12 months.
Damion Smy
BYD cracks Australia’s top 5. Toyota at the top with a smaller lead. Several newer brands fold. The federal government is rejecting NVES due to pressure from car manufacturers. Mustang GT is canceled (buy one now). Toyota wins Bathurst. Piastri F1 becomes champion.
Ben Zechariah
Further turmoil in the automotive industry caused by tariffs, supply chain issues, geopolitical disputes and an ever-growing, increasingly competent and confident China.
It could even be that some major long-established car manufacturers close their doors, while others could exit the Australian market due to increasing pressure from new brands. Citroen may have just been the beginning.
Josh laughed
The return of physical controls to the car interior.
Minimalism is all well and good until it compromises functionality, and that’s exactly the case with new car interiors.
By burying important vehicle functions like climate controls in a screen, manufacturers have made cars more distracting and therefore more dangerous than they should be.
Luckily, some of the larger automakers appear to have listened to our incessant complaints. Volkswagen has committed to reintroducing dashboard switches on future models, BMW’s head of ADAS recently said Car Expert: “We’re keeping an eye on this. We see that the longer it takes you to press a button, the more your eyes are distracted from the road and the more dangerous things become.”
Australia’s independent vehicle safety agency ANCAP has also addressed this issue with its new safety testing protocols that reward physical buttons for key driver controls such as the horn, turn signals, hazard lights, windshield wipers and headlights.
With that in mind, we hope buttons and switches make a comeback in 2026.
Max Davies
Brands must evolve or deliver. Numerous Chinese brands have entered the Australian market in 2025, and while some are unlikely to last, others are making a splash.
Brands like MG and GWM are prime examples of what I mean. Both were relatively early entrants to the Australian market among their compatriots, but have since established very different approaches.
MG quickly shot up the sales charts with very affordable vehicles. Despite feedback and criticism, the media agrees that some of the latest models still need fine-tuning, even if they are improving.
GWM, meanwhile, received much of the same feedback about its vehicles and responded by setting up a permanent home at the former Holden proving ground at Lang Lang in Victoria.
Local ride and handling tunes for affordable Chinese cars? Yes, please, and kudos for making it possible.
Over time, it’s efforts like GWM’s that give an indication of whether a brand can survive in the long run. And when it comes to new brands, players like GAC – which developed vehicles together with Toyota – receive relatively high praise at launch.
How can brands like this not be a problem for others who seem to be resting on their laurels? Keep in mind that this also applies to several non-Chinese brands, as none of the established players are immune from being overtaken, outclassed and overshadowed.
Sean Lander
Out with the new, in with the new – we will see a number of newcomer brands disappear and die, only to be replaced by similarly shaped and sized brands offering the same thing with slightly different embellishments.
The Chinese car market is so big that they can afford to leave something out here that the more traditional brands can’t.
Expect some of the 2024/25 additions to disappear and be replaced by another strangely named brand. Oh, and ute sales will continue to dominate.
