Australia's car market, mapped

Australia hasn't built a car since 2017. Every single new vehicle on the road here — 1.24 million of them last year — was shipped in from somewhere else. That one fact quietly runs the whole industry: brand rankings, sticker prices, and even which country's factories are winning are all downstream of trade agreements most buyers never think about. This is a full pass through that market — who's selling, what's shifting, and exactly what it costs to bring a car across the border from each of its major sources.

1. The market, at scale

New vehicle sales hit 1,241,037 units in 2025, edging out 2024's 1,237,287 for a third consecutive annual record, if a modest one — growth of just 0.3%.¹ Two other sources put the 2025 total closer to 1.21 million,² a ~30,000-unit gap likely down to differing reporting windows; the 1,241,037 figure is the one that reconciles cleanly against the detailed segment data below, so it's the number used throughout this piece.

Zoom out and the industry is genuinely large: AUD $183.4 billion across the automotive sector in 2025,³ supporting close to 4,000 dealers and, by the industry's own count, something like 410,000 jobs once everything downstream of a sale — finance, parts, servicing — is included.⁴ It also hands government $6.4 billion a year in taxes and charges,⁴ which is worth keeping in mind once the tax structure below starts looking punitive.

2026 has kept pace: 108,760 sales in August alone, up 4.9% year-on-year⁵ — the strongest single month of the year and a sign the record streak isn't done yet.

2. Who's selling: market share by brand

Toyota has finished first for 23 straight years⁶ and 2025 was no exception — 239,863 sales, roughly one in five new cars sold in the country. But the chart below is really a story about the rest of the list: half of the top 15 fell year-on-year, while two Chinese brands, BYD and GWM, both grew by double digits.

By August 2026 the picture had sharpened into something closer to a split market. BYD held the #2 spot for a fifth straight month, Tesla jumped to #3 on a 162.6% year-on-year surge, and Geely — a name barely on the radar a year earlier — grew 1,023.2%.⁸ Meanwhile Toyota, Kia, Mazda, Hyundai and Ford were all down over the same month. Every Chinese brand and Tesla, up; every established incumbent in the top 10, down. That's not noise — it's a share transfer in progress.

3. What's selling: top models

Utes still anchor the market — the Ford Ranger was Australia's best-selling vehicle for a third consecutive year, ahead of the Toyota RAV4 and HiLux⁹ — but the composition underneath is changing fast. The Tesla Model Y placed 10th for the full year, then briefly overtook everything in August 2026, becoming the first EV to top Australia's monthly sales chart outright.¹⁰ On a full-year basis the Ranger and HiLux are still comfortably ahead; the Model Y's month at #1 reflects one very strong delivery period, not a reversal of the ute era — yet.

One nameplate deserves a callout on its own: the BYD Shark 6, a plug-in hybrid ute, sold 18,073 units in its first 12 months on sale — enough to make it the best-selling plug-in hybrid of all time in Australia, and Australia is now BYD's single largest market for the model globally.¹¹ It's a preview of where the ute segment is headed as diesel gets squeezed by both fuel costs and emissions rules (more on that below).

4. What kind of car: segments and powertrains

SUVs are no longer a segment, they're the market: 61.1% of everything sold in 2025.¹² Traditional passenger cars — sedans, hatches — have shrunk to just 13.3%. Utes and vans (light commercial) hold a steady 22%.

The powertrain mix for 2025 still looks conventional — petrol and diesel together were 67.7% of the market. What it hides is the trajectory. Battery-electric share climbed from single digits to a record 24.9% in August 2026, the first month EVs outsold petrol, diesel and hybrid individually.¹³ The road there wasn't smooth, and FCAI's own chief called 2025's EV growth "anaemic"³ — but 2026 has been a different story entirely.

Two policies are doing most of the pushing. The New Vehicle Efficiency Standard, in force since January 2025, fines manufacturers $50 per gram of CO₂/km their fleet averages over a declining cap — for utes, that cap drops from 180g/km this year to 110g/km by 2029.¹⁵ Nineteen brands were already facing penalties in the first reporting period, Mazda, Nissan, Hyundai and Subaru among the most exposed.¹⁶ And the federal EV tax discount — a full fringe benefits tax exemption on eligible EVs bought through a novated lease — stays in full through March 2027, then narrows to vehicles under $75,000.¹⁷ Around 47% of all BEVs sold in 2025 went through exactly that kind of lease,³ which tells you how policy-sensitive this demand really is: expect a rush of purchases in early 2027 as buyers beat the deadline, then a lull.

5. The import equation: duty, GST, and luxury tax

Here's where the "nobody builds cars here" fact actually bites. A new vehicle landing in Australia can stack up to three separate charges before it ever reaches a showroom floor:

1. Import duty — 5% of the customs value, but only for countries without a free trade agreement with Australia. As the map below shows, that's now a shrinking minority of the market.¹⁸
2. GST — 10%, calculated on the customs value plus duty plus freight and insurance. It's a tax on a tax: duty gets charged first, then GST applies on top of the duty-inclusive total.¹⁹
3. Luxury Car Tax — 33% on the amount by which a car's price exceeds a threshold. For 2025–26 that threshold is $91,387 for fuel-efficient vehicles (tightened this year to require 3.5L/100km or better) or $80,567 for everything else — plus a new $120,000 threshold created specifically for zero-emission vehicles.²⁰ Free trade agreements remove the import duty; none of them touch LCT, which is a domestic tax, not a border tariff.²¹

On top of all that, every vehicle needs Australian Design Rules certification before it can legally be sold — a compliance step that exists independently of price or origin²² — and buyers pay state-based stamp duty at registration, which varies enough that the same $40,000 car costs roughly $1,200 to register in Queensland or NSW and noticeably more in Victoria or WA.²³

6. Where the cars actually come from

This is the part that makes the tariff structure matter in practice. Click a country on the map for its 2025 import volume, share, and exactly what it pays to get a car into Australia.

Country	2025 volume	Share	Tariff	Basis
Japan	358,981	28.9%	0%	JAEPA
China	252,928	20.4%	0%	ChAFTA
Thailand	249,958	20.1%	0%	TAFTA
South Korea	149,966	12.1%	0%	KAFTA
Germany	54,905	~4.4%	0% (from Mar 2026)	AEUFTA
United States	31,912	2.6%	0%	AUSFTA
Mexico	19,281	~1.6%	unconfirmed	possibly CPTPP
South Africa	12,612	~1.0%	unconfirmed	no FTA identified
United Kingdom	12,496	~1.0%	0%	A-UKFTA
Turkey	10,562	~0.9%	unconfirmed	no FTA identified

Add up the confirmed zero-tariff sources — Japan, China, Thailand, South Korea, Germany, USA, UK — and they account for roughly 90% of everything imported. Free trade has effectively eliminated the tariff as a competitive factor between a car's major countries of origin; what's left is pure competition on price, spec and brand.

China's rise lines up almost exactly with its tariff position: the China-Australia FTA phased vehicle duty from 5% to zero over a ten-year window that completed around 2025, putting Chinese-built vehicles on the same zero-tariff footing as Japan, Korea and Thailand right as China's manufacturers — BYD, GWM, MG, Chery and a wave of newer entrants — became genuinely competitive on product, not just price.²⁷ Germany's vehicles only reached that same zero-tariff footing in March 2026, under the newly signed Australia-EU trade agreement, which also cuts duty on 97.6% of all EU exports to Australia.²⁸

7. The economics underneath

A handful of forces are shaping demand independent of any single brand or model. Financing costs have climbed through 2026 — average new car loan rates for prime borrowers reached around 7.5% by June, up over half a percentage point since the start of the year, tracking consecutive Reserve Bank rate rises.²⁹ New car loan borrowing hit a record $4.96 billion in a single quarter before easing, a sign demand for finance may already be cooling as rates bite.

Cost-of-living pressure is squeezing new and used demand simultaneously rather than simply pushing buyers from one to the other — used car turnover slowed through late 2025, with average days-to-sell stretching to 47.³⁰ And just as the pandemic-era chip shortage finally cleared, a new one has emerged: a DRAM (memory chip) shortage that industry analysts expect to raise costs and squeeze feature availability — especially in vehicles with heavy display and driver-assistance hardware — through 2026, rather than reproducing the multi-month waiting lists of 2021.³¹

Retail itself is changing shape. Honda and then Mercedes-Benz both shifted to an agency model — the manufacturer sets one fixed national price and owns the stock; dealers are paid a flat fee to deliver rather than a margin to negotiate. Mercedes-Benz dealers sued over the change; in July 2025 the Full Federal Court sided with Mercedes-Benz, a decision likely to embolden other manufacturers considering the same move.

8. Outlook

Cox Automotive's published 2026 forecast called for a roughly flat market around 1.23–1.24 million units and single-digit BEV share³³ — a forecast August's actual 24.9% BEV month has already run well past, which says more about how fast this market is moving than about the quality of the forecast. Chinese brands are tracked to approach 25% market share for the full year, up from 18% in 2025 and 11.5% in 2024, with the number of distinct Chinese nameplates on sale expected to roughly triple to 90 by year's end. NVES emission caps keep tightening on a fixed schedule through 2029, meaning penalty pressure on diesel-heavy brands only grows from here unless they electrify faster. And April 2027 is already a known cliff-edge for EV demand, as the full FBT exemption narrows to cars under $75,000 — expect a buying rush beforehand and a quiet patch after.