Chinese brands claim a quarter of the Australian car market, but an accounting firm says growth won’t last

Chinese car brands are taking an increasing share of Australia’s new vehicle market, but accounting firm BDO has warned the current pace of dealer expansion is unlikely to be sustainable.

Speaking at the Australian Automotive Dealer Association (AADA) event, BDO automotive partner Sam Venn said Chinese carmakers represented 24 percent of the market in the first two months of 2026, compared to 14 percent in the same period last year.

That growth has come quickly. One of BDO’s market declines shows that Chinese automakers, when consolidated, showed a 62 percent year-over-year increase. During the same period, the overall market shrank 2 percent, or about 3,200 units, while Toyota and Mazda volumes fell 6.5 percent, or 11,725 ​​units.

CarExpert can save you thousands of euros on a new car. Click here to get a lot.

That’s a meaningful shift in a market that normally doesn’t move that quickly. It also helps explain why dealers are scrambling to secure representation of new Chinese brands and sub-brands, even as more traditional franchises come under pressure from pricing, model changes and a lower gross price up front.

But Mr Venn’s broader message was that headlines only tell part of the story. The more important question is whether the current number of brands, distributor structures and dealer points can actually support achievable returns in the medium term. BDO’s opinion was blunt in that regard.

“It’s not sustainable. It’s that simple,” he said.

The clearest evidence is in BDO’s rooftop efficiency decline (sales per dealer per month), which compared established brands with Chinese newcomers based on new car sales data from December 2025. Below are figures shared by BDO:

Among the traditional players, Toyota averaged 72 sales per roof per month, Mazda 54, Kia 48, BMW 47, Ford 41, Hyundai 39, Mercedes-Benz 30, Mitsubishi 27, Subaru 27 and Volkswagen 24. The top 10 average was 41.

On the Chinese side, some brands are already operating at a similar level. BYD was shown with 48 sales per roof per month, Chery 42 and GWM 36. MG came in at 28.

Then the picture changed quickly. Zeekr was shown at 23, LDV at 9, Geely at 7, Leapmotor at 4, JAC at 3 and Deepal at 2.

Established networks often have mature financial, after-sales and service activities behind them. That back end is what supports the company when margins come under pressure on the front end, which is already happening in much of the market.

A new badge on the building can provide new volume, but also entails real costs. Dealers must finance facilities, staffing, marketing, inventory and local brand building, all before the company has proven it can generate sustainable revenue through parts and service.

BDO’s own slide deck makes this trade-off explicit, describing it as a “front-end versus back-end trade-off for existing dealers looking to trade OEMs,” while also cautioning that return on investment from facility spend is critical.

The big Chinese brands are not all in the same position. Mr Venn’s presentation suggests that the bigger names are already mature and starting to build out at the back end, while the long tail still has quite a way to go. That is an important distinction, because the top end of the Chinese market is starting to look structurally different from the bottom end.

The other major risk lies offshore. BDO’s presentation argued that China still has too many car manufacturers, of which more than 150 are active domestically. It says there has been a significant decline in numbers on a large scale to achieve financial sustainability without substantial government support.

The reasons are not difficult to follow. BDO says China’s electric vehicle price wars have been brutal, margins have collapsed, oversupply has hit weaker brands and government policy is shifting from supporting industry losses to technology consolidation, mergers and better integration of research, development and supply chains.

This has direct consequences for Australia. According to BDO, the likely survivors will be the larger, vertically integrated groups with EV technology, scale and established export networks, citing BYD, Geely, SAIC Motor (MG), GWM and Chery as examples.

For Australian dealers, the risk isn’t just that some brands will go out of business; the bigger issue is what happens when Chinese parent companies start merging brands, changing distributor structures or rationalizing overlapping dealer networks.

Dealers may face brand closures, distributor changes and forced franchise realignments. If a Chinese parent company merges two brands, dealer networks could be completely eliminated.

That’s not a prediction from BDO that every smaller Chinese brand will disappear – in fact, we argue it’s more likely that some of the established European and Japanese brands will exit our market – but it is nonetheless a warning that dealer investment decisions made today are being made in a market that could look very different three to five years from now.

That risk is also increased by the speed at which the product side moves.

BDO says the remaining brands are likely to expand aggressively, with rapid model cycles underpinning more launches in Australia, faster price competition and potentially more factory-controlled sales networks.

In other words, the brands that survive could become even stronger competitors than they already are.

If Chinese brands just added options, the story would be clear. But they are also reshaping prices, forcing existing brands to respond and attracting dealers in a wave of investment that BDO suggests could outlive some of the brands themselves.

That is also consistent with the message put forward by AADA. In its press release today, the dealer association said 28 brands have come to Australia in the past five years, but that increase has not translated into higher dealer profits. It warned that the sector does not want to end up in a situation where dealerships close and local jobs are lost.

Chinese brands are now too big to be treated as marginal players. The top segment is already becoming part of the regular market. But the current land grab across all badges, sub-brands and dealer points is another matter entirely. Some of these bets will pay off, but undoubtedly some almost certainly will not.