UAE Auto Market Update: Chinese Brands Surge While Toyota Records Sharp Decline

[Chinese Automakers Take Control as UAE New Car Sales Hit a Rough Patch]

UAE New Car Market Struggles to Recover as Chinese Brands Gain Ground While Toyota Sales Slide

Dubai — The UAE new car market continues to recover from the economic disruption seen earlier this year, but the latest industry figures show the automotive sector remains under significant pressure. While long-time market leaders like Toyota and Nissan have recorded steep declines, Chinese car brands in the UAE are rapidly expanding their footprint, changing the competitive landscape of the country's automotive market.

Key Highlights

• UAE new vehicle sales dropped 35.3% year-on-year in May 2026, with year-to-date registrations down 26.3%.
• Toyota recorded its biggest monthly decline in years, while Nissan also lost ground.
• Chinese automakers including Jetour, BYD, Chery, Haval, Jaecoo and OMODA continued gaining market share.
• The Jetour T2 became the UAE's best-selling vehicle for the first time.
• EV sales grew 11% in Q1 despite the broader market slowdown.
• Used car prices softened as seasonal supply increased.

UAE New Car Market Still Searching for Recovery

The UAE automotive market remained under pressure in May 2026 as new light-vehicle registrations fell 35.3% year-on-year to 16,534 units. During the first five months of 2026, total registrations reached 97,269 vehicles, representing a 26.3% decline compared with the same period last year.

The slowdown follows the economic uncertainty triggered earlier this year, when vehicle demand weakened sharply after regional geopolitical tensions. Although May still posted a significant decline, the month showed a slight improvement compared to March and April, suggesting the market may slowly be stabilizing.

UAE New Vehicle Market Performance

Toyota and Nissan Lose Momentum

The biggest setback came for Toyota, which has traditionally dominated the UAE market. Toyota's sales declined 61.4% in May, reducing its monthly market share to 15.7%. The brand's best-selling pickup, the Toyota Hilux, suffered an even steeper 73.4% decline during the month.

Nissan also faced a challenging month, with sales dropping 34%, largely in line with the overall market contraction. While both brands remain among the country's top sellers, increasing competition is putting pressure on their long-standing dominance.

Chinese Brands Continue Their Rapid Rise

One of the biggest stories of 2026 has been the remarkable rise of Chinese automotive brands across the UAE.

The Jetour T2 became the country's best-selling vehicle in May, overtaking the Nissan Patrol for the first time. Although Jetour's sales slipped slightly by 2.6%, the model still claimed the top position, highlighting how consumer preferences are shifting.

Several other models also recorded impressive gains:

• Mitsubishi Outlander sales increased 77.8%
• Nissan Sunny surged 471.2%
• MG ZS climbed 62.1%
• Haval H9 jumped 125.5%

New Chinese brands including Chery, Jaecoo, Exeed, iCAUR and OMODA also entered the rankings, reflecting growing buyer confidence in value-focused SUVs and electric vehicles.

Biggest Winners in the UAE Market

EV Market Continues to Outperform

While overall vehicle demand weakened, the UAE electric vehicle market continued growing.

EV sales increased 11% during the first quarter of 2026, pushing electric vehicles to an 8.5% market share, making the UAE one of the leading EV markets in the GCC.

Affordable Chinese EVs, expanding charging infrastructure, and continued government support under the UAE's Net Zero strategy have helped maintain strong consumer interest.

Among recent launches, the BYD Ti7 emerged as the most popular new electric vehicle, followed by the BYD Song Plus, Denza B8, iCAUR V27, and BYD Seal.

Used Car Market Enters Seasonal Slowdown

The UAE used car market has entered its annual summer slowdown.

As expatriates leave the country during the holiday season, more vehicles are entering the market, increasing inventory while reducing buyer demand. Listing volumes typically rise between 15% and 20% from May through August, placing downward pressure on asking prices.

Dealers are also clearing remaining 2026 inventory before 2027 models arrive, adding more nearly-new vehicles to the used market and giving buyers additional options.

Lower Fuel Prices Bring Some Relief

One encouraging development for motorists has been lower fuel costs.

Petrol and diesel prices declined during July after four consecutive months of increases. While fuel prices remain an important consideration, buyers are increasingly prioritizing fuel-efficient hybrids and electric vehicles to reduce long-term ownership costs.

Outlook

Official June and July registration figures are still pending, making it too early to confirm whether the market has fully turned the corner.

However, one trend is becoming increasingly clear: Chinese car brands have firmly established themselves as major players in the UAE automotive market. As Jetour, BYD, Chery, Haval, Jaecoo and OMODA continue expanding, traditional leaders such as Toyota and Nissan face growing pressure to defend their market share during the second half of 2026.

Figures are based on industry sales-tracking data through May 2026, the latest month for which complete UAE vehicle registration data is available.