China is rapidly becoming one of the largest sources of new cars for Australian buyers with Chinese carmakers’ increasing dominance of electric vehicle sales in their home market potentially accelerating the transition off fossil-fuel powered transport.

In 2022, sales of Chinese-made vehicles in Australia totalled 122,845 units, a 61.1% increase on the previous year, according to Federal Chamber of Automotive Industries data. In December, imports from China were more than double a year earlier.

The increase made China the fourth-largest import source, narrowing the gap with larger rivals. Cars sourced from Japan still dominate, making up just less than a third of the market of 1.1m vehicles even as sales declined almost 6% for the year. Imports from Thailand with 245,000, and South Korea at just over 159,000, both rose less than 10%.

The chamber’s director of communications, Peter Griffin, said China was growing as an automotive manufacturer, recasting its traditional role as a maker of components for cars assembled elsewhere.

“Increasingly … we are seeing automotive brands manufacturing entire vehicles in China and the emergence of Chinese-owned car brands,” Griffin said. “More carmakers in the global automotive market means more competition, which is a win for consumers.”

China’s car market has been the world’s largest for about a decade. Local firms have become increasingly successful at home against global brands, aided by the purchases of overseas producers such as Sweden’s Volvo or marques such as UK’s MG.

China is also becoming a significant exporter of vehicles, with shipments rising by 54% in 2022 to 3.1m, according to Caixin, a Chinese financial news service.

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Chinese groups such as BYD, which is backed by US billionaire Warren Buffett, XPeng, Li Auto and Nio make up 81% of domestic sales of electric vehicles, which positions them well to win over foreign markets as well, a report in the UK’s Financial Times said this week.

“Chinese consumers will buy about 8m to 10m EVs this year, up from record sales of 6.5m vehicles last year and 3.5m in 2021,” the FT reported, citing company and analyst forecasts. By contrast, 2023 EV sales in Europe were headed for 3m and in the US only 2m.

The chief executive of Australia’s Electric Vehicle Council, Behyad Jafari, said Australians were increasingly comfortable buying Chinese-made cars, including EVs. Well known brands, such US-based Teslas, and Polestar, a Volvo offshoot, sourced the cars they sold in Australia from their Chinese factories.

The rise of Chinese automakers will probably quicken the transition off petrol- and diesel-powered vehicles particularly as their lower-cost offerings enable more Australians to make the switch, Jafari predicted.