Chinese brands surge +26.5% while luxury collapses -51.1%

In the first quarter of 2026, total new car sales in the UAE reached 65,969 units, down 18.6% year-on-year. Against the backdrop of an overall contracting market, three distinct trajectories have emerged across the brand landscape — Chinese brands surging, luxury players collapsing, and Japanese marques holding steady. Market fragmentation has entered a new chapter.

Cartea Insight  ·  May 14, 2026  ·  Dubai

On the surface, the headline number is grim — 65,969 units is among the weakest first-quarter performances the UAE has recorded in recent memory. But to dismiss this as "the market cooling down" would miss the most important signal of the quarter. Of the 46 brands on sale, only 7 posted year-on-year gains, and 5 of those came from China. Simultaneously, European and Japanese luxury marques have entered "freefall territory", while the two Japanese pillars — Bahrain ToyotaEgypt ToyotaKSA ToyotaKuwait ToyotaOman ToyotaQatar ToyotaUAE Toyota and KSA NissanBahrain NissanOman NissanQatar NissanUAE NissanKuwait NissanEgypt Nissan — declined modestly, well below the overall market rate. This is not a cyclical correction. It is a structural shift in share.

This is not "the market cooling down" — it is a reordering of consumer preference. Chinese brands are taking share directly from luxury players, while Japanese brands defend their base through channel depth and product breadth.

01Chinese Brands: Defying the Downturn — Up 26.5%

The Chinese brand bloc sold 13,754 units in Q1, a year-on-year gain of 26.5% — and this in a market that contracted 18.6%. Their combined share leapt from 13.4% to 20.8%, nearly doubling. A 7-percentage-point share gain in a single quarter is exceptional even by emerging market standards, let alone in a mature one like the UAE.

Bahrain JetourEgypt JetourKSA JetourKuwait JetourOman JetourQatar JetourUAE Jetour is the clear winner of the quarter. 4,665 units sold, 7.1% market share and up 30.6% YoY — not only firmly atop the Chinese brand leaderboard, but also overtaking UAE FordBahrain FordEgypt FordKSA FordKuwait FordOman FordQatar Ford to become the UAE’s 4th-largest brand overall. The gap to #3 UAE MitsubishiBahrain MitsubishiKSA MitsubishiKuwait MitsubishiOman MitsubishiQatar MitsubishiEgypt Mitsubishi (5,645 units) has narrowed to under 1,000 units. The Bahrain Jetour T2Egypt Jetour T2KSA Jetour T2Kuwait Jetour T2Oman Jetour T2Qatar Jetour T2UAE Jetour T2 alone sold 1,926 units in Q1 — roughly three times the entire Mercedes-Benz brand.

 Even more striking is how aggressively new entrants are showing up. Egypt BYDUAE BYDKSA BYDBahrain BYDKuwait BYDOman BYDQatar BYD debuted in the rankings at #11 with 1,541 units — outselling UAE Land RoverKSA Land RoverKuwait Land RoverQatar Land RoverOman Land RoverBahrain Land RoverEgypt Land Rover, UAE BMWEgypt BMWBahrain BMWKSA BMWKuwait BMWOman BMWQatar BMW and UAE TeslaBahrain TeslaEgypt TeslaKSA TeslaKuwait TeslaOman TeslaQatar Tesla in a single quarter. Denza, BYD’s premium nameplate, made its UAE debut with 406 units to land at #27. Kuwait SoueastUAE SoueastEgypt SoueastBahrain SoueastKSA SoueastOman Soueast and Bahrain YangwangEgypt YangwangKSA YangwangKuwait YangwangOman YangwangQatar YangwangUAE Yangwang also booked their first UAE deliveries. Four Chinese brands going from zero to active in a single quarter tells you everything about the supply-side ambition.

UAE MGKSA MGOman MGQatar MGBahrain MGEgypt MGKuwait MG is the one outlier inside the Chinese camp — 2,820 units, down 15.8% YoY, tracking close to the overall market decline. This reflects MG’s status as a long-standing incumbent in the UAE: unlike Jetour or BYD, which carry fresh brand momentum, MG has entered a product transition phase where its earlier growth curve is plateauing.

02Luxury Brands: Collective Collapse — Down 51.1%

The steepest decline of the quarter belongs to the luxury segment. Aggregating 10 luxury brands (Mercedes, BMW/UAE Mini, Land Rover, UAE LexusKSA LexusBahrain LexusEgypt LexusKuwait LexusOman LexusQatar Lexus, UAE CadillacOman CadillacBahrain CadillacQatar CadillacKuwait CadillacKSA CadillacEgypt Cadillac, UAE GenesisKSA GenesisBahrain GenesisOman GenesisQatar GenesisKuwait GenesisEgypt Genesis, UAE MaseratiBahrain MaseratiEgypt MaseratiKSA MaseratiKuwait MaseratiOman MaseratiQatar Maserati, Jaguar, Alfa Romeo, Lotus), combined volume fell from 9,713 units in Q1 2025 to just 4,749 — a 51.1% year-on-year drop. Their share contracted from 12.0% to 7.2%.

Mercedes-Benz endured the most dramatic collapse — 650 units sold across the entire quarter, a 70.9% YoY decline, with 1,581 fewer cars on UAE roads than the same period last year. Market share fell from 2.8% to just 1.0%, meaning Mercedes-Benz averaged just seven UAE deliveries per business day. BMW and Mini combined for 1,326 units (-53.9%); Land Rover delivered 1,385 (-43.4%). All three European luxury pillars are in synchronous decline.

Luxury brands collectively "lost" nearly 5,000 units in Q1.
Chinese brands gained 2,877 units over the same period — the share migration path is plainly visible.

The luxury collapse cannot be explained away as "the market is soft". Japanese brands fell only modestly and Chinese brands grew, so UAE consumers are clearly not delaying purchase decisions en masse. Rather, they are reallocating budget toward higher-value Chinese NEV products. New entrants like BYD and Denza arrive with 800V architecture, long range and advanced smart cabins — at AED 250K–400K price points where luxury brands simply cannot match the product proposition.

03Japanese Marques: The Stabilising Anchor

Caught between the surging Chinese bloc and the collapsing luxury segment, Japanese brands have become the stabilising anchor of the quarter. Toyota delivered 15,801 units (-15.1%) and Nissan 10,180 (-17.8%). Both brands declined, but both declined less than the overall market’s 18.6% drop — and more importantly, their combined market share rose from 38.3% to 39.4%, a 1.1-percentage-point gain in a contracting market.

Mitsubishi stands out as the most resilient Japanese performer with just a 4.4% decline. The Outlander alone surged 284.6% YoY to take 3rd place on the overall model leaderboard, ahead even of the Toyota Landcruiser SW (#4). Honda is the only Japanese brand in the Top 20 to post a year-on-year gain, with 1,103 units up 1.7%.

The Japanese bloc’s resilience rests on three structural advantages. First, the rigid demand for utility vehicles (Hilux, Patrol, Hiace, Urvan) — the Bahrain Toyota HiluxEgypt Toyota HiluxKSA Toyota HiluxKuwait Toyota HiluxOman Toyota HiluxQatar Toyota HiluxUAE Toyota Hilux and UAE Nissan PatrolBahrain Nissan PatrolEgypt Nissan PatrolKSA Nissan PatrolKuwait Nissan PatrolOman Nissan PatrolQatar Nissan Patrol occupy the #1 and #2 spots on the model leaderboard with 8,195 combined units. Second, deep dealer networks, large installed base and strong residual values that drive repeat-purchase loyalty. Third, a product matrix that spans AED 50K entry-level to AED 400K body-on-frame SUVs — meaning Japanese brands are well-positioned to capture demand spilling out of the abandoned luxury price band.