Cotterill said Chinese cars are less competitive as the products are weak compared with the major players in Australia.

BYD Co Ltd focuses on the new-energy vehicle market in Australia, as the nation's conventional energy vehicle market is saturated leaving limited business opportunities, according to the Chinese battery and automaker.

Great Wall Motor Co sells its SUVs and pickup trucks in Australia as budget choices, and Chery Automobile's SUVs and hatchbacks are also positioned at low-end segments.

Toyota, Ford and General Motors currently produce and assemble cars in Australia but are reducing manufacturing capacities and plan to cease Australian production next year or in 2017.

Australia is a relatively small car market in the Asia-Pacific region and relies heavily on finished car imports from overseas. Australia's new car sales volume totaled 1.11 million last year, a decrease of 15 percent from 2013.

Australia's annual car sales were less than China's monthly volume of 1.61 million units in May.

Toyota dominated the Australian market with about 203,500 new car sales in 2014, and the Japanese brand is also popular in the used car market.

Australia's used cars market's capacity is more than double the nation's new car market.