One of Australia's cheapest sedans may not continue much longer. The MG 5 has had sales drop by three-quarters in 12 months, and cars that are not SUVs are falling out of favour with Australian buyers across the board.
The continuation of the budget-priced MG 5 petrol sedan is under review after a sharp 77 per cent sales decline this year and a greater MG focus on hybrid and electric cars. For buyers who had been counting on a cheap new sedan as the entry point to a car loan, this matters.
MG Australia is not denying the situation. The brand is openly discussing a review, and it has already started pointing customers towards the more expensive MG 7 as the natural step-up.
What MG Australia actually said
"We're in the process now, as always, of just rationalising the product range, and the role of each of the vehicles is always being reviewed and considered," MG Australia marketing director Dimitri Andreatidis told media including Drive.
"As part of that, we're just receiving feedback from our dealers and customers about the role of the MG 5. We're not confirming or denying the future of the vehicle at this stage, because we're just focusing here purely on the EV. The product line-up is purely focused on how we're going to complement our EV line-up."
That is corporate hedging, but the direction is clear. When a brand says it is reviewing the role of a model, that model is not getting fresh investment. When a brand also says it is purely focused on the EV side, the petrol-only sedan is firmly off the priority list.
The numbers behind the cloud
MG head of product Meng Chen confirmed the MG 5 is still being produced, but pointed to the downturn in sales. "It's something we have been observing, the market trends and the demand for this vehicle. This vehicle in the last few months, maybe in the last 12 months, is getting down because the customer preference has started shifting," he said.
Sales of the MG 5 so far in 2026 are down 76.6 per cent from the year prior, and 82.4 per cent compared to the same period in 2024. Sales in the small cars under $45,000 segment, as defined by industry statistics, are down 11 per cent overall this year, including slumps for the popular Toyota Corolla and Mazda 3.
In short, the MG 5 is bleeding faster than the segment around it. That is not a story you can blame on broader trends alone.
The MG 7 pitch
"And also, I do want to highlight, if we consider a successor for that MG 5, MG 7 is a proper successor," Chen added. That is the closest thing to a clear positioning statement MG Australia has made on this in months.
The MG 7 is a much larger and more expensive vehicle, priced from $44,990 plus on-road costs, or about $45,500 to $47,500 drive-away. It is offered against the $29,990 MG 5, which is one of the country's most affordable new cars outright.
The maths is unkind. Asking a buyer to step from a $29,990 drive-away purchase to a $47,500 drive-away purchase is a $17,500 jump. That is not a successor in the usual sense. That is a fundamentally different price-point.
Neither vehicle is sold in Australia with a hybrid option to rival Toyota's Camry and Corolla hybrids. That gap in MG's lineup is itself part of why sales are sliding. Buyers who want a sedan in 2026 mostly want it efficient.
The safety conversation
The MG 5 attracted headlines two and a half years ago when it became one of three vehicles in more than 30 years of ANCAP testing to earn a zero-star rating, for sub-par crash protection and a lack of key crash-avoidance technology. That story still casts a long shadow over the model.
It has since been upgraded to three stars as part of a safety upgrade that saw the line-up trimmed to the top-of-the-range Essence grade, now priced from $29,990 drive-away with a non-hybrid turbo engine. Three stars is better than zero, but it is below the current segment norm of five stars that most buyers expect.
MG denies the safety story is the cause of the sales decline. Chen pointed to the brand's efforts to improve the rating from zero to three. "Not necessarily. We also have been making efforts to improve the MG 5's NCAP star, from zero stars to three stars last year. That's showing our commitment to improve the MG brand's safety commitment," he said.
Andreatidis added, "Safety is our number one priority, so that'll be our guiding line." Whether or not safety is the cause, the perception lingers in Aussie buyer forums and used-car valuation conversations. It is part of the equation any honest review has to acknowledge.
Why this is the bigger problem for MG
The MG 5 is not just a single SKU. It is the brand's foothold at the lowest possible price point in the Australian market. Without it, MG's price ladder starts higher up. That has consequences for floor traffic, finance approvals, and the brand's identity as the affordable Chinese alternative.
MG Australia has clearly decided that floor space is better used on the MG 4 electric hatch, the upcoming MG S6 EV electric family SUV, and the MG 7 sedan. That makes sense from a margin perspective. EVs and bigger sedans sell with more profit per unit than a $29,990 base sedan.
The trade-off is that the cheapest-new-car shopper has one fewer credible option in the Australian market. Brands like Kia have stepped back from cheap sedans too. The Hyundai i30 Sedan and Mazda 3 still hold the segment together but at higher prices.
What MG 5 buyers should do now
If you are looking at an MG 5 in mid-2026, the calculus is simple. Buy now if you genuinely want it, because availability is finite and stock may not be replenished aggressively if the model is being wound down.
Get the latest version with the safety upgrade, not earlier stock. Confirm the ANCAP rating in writing before signing. Push for accessory packs included rather than added. If MG dealers smell a discontinuation coming, they will want to clear stock and that benefits buyers willing to negotiate.
If you want a cheap new sedan in Australia and the MG 5 unsettles you on safety, cross-shop the Hyundai i30 Sedan, Mazda 3 sedan, and the new Kia K4. Each costs more, but each comes with five-star ANCAP ratings and longer dealer track records.
What MG owners should keep an eye on
If you already own an MG 5 and you are wondering about parts, service, and resale, the news is mixed. MG Australia is committed to supporting its existing customer base regardless of whether the MG 5 stays in the catalogue. Servicing networks remain intact and the brand has a service-cost capped program for owners.
Resale is the bigger concern. A model on the way out tends to lose value faster than its replacement. If you are planning to trade the MG 5 in within 12 to 24 months, expect a softer trade-in than you might have hoped. If you are keeping the car long-term, that does not matter.
For the broader market, this is another data point in the slow disappearance of cheap new sedans from Australian showrooms. SUVs have eaten the small sedan segment. Hybrids have eaten the petrol-only segment. The MG 5 sits at the intersection of both losing forces. Carseekers sees this trend across multiple brands every quarter, and the MG 5's review is a mainstream confirmation of where the market is heading. Cheap new sedans are becoming rare. Plan accordingly.
Considering finance for your next car? Loanseekers can help you explore car loan options.
The finer details
Your questions answered.
Is MG axing the MG 5 in Australia?
MG Australia has not formally confirmed the MG 5 is being dropped. Marketing director Dimitri Andreatidis said the future of the MG 5 is being reviewed based on dealer and customer feedback. Head of product Meng Chen pointed to the MG 7 as a proper successor. Take that as a strong hint that the MG 5 is on borrowed time.
How much is the MG 5 in Australia in 2026?
The MG 5 is now offered only in top-spec Essence form, priced from $29,990 drive-away with a non-hybrid turbo engine. That makes it one of the cheapest new sedans available in Australia. It has also been one of the cheapest new sedans not to come with a hybrid option.
Why are MG 5 sales falling so fast?
Sales are down 76.6 per cent year on year in 2026 and 82.4 per cent against 2024. The decline is driven by a general shift away from small sedans towards SUVs, lingering reputation damage from the original zero-star ANCAP rating, and a lack of a hybrid variant to match Toyota Corolla and Camry buyers.
What is the MG 7 and how is it different to the MG 5?
The MG 7 is a much larger and more expensive sedan, priced from $44,990 plus on-road costs which equates to roughly $45,500 to $47,500 drive-away. It is positioned as a Camry-rival rather than a budget Corolla rival. MG is openly calling it a proper successor to the MG 5.
Has the MG 5 safety rating actually improved?
Yes. The MG 5 originally received a zero-star ANCAP rating in one of only three such results in 30 years of testing. It has since been upgraded to three stars after a safety upgrade that improved crash-avoidance technology and pared the line-up back to the Essence grade. Three stars is still below the current segment norm of five.
Should I buy an MG 5 now or look at something else?
If you want the absolute cheapest new sedan and you accept the three-star safety rating, the MG 5 at $29,990 drive-away is hard to beat on price. If you can stretch to $35,000 to $40,000, you have safer and better-warrantied options like the Mazda 3, Hyundai i30 Sedan, and Kia K4. Walk in with a clear budget and cross-shop both ends.
