The 1986 Australian Grand Prix, held on October 26, 1986, at the Adelaide Street Circuit, was the sixteenth and final race of the 1986 Formula One World Championship. The race was set to decide a three-way battle for the Drivers' Championship between Nigel Mansell (Williams-Honda), Alain Prost (McLaren-TAG), and Nelson Piquet (Williams-Honda).
Going into the race, Nigel Mansell led the championship standings with 70 points, followed by Alain Prost with 64 points, and Nelson Piquet with 63 points. Mansell needed only a third-place finish to win his first championship. Prost and Piquet both needed to win the race to keep their title hopes alive. The Williams-Honda cars, driven by Mansell and Piquet, had won nine of the previous fifteen races, and the team had already secured the Constructors' Championship at the Portuguese Grand Prix.
Nigel Mansell secured pole position for the race, 0.3 seconds ahead of his teammate Nelson Piquet. Ayrton Senna qualified third in his Lotus, 0.2 seconds behind Piquet. Alain Prost qualified in fourth position, 1.2 seconds behind Mansell. Keke Rosberg qualified seventh in the second McLaren. During Friday's qualifying, a sudden heavy downpour interrupted the session, leading to accidents for Patrick Tambay and Stefan Johansson.
A capacity crowd of 150,000 attended the 1986 Australian Grand Prix. Nigel Mansell lost the lead to Ayrton Senna at the second corner on lap 1 and was overtaken by both Nelson Piquet and Keke Rosberg later in the same lap, dropping to fourth. Piquet briefly took the lead from Senna on lap 1. On lap 7, Rosberg took the lead from Piquet and began to build a significant gap.
Piquet spun on lap 23 but continued the race. Alain Prost experienced a puncture a few laps later, requiring a pit stop and dropping him to fourth position. Piquet charged back, passing Mansell for second place on lap 44. With 25 laps remaining, the three championship contenders were running closely together in positions 2, 3, and 4.
On lap 63, Keke Rosberg retired due to a right-rear tyre failure, handing the lead back to Piquet. Prost had just passed Mansell for third, which became second when Rosberg retired. Mansell was in third position, which would have secured him the championship.
However, on lap 64, Nigel Mansell's left-rear tyre exploded at 290 km/h (180 mph) on the Brabham Straight as he was lapping Philippe Alliot's Ligier. The car coasted to a stop, severely damaging the left-rear suspension, and Mansell was forced to retire. Following this incident and Rosberg's earlier tyre failure, the Williams team called Piquet into the pits for a precautionary tyre change, leaving him 15 seconds behind Alain Prost.
Piquet made a late charge, closing the gap to 4.2 seconds by the finish, but Alain Prost took the victory and secured his second World Championship. Prost had so little fuel remaining that he stopped only metres past the finish line. Stefan Johansson completed the podium in third place, a lap down. Martin Brundle ran out of fuel as he crossed the line in fourth place.
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