Japanese automakers’ sales in China are declining as the country continues to embrace electric vehicles, many of which are manufactured domestically.
According to industry data, the overall number of Japanese auto brands sold in China fell 32% year on year in the first quarter of 2023.
Japanese automakers
Japanese automakers currently account for 18% of China’s new car sales, a decrease from their 20% market share in 2022, 22% market share in 2021, and 24% market share in 2020.
Some automakers have suffered especially severe losses. Mitsubishi recently announced that it will halt Outlander production in China for three months and will incur a one-time loss of $78 million due to the country’s poor sales.
Furthermore, Nissan reported a 45.8% drop in Chinese sales in the first quarter of 2023, Honda a 38.2% drop, and Mazda a 66.5% drop, while Toyota and Lexus reported a 14.5% drop in sales.
Honda CEO Toshihiro Mibe recently stated in an interview that China’s automakers are “further ahead of us than we expected” in terms of software technology.
When compared to some of their Chinese competitors, Japanese automakers have been slow to adopt electric and plug-in hybrid powertrains.
The country is moving so quickly to electrified vehicles that the plug-in hybrid BYD Song will dethrone the Nissan Sylphy, which had been China’s best-selling car for three years, in 2022.
According to Bill Russo, the company’s founder and CEO of Automobility:
“Japan is the biggest loser of the price war so far. As EVs get more affordable, they become more attractive to the core buyers who have been resisting so far, the buyers of foreign brands. So, you can see the writing is on the wall.”
Japanese automakers have long been chastised for their slow approach to EVs, with key automakers like Toyota frequently lobbying against EVs not only in Japan but also in markets where it has a stronghold.
However, as predicted, Japanese automakers are beginning to feel the effects of the EV revolution and are rapidly losing market share in both China and Europe.
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