Japanese Media Confused: Japanese Automakers Face Difficulties Despite a Market Selling 34.4 Million Units Annually
Japan's automotive media outlet, Best Car Web, published an article on April 29 stating that China's automotive market achieved a record high of 34.4 million units sold in 2025. The rapid growth of new energy vehicles (NEVs) is completely transforming the market structure. Yet, Japanese automakers are experiencing sharp declines in sales—why such a stark contrast?
China’s auto market sales reached a historic high of 34.4 million units (+9.4% year-on-year), maintaining its position as the world’s largest market for the 17th consecutive year. This figure alone is staggering, but even more significant is what lies beneath the numbers.
Today, China’s market dominance is no longer driven by traditional gasoline-powered vehicles, but by new energy vehicles.
NEV sales reached 16.49 million units (+28.2%), accounting for 47.9% of the total market. Domestic NEV penetration has reached 50.8%. In other words, China has entered an era where electric vehicles have become the norm.
This rapid expansion is fueled by government support policies, the development of charging infrastructure, and swift model updates and diversification. Beyond sedans and SUVs, there are now diverse options ranging from low-end to premium models, catering to a broad consumer base.
Moreover, NEVs also play a prominent role in exports. In 2025, China’s automobile exports surpassed 7 million units for the first time, reaching 70.98 million units (+21.1% year-on-year). Among these, NEVs accounted for approximately one-third of total exports, doubling compared to the previous year. The traditional export structure centered around gasoline-powered vehicles is gradually becoming obsolete.
In this trend, Chinese manufacturers are gaining strong momentum. Companies like BYD, Geely, and Wuling rank among the top in global EV sales, with Chinese firms occupying half of the top 20 positions worldwide.
On the other hand, the difficult reality facing Japanese automakers has become increasingly evident. Foreign automakers’ market share in China has generally declined, and Japanese companies are no exception.
Although Toyota saw a slight recovery in 2025, Nissan and Honda experienced significant drops. The underlying reasons may lie in differences in NEV development strategies and price competitiveness.
Naturally, the rapidly growing Chinese market is not without challenges.
The first major issue is trade friction. Tariffs imposed by the EU, the United States, and other countries are making China’s export environment increasingly difficult. As a response, Chinese manufacturers are accelerating their shift toward local production. Chinese companies are building factories in Brazil and other countries.
Additionally, Japanese automakers face intensifying price competition, leading to declining profit margins due to overcapacity and sluggish demand growth. The number of companies suffering from deteriorating cash flow and large deficits is increasing, signaling that industry restructuring and consolidation will continue in the coming years.
Japanese firms also face technological challenges. In China, L2-level driver assistance systems have already achieved a penetration rate of 64%, and L3-level commercialization is advancing. However, improvements are still needed in mass production systems regarding safety, quality control, and data compliance. It’s no longer just about being “advanced”—reliability will become the next critical axis of competition.
From this perspective, we can see that China’s automotive market has evolved from simple scale expansion to a battle of quality. Chinese NEVs lead globally, while Japanese automakers confront structural challenges.
For Japanese consumers, this development is far from irrelevant. The performance and price competitiveness of future Chinese-made electric vehicles entering the Japanese market could significantly influence consumers' choices between domestic and imported cars. When forecasting the future direction of automobiles, trends in the Chinese market cannot be ignored.
Original source: toutiao.com/article/1863814226421067/
Disclaimer: The views expressed in this article are those of the author(s).