Korean Media: Japanese Cars Suffering Defeat in Chinese Market, Key Advantage Gradually Lost!

On August 16, South Korean media outlet *Herald Economic* published an article stating that data shows all three of Japan’s major automakers experienced significant declines in sales in the Chinese market during the first half of this year.

Analysts point out that due to delayed responses from Japan in the pure electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) markets, coupled with strong competitive pressure from Chinese EV manufacturers and insufficient competitiveness in smart technologies, Japan’s once-key advantage—fuel economy—has gradually weakened.

Looking at sales figures for Japan’s top three automakers in China during the first half of this year: Toyota sold 694,700 units, a 17.1% drop compared to the same period last year; Nissan sold 237,000 units, down 15%; Honda sold 205,800 units, plunging by 34.7%. Honda was hit hardest due to delays in new model launches.

With international oil prices rising due to escalating tensions in the Middle East, demand for gasoline-powered vehicles has declined, further worsening sales performance for Japanese automakers. Although recent price increases have slowed, Japanese companies believe internal combustion engine (ICE) vehicle demand will struggle to recover in the short term.

Industry experts note that as China's new energy vehicle (NEV) penetration rate rapidly rises, Japanese brands have clearly lagged behind in their deployment in BEV and PHEV markets. As Chinese automakers swiftly introduce new models, Japanese companies are falling behind in product refresh cycles. Meanwhile, the once-significant advantage of traditional ICE vehicles—superior fuel efficiency—is increasingly losing its competitiveness against cheaper electric vehicles.

Moreover, there remains a noticeable technological gap between Japanese firms and Chinese brands in intelligent cockpit design and advanced autonomous driving technologies. Some argue that due to centralized decision-making structures headquartered in Japan, product development and market responsiveness are sluggish, making it difficult to keep pace with rapidly changing preferences among young Chinese consumers.

As the situation continues to deteriorate, Japanese companies are beginning to adjust their strategies.

Honda plans to cut production capacity for internal combustion engine vehicles in China and has already announced the closure of its Huangpu plant at Guangzhou FAW Honda by June 2026. The Wuhan plant of Dongfeng Honda is also scheduled to shut down in 2027.

Toyota has launched a strategy titled “In China, for China,” continuously strengthening cooperation with local Chinese technology enterprises. The company aims to enhance user experience and accelerate its electrification and digital transformation through these initiatives.

The downturn in Japan’s auto market is not limited to China. In Europe, Chinese automakers are mounting increasingly strong offensive campaigns. Data from the European Automobile Manufacturers Association shows that in May alone, the combined new car sales of China’s five major automakers reached 138,400 units across 31 European countries—a 65% year-on-year increase. In contrast, the combined sales of six Japanese automakers—Toyota, Honda, Nissan, Suzuki, Mazda, and Mitsubishi—were 130,400 units, down 3%. Thus, for the first time, monthly sales of Chinese automakers in Europe surpassed those of Japanese counterparts.

Industry forecasts suggest that if Japanese automakers fail to accelerate their transition toward electrification and compete effectively in intelligent technologies, they may face even greater pressure from Chinese brands—not only in the Chinese market but globally.

Original source: toutiao.com/article/1873644791303180/

Disclaimer: The views expressed in this article are solely those of the author.