Sales of Japanese automakers are declining in China as the country continues to rapidly embrace electric vehicles, many of which are produced by domestic companies.
According to industry data, the first quarter of 2023 saw a 32% year-over-year decline in the overall number of Japanese auto brands sold in China. Japanese companies presently make up 18% of China’s new car sales, down from their 20% market share in 2022, 22% market share in 2021, and 24% market share in 2020.
Related: 59% NEVs in the World Were Sold in China in Q1, 2023
Some automakers are suffering particularly severe losses. Mitsubishi recently disclosed that it has halted Outlander production in China for three months and will incur a one-time loss of $78 million as a result of the country’s weak sales. Additionally, in the first quarter of 2023, Nissan reported a drop in Chinese sales of 45.8%, Honda a drop of 38.2%, and Mazda a drop of 66.5%, while Toyota and Lexus reported a 14.5% drop in sales.
Toshihiro Mibe, the chief executive of Honda, recently said in an interview that China’s automakers are “further ahead of us than we expected” in terms of software technology.
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In comparison to some of their Chinese rivals, Japanese automakers have often been hesitant to adopt electric and plug-in hybrid powertrains. The country is moving to electrified vehicles so swiftly that in 2022 the plug-in hybrid BYD Song dethroned the Nissan Sylphy, which had been China’s best-selling car for three years.
According to Bill Russo, the founder and chief executive 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 lambasted for their sluggish approach to EVs, with key automakers such as Toyota frequently lobbying against EVs not only in Japan but also in markets where it has a stronghold. However, as predicted, Japanese automakers are now feeling the effects of the EV revolution and are rapidly losing market share in China as well as Europe.
Source: Reuters
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com
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