In an unnoticed corner of China’s auto market, Japanese cars are almost finished.

This article may contain an automated translation. The original source is linked for verification.

In an unnoticed corner of China’s auto market, Japanese cars are almost finished.

Giant Tide WAVE

2026.11.12 08:43

· From Beijing

Full text 3329 words

Text | Juchao WAVE, author｜蟪蛄, editor｜Yang Xuran

In October, Nissan launched a plug-in hybrid pickup truck called Frontier Pro in Mexico. Its design, development and production were all completed by Zhengzhou Nissan. This is Nissan's first model developed and manufactured in China and exported to the world. Mexico is its first stop outside China.

That same fall, Nissan released another set of numbers. In September, it sold 23,658 vehicles in China, a year-on-year decrease of 61.6%.

Honda's changes are more intuitive. In 2020, it sold approximately 1.627 million vehicles in China, and in 2025, there will be only 645,000 vehicles left. In September this year, the media reported that Honda’s terminal sales in China were 25,564 units, a year-on-year decrease of 53.1%.

Such a number is not an end or a low point. In October, the share of Japanese brands in China’s passenger car retail sales dropped to 10.2%. In October 2020, this number was still 23.9%.

In the past six years, the Chinese market has gone from having one Japanese model in every four new cars to only one in every ten.

Many people's impressions of Japanese cars are still from when the Accord and Sylphy were popular on the streets - these cars are not uncommon on the road today. But the number of cars on the road is only one aspect. How many new cars can be sold is obviously more important to car companies.

The Chinese market, which has been growing continuously in the past, can accommodate the growth of car companies in both countries. Nowadays, Japanese cars can basically be declared completely defeated in the competition in the Chinese market, and the remaining 10% of their market share will probably continue to be lost.

callback

In the first 10 months of this year, China's passenger car retail sales reached 14.978 million units, a year-on-year decrease of 22.3%. This number is similar to the 14.92 million vehicles in the same period in 2020. The downturn in the auto market six years ago was due to the impact of the epidemic. This time, the industry has once again encountered the boundary of demand after several years of expansion.

Buying a car can easily be mistaken for some kind of high-frequency consumption—consumers go from not having a car to owning a car, from owning a car to exchanging a car, and from exchanging a car to a luxury car. In the past many years, after consumers already owned a car, whether they wanted to spend money to replace it with a new one often did not depend on whether the old car could still be driven, but on everyone's firm consumer confidence.

Statistics from the Ministry of Public Security show that by the end of 2025, the number of cars in the country will reach 366 million. Big cities have experienced a long period of popularization of cars, and there is still room for first-time buyers in counties and townships. However, the speed at which these demands are released is completely different from when a large number of families bought cars for the first time.

There are also some specific reasons this year why auto retail sales are so dismal. In 2026, the purchase tax on new energy vehicles will be reduced from exemption within the limit to halved. As a result, some orders at the end of last year were cashed in advance. This year we are facing a comparison base that has been raised previously. Corresponding data is that national passenger car retail sales increased by 1.5% month-on-month in October, but decreased by 27.1% year-on-year.

Data from the National Bureau of Statistics show that total retail sales of consumer goods increased by 1.1% in the first three quarters, and increased by 2.8% after excluding automobiles. Automobile retail sales of units above designated size decreased by 14.9%.

When residents' expectations for future income are not stable enough, a car purchase expense of more than 100,000 yuan can easily be pushed back. The old car can still be driven, so you can keep the cash flow in your hands and just wait and see.

Car purchasing decisions are also influenced by public opinion. Store offers are coming down one after another, and news of promotions and model changes can be seen on social platforms at any time. Consumers will naturally wait for the next offer. The China Passenger Car Association also mentioned in its weekly report at the end of October that negative industry public opinion may increase the wait-and-see attitude of buyers of new energy vehicles.

For families, more and more reasons are needed to change cars, but car companies need revenue and profit growth every year. People who buy cars can wait and wait, but 4S stores have to pay monthly rent and interest.

A correction in total consumption is inevitable, which is cruel to all institutions in the entire chain.

fall

Japanese cars used to be the safest choice among family cars worth more than 100,000 yuan: they are fuel-efficient, have fewer breakdowns, and are easy to sell second-hand. For a family car that will be driven for a long time, these are very important choices when buying a car. At that time, with the cost-effectiveness of Corolla and Sylphy, there was basically no need to do too many "choice questions".

In January this year, the new BYD Qin PLUS DM-i launched with a guide price starting from 79,800 yuan. Like the Corolla and Sylphy, it is a compact family sedan that can be used for daily commuting and refueling for long distances.

More importantly, in the past, fuel consumption per 100 kilometers was used to compare cars. In the new energy era, this comparison has obviously lost its meaning. Now everyone is comparing comprehensive factors such as battery life, battery, software upgrades, and assisted driving.

In October, about 530,000 conventional fuel passenger cars were sold, a year-on-year decrease of 45%. New energy vehicles sold 1.109 million units, a year-on-year decrease of 13.7%, but their proportion in domestic retail sales rose to 67.5%. As the number of car buyers decreases, consumers of fuel vehicles disappear even more completely.

There are still some buyers of Japanese gasoline hybrids. People who have difficulty charging will value low fuel consumption and convenience of refueling. Retail sales of ordinary hybrid vehicles also increased by 28% year-on-year in October. But this can no longer support the large share that once dominated the mainstream price range.

The fuel consumption advantage can save a small number of orders, but what configurations domestic new energy vehicles can provide at the same price and how much it costs to drive them on weekdays are already the calculations that most families will make.

Japanese cars used to have the advantage of preserving their value. But once manufacturers repeatedly cut prices, the transaction prices of new cars will also be transmitted to the second-hand car market. Buyers will use today's new car prices as a reference, putting pressure on the price that old car owners can sell for. Lowering prices for the sake of current sales may eventually weaken the amount of money consumers were willing to pay for Japanese cars in the past.

The GAC Toyota Platinum 3X, which will be launched in 2025, adopts a development method led by a Chinese regional chief engineer and cooperating with GAC. Materials disclosed by Toyota show that the cumulative sales of this car in 2025 will exceed 70,000 units.

In the past, international car companies brought developed models to China, and then reduced the configuration and lengthened the size, so that joint ventures in China could mass-produce and sell them, but now the situation has completely changed.

Battery, electric drive, and cockpit suppliers, together with Chinese and foreign car companies, are iterating simultaneously in the Chinese market. Once new configurations become mainstream, both Chinese and foreign car companies must keep up quickly, otherwise they will be easily abandoned by consumers.

There is an exception to this process: the models that are coordinated in China are sold outside China. In the huge overseas markets, there is still a stage for competition between Chinese and Japanese car companies.

Go to sea

In October, FAW, Toyota and GAC signed a new cooperation framework. GAC plans to acquire 50% of FAW Toyota's equity held by FAW through the issuance of shares. FAW Toyota will exist as an independent operating entity, and the two joint ventures plan to further collaborate in research and development, procurement, production and sales.

Toyota's actions come with quite real pressure: China's auto market has tied electrification, low-cost supply chains and local development together. It is almost impossible to rely on the headquarters to launch a global car every few years to cover the Chinese market.

Today's joint ventures need to select suppliers in China, form R&D teams, and give these teams sufficient decision-making power. The product capabilities and supply chain systems formed in China cannot only serve the Chinese market.

As for Chinese car companies, they are looking for exports for this round of major adjustments, and overseas is the core key. According to statistics from the China Passenger Car Association, passenger cars exported from China reached 928,000 units in October, a year-on-year increase of 68.5%, including exports of complete vehicles and components. This figure is equivalent to 35% of the manufacturer's wholesale sales that month.

Now that it is becoming more and more difficult to sell cars in China, overseas business has begun to be directly related to the utilization rate of production capacity and how much profit car companies can retain.

In Thailand, which has the largest number of Chinese car companies, we can already clearly see the shape of the next round of competition between Chinese and Japanese car companies.

In 2024, BYD will put into operation a factory with an annual production capacity of 150,000 vehicles in Rayong, and build the production line into a market where Japanese manufacturers have been operating for many years. Toyota's pickup trucks and hybrid vehicles have a long-term accumulated user, dealer and maintenance network. After Chinese car companies opened their factories locally, the competition also extended from the price in the showroom to who can build the car well, sell it for a long time, and afford repairs.

The Latin American market, represented by Brazil, has a different approach. Toyota sells the Corolla Cross hybrid vehicle locally that supports ethanol fuel, while BYD produces small pure electric vehicles in Camassari and demonstrated the plug-in hybrid Song Pro that is adapted to local ethanol fuel. When Chinese brands bring plug-in hybrids out, they must learn to use fuel that is familiar to local people.

Going deep into the hinterlands of various overseas countries to build factories will directly change the time scale of competition between Chinese and Japanese car companies. A production line put into production overseas will rely on a steady stream of orders over the next many years to amortize the cost, and a long-term symbiotic relationship will be formed between the car company and the repairman. The situation is similar for the parts system.

When Chinese companies are making these arrangements, they are facing places where Japanese brands have been operating for the longest time and have the most intensive symbiotic relationships. The goal is to weaken or even break these symbiotic relationships.

Japanese car companies are sticking to their existing channels and beginning to use China's R&D and manufacturing capabilities to make their next batch of global models, especially in the field of global new energy vehicles. This new change is already quite clear.

After Chinese and Japanese car companies decide the outcome in the Chinese market, Chinese car companies will soon face this more difficult opponent in the global market. The outcome may not be as clear as in the Chinese market.

write at the end

In the past, Japanese brands came to China and shared a market that started almost from scratch and expanded rapidly, and made a lot of money in the world's largest incremental automobile market.

Today, sales here have begun to shrink, but there are more and more Chinese companies that can build cars. For Japanese manufacturers, it is a rational choice to learn various new technologies and business methods in China and then use them elsewhere.

But even if it goes to other markets, it will still face global competition from Chinese automobile companies.

The competition between Chinese and Japanese car companies in the Chinese market has already decided the winner. The next few years will see the competition in Bangkok, São Paulo and Mexico City as the second phase. In those places, Japanese car companies are far from being almost ruined in the corner of the Chinese market.

Respect for the original work, if you are qualified, you should be appreciated.

According to the real-name requirement of the Cybersecurity Law, please bind your mobile phone number before posting a comment.

Express