In September, Honda reported sales of 62,586 vehicles in China, marking a significant year-on-year decline of 42.9%, representing eight consecutive months of decreasing sales. This comes amid growing penetration of electric vehicles (EVs) in the market, affecting all major Japanese automakers, including Toyota and Nissan, which also experienced downturns in their sales.
Key figures show Toyota’s sales in China dropped by 9.2% to 160,500 vehicles, while Nissan faced a 3.8% decline, selling 61,395 vehicles. Despite the continuous decline for six months for all three Japanese automakers, Nissan managed to soften the drop somewhat by increasing its promotional efforts.
Japanese car manufacturers are struggling in China against local companies that excel in the EV sector. With the rise of “electric is cheaper than gasoline” narratives driving a price war, the joint venture compact sedans priced between 70,000 to 100,000 RMB (approximately $10,000 to $12,700) are particularly affected.
Cui Dongshu, Secretary-General of the Passenger Car Association, noted that the challenges faced by Japanese automakers in China can’t simply be solved by halting the price wars. The rapid transition to pure-electric vehicles is shrinking the traditional fuel car market, while Japanese firms are lagging in the EV sector, losing some sales to domestic Chinese brands.
Recent reports indicate that luxury German brands are also feeling the pressure. BMW’s deliveries fell nearly 30% from July to September compared to the same period last year, totaling just below 148,000 units, while Mercedes-Benz saw a 13% decline, barely exceeding 170,000 units. This underperformance in China stands in contrast to these brands’ successes in other global markets.
Despite the overall downturn in the automotive sector, the EV segment is thriving due to government purchase incentives. In September alone, Chinese EV manufacturer BYD saw its sales of pure electric and hybrid vehicles surpass 410,000 units, reflecting a year-on-year increase of more than 45%.
