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Japanese manufacturers sink in China due to the momentum of local electric cars

For years, the Chinese market has been dominated by Volkswagen and the big three Japanese automakers. (Honda, Nissan and Toyota). However, the tables are changing with unusual speed, as the rise of local groups is causing foreign brands to face an uncertain future in the Asian country.

During the first quarter of 2023, BYD dethroned Volkswagen as China’s best-selling brand; In addition, Japanese firms experienced a notable drop: Mazda’s registrations fell by 66.5%, Nissan’s by 45.8% and Honda’s by 38.2%. Toyota and its subsidiary Lexus resisted somewhat better and their sales fell “only” 14.5%.

Overall, Japanese brands suffered a 32% year-on-year drop, achieving a market share of 18%, a figure that is somewhat poor compared to 20% in 2022, 22% in 2021 and 24% in 2020. This situation is largely due to its slow commitment to battery-powered electric carsa type of vehicle that is increasingly in demand.

Last April, the BEV (Battery Electric Vehicle) accounted for 24% of new car sales in China, to which we should add an additional 10% of PHEVs (Plug-in Hybrid Electric Vehicles). In other words, plug-in vehicles already have a 34% share in this marketwhich plays against the Japanese.

toyota bz3

Chinese manufacturers begin to gain weight

Nor can we lose sight of its lower competitiveness at the price level. “Japan is the biggest loser in the price war so far”explains the founder and CEO of Automobility, Bill Russo. “As electrics become more affordable, they become more attractive to buyers. […]. This is the last nail in the coffin.”

Despite the fact that Honda, Nissan and Toyota have recently announced profound changes in their respective electrification strategies With the aim of expediting the launch of new models, it is not clear that this will be enough to stop the bleeding in China or even to stop the expansion of BYD and its compatriots to regions such as the United States or Europe.

Japan has an ace up its sleeve as a last resort: Your early commitment to solid electrolyte batteries, a disruptive technology in which (apparently) it is more advanced than China. This could be his lifeline, although we must not lose sight of the fact that his arrival on the market will not take place until the second half of the decade.

Source | Automobile Prop

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