Japanese car manufacturers reported lower sales in China in May compared to the same period last year. Faced with the competitive pricing of Chinese domestic electric vehicles (EVs), Japanese automakers are being forced to reevaluate their strategies in the Chinese market.
According to reports from NHK, the leading Japanese car manufacturers showed a decline in sales figures in China for May. Toyota sold 140,377 vehicles, down 13.6% year-on-year, while Honda sold 66,202 vehicles, a 34.6% decrease.
In addition, Nissan saw a 2.8% decrease, Mazda dropped by 20%, and SUBARU plummeted by 76.4%.
At the same time, Honda, Nissan, Mazda, and Toyota’s subsidiary, Daihatsu Motor, all experienced lower global sales compared to the same period last year.
Four companies including Toyota, Suzuki, SUBARU, and Mitsubishi Motors saw increased sales in regions such as the United States and Europe, leading to higher revenue compared to the previous year.
The rapid popularity of electric vehicles in China has prompted domestic companies to engage in price wars, while Japanese automakers struggle to compete. Japanese car manufacturers are now taking steps to reassess their strategies, including scaling back or withdrawing production.
According to Nikkei Asia, last Friday (June 21), Nissan closed its plant in Changzhou. This marked the first closure of a Nissan plant in China, with the Changzhou plant being the smallest and newest out of Nissan’s eight facilities in China, starting production in November 2020.
When the Changzhou plant opened, China had surpassed the United States as Nissan’s largest market for car sales. Nissan was once considered more successful in the Chinese market compared to Toyota and Honda. By 2018, Nissan had produced more cars in China than Toyota and Honda for 10 consecutive years.
Chinese EV manufacturer BYD continues to expand its market share both domestically and internationally by offering competitively priced vehicles. In February this year, BYD significantly reduced the price of its flagship model, Qin PLUS Honor Edition, to 79,800 yuan (about $11,000), representing a 20,000 yuan decrease.
One of the competitors to the Qin PLUS is Nissan’s popular sedan, the Sylphy. The Sylphy is priced at around 100,000 yuan. In an effort to boost declining sales, Nissan announced price reductions and promotions in April, lowering the starting price of the Sylphy to 69,800 yuan.
Last year, Nissan’s car sales in China dropped by 16% to 790,000 vehicles, marking the fifth consecutive year of decline compared to the previous year. Nissan is currently in negotiations with its joint venture partners in China to reduce production capacity by 30%. Nissan’s CEO, Makoto Uchida, stated in March of this year that the price decline in the Chinese market came two years earlier than anticipated.