Japanese automobiles are losing ground in the Chinese market. According to relevant data, Japanese car market share fell to 20.5% from January to October this year, the third consecutive year of decline.
In November, all three major Japanese brands, most notably Honda and Nissan, experienced varied degrees of drop. There were reductions of 40% and more than 50% on an annual basis, respectively. Honda’s drop in November was the largest since the pandemic started in 2020. Nissan’s sales have declined in every month this year except February and July. The two Japanese titans were on the verge of defeat.
Both brands made reference to the pandemic’s effects. According to Shohei Yamazaki, senior vice president of Nissan Motor Co., “the persistent shortage of chips and components and the lockdown of key cities owing to the COVID-19 epidemic have had a lasting influence on the company’s sales.”
The epidemic caused the major Honda joint venture facility in Wuhan, Hubei province, to suspend operations for two days at the end of November. Honda and Nissan’s overall sales for this year aren’t any better.
Honda’s cumulative sales in China from January to November were 1.234,600 units, a decrease of 11.4% from 1.392,900 units during the same time last year.
Honda’s two joint ventures in China, Guangqi Honda and Dongfeng Honda, sold 650,300 and 584,200 vehicles respectively, in terms of subsidiaries. Guangqi Honda terminal cumulative sales for the same period last year were 687,300 units, while Dongfeng Honda terminal cumulative sales were 705,600 units. Sales at Guangqi Honda decreased by 37,000 while those at Dongfeng Honda decreased by 121,400.
Nissan sold 974,700 vehicles in China from January to November, a 20.2% decrease from the 1.247,700 sold during the same time last year.
This division is divided into two business segments: passenger automobiles (containing the Nissan, Kai Chen, and Infiniti brands) and light commercial vehicles (including Dongfeng Motor Co. ‘s sales from January to September and Zhengzhou Nissan).
Nissan sold 139,300 light commercial vehicles in the first 11 months of the year, decline 26.3 percent from the 215,700 unites during the same period last year. One of them, Dongfeng Motor, has changed due to the shift of control and is now a holding subsidiary of Dongfeng Company. Since October 2022, its sales data, which makes up the majority of Nissan’s light commercial vehicle sales in China, will not be reported in Nissan’s China sales report.
The Syly and XR-V, which are mainstays for Nissan and Dongfeng Honda, are just two instances of Japanese vehicle companies that have witnessed sales decline in China in recent years.
Japanese auto sales decreased year over year, primarily as a result of the growth of domestic autos, particularly new energy vehicles in recent years. The lack of new energy vehicles in the Japanese brand became the first to be impacted. In fact, the market for fuel cars as a whole is contracting, not just for Japanese cars. Honda and Nissan each introduced their own all-electric vehicles this year, but neither sales nor reviews have been great.
Japanese automakers, led by Toyota, are counting on gas-electric hybrids and hydrogen-powered vehicles as part of their new energy strategy. Due to its high price and challenging popularization, the hydrogen vehicle is still a niche product on the market. Oil-electric hybrids, however, are not a novel form of energy on the Chinese market.
Moreover, the pricing strategy used by Japanese automakers is rigid. “The price of Japanese B-class cars used to be 180,000 to 250,000 Yuan, but the price is now comparable to that of domestic C-class cars,” some industry insiders claimed.
According to Zhang Junyi, managing partner of the consulting firm Oliver Wyman, the business strategy of Japanese automakers in China has been profit-oriented rather than price-competitive. However, the industry has evolved too quickly recently, particularly with the emergence of businesses like BYD, which has led to the passivity of Japanese automobiles.
A number of international businesses have recently left the Chinese market, and joint venture products, such as Japanese cars, are also losing their appeal. The Chinese auto industry is not as thriving as it once was, and it is debatable if joint-venture brands are still consumers’ top choices.
Contrarily, several customers said that the Japanese oil-electric hybrid was inferior to domestic new-energy versions in terms of interior quality, economy, and oil conservation.