Japanese Cars on the Brink in the Chinese Market... "Motor Show Booths Also Sparse"

BMW Executive Sings Chinese Song at Motor Show

Foreign brands are struggling in the Chinese automobile market. In particular, Japanese brands, which have taken a conservative approach to rapid market changes, are increasingly being shunned on the ground due to the adverse effects of the recent contaminated water discharge issue.

The China Securities Journal recently reported that the Lexus booth was empty at the motor show held in Chengdu, Sichuan Province, China, since the 25th. The Securities Journal stated, "The staff at the Lexus booth were watching the bustling booth of BYD, which launched new models at the Chengdu Motor Show," adding, "This is a representative case showing the rise and fall of domestic independent brands and foreign brands."

[Image source= Xinhua News Agency]

Lexus, Toyota's premium brand, entered China in 2004 as an imported car and continued to grow sales for 17 years until 2021, but this trend was broken last year. In 2022, sales in China dropped 18.39% year-on-year to 180,006 units. In the first half of this year, the decline widened to 20.0%, with 70,505 units sold. Lexus, which had steadily raised prices, recently joined the industry's discount trend but is evaluated to have seen little effect.

The Securities Journal cited conservative investment as the cause of the Japanese brands' poor performance. It pointed out that the slow adaptation when the market shifted to new energy vehicles was a key factor. According to the China Passenger Car Association, the market share of Japanese cars in China fell from 24.1% in 2020 to 22.6% in 2021 and 19.9% last year. Based on cumulative data from January to July this year, it dropped further to 17.3%. As of July, the top three Japanese brands (Toyota, Honda, Nissan) recorded total car sales of 280,000 units in China, while BYD alone sold 262,000 units during the same period.

The Securities Journal stated, "Toyota recently acknowledged that it is lagging behind Chinese competitors in pure electric vehicle research and development and announced plans to establish a new R&D system in China," but pointed out, "In terms of new energy transition, Japanese automakers are not as firm as German ones, and their timing of decision-making is late."

Foreign brands such as Shoda, Mitsubishi, Subaru, and Ford did not participate in this motor show. The Securities Journal diagnosed that this is linked to the poor performance of foreign brands. In fact, in July this year, sales of Chinese independent brand vehicles reached 940,000 units, with a market share of 53.2%, up 5.8 percentage points from the previous year. Sales of joint venture brands with foreign capital amounted to 590,000 units, with a market share of 46.8%.

Some are seeking more proactive changes. In particular, they are engaging in China's "patriotic marketing" to win public sentiment. On the first day of the Chengdu Motor Show, Gao Xiang, a foreign executive of BMW, communicated in Chinese throughout the event and even sang the Chinese song "Chengdu," the newspaper reported. BMW simultaneously showcased five new energy vehicles at this motor show, including the pure electric models BMW iX1 and BMW i7 M70L. In April, BMW also dispatched two chartered planes carrying board members and heads of major business divisions to the Shanghai Motor Show.

This content was produced with the assistance of AI translation services.