Title: Sales of Japanese Automakers Decline in Chinese Market, Toyota Focuses on New Energy Technologies
Date: July 7, 2023
Toyota Motor, Honda China, and Nissan have reported a decline in sales in the Chinese market for the month of June. Toyota’s new car sales decreased by 12.8% compared to the previous year, marking its first negative year-on-year growth in the past three months. Honda experienced a year-on-year decrease of 19.8% in terminal vehicle sales for June, while Nissan’s sales volume dropped by 28.0%.
Toyota attributed the decline in sales to the high base set by the introduction of China’s auto purchase tax relief measures in June last year, which had led to rapid growth in car sales. Similarly, Honda and Nissan faced the impact of the high base, resulting in decreased sales.
In the first half of the year, all three major Japanese automakers witnessed a downward trend in their new car sales in China. Toyota sold 879,400 new cars, a 2.8% decrease compared to the previous year. Honda sold 529,691 new cars, experiencing a 22% year-on-year decrease, while Nissan sold 358,509 new cars, marking a 24.4% decline.
Bai Yiyang, vice president of the research department of China Merchants Bank International, highlighted the large base from the previous year as a significant factor contributing to the year-on-year sales decline for the Japanese car companies. Furthermore, Japanese brands have been greatly impacted by the rising trend of independent and new energy vehicles. Honda’s launch of the new-generation Accord affected its sales rhythm, with customers still adapting to the hybrid system. Toyota, on the other hand, performed relatively well due to its active competition in the Chinese market and the success of its “smart electric hybrid dual engine” marketing campaign. Nissan faced challenges with the impact of the X-Trail switch, as well as the less than ideal performance of Ariya in terms of pure electric capabilities.
In response to the challenging situation in the Chinese market, Toyota’s new president, Sato Hengji, acknowledged the slow development of pure electric vehicles and expressed plans to establish a new research and development system in China.
Toyota is aiming to overcome its lag in the new energy field by focusing on technologies such as solid-state batteries and hydrogen energy. The company recently announced a breakthrough in solid-state battery technology, which extends the cruising range up to 1,200 kilometers after just 10 minutes of charging. Toyota expects to introduce solid-state batteries by 2025, enabling longer battery life and charging times comparable to refueling conventional vehicles.
Honda Motor, on the other hand, plans to adapt to the changing Chinese market by adjusting its organizational structure. It merged its wholly-owned subsidiary, Honda Giken Technology, and Honda Production Technology in China to enhance strategic operations in the production field.
Nissan Motor has expressed its intention to differentiate its products in the face of the electrification wave in China. Instead of directly competing with Chinese electric car brands, Nissan plans to define its cars through software and announced its plans to launch seven electric drive models in the Chinese market before 2026. The company aims for electric drive models to represent 80% of its Chinese market by 2030.
Overall, Japanese automakers are strategizing and investing in new energy technologies and organizational adjustments to regain traction in the Chinese market amidst declining sales.