CYJ Key Points
- China exported 7.1 million vehicles in 2025, against 4.17 million for Japan, and is expected to reach 10 million in 2026.
- Japan-made cars are losing price competitiveness. China’s supply chain, development speed and software lead are structural, not cyclical.
- Chinese makers now compete in EVs, hybrids, range-extenders and even petrol cars, and are taking share in Japan’s Southeast Asian strongholds.
- Japanese makers’ answer – building and exporting from Chinese joint ventures – carries growing political risk. We are cautious on the sector: in the best case, Japanese makers’ share is gradually eroded.
日本語要約
- 2025年の中国の自動車輸出は710万台と日本（417万台）を大きく上回り、2026年には約1,000万台に達する見通し。中国は2023年に日本を抜いて世界最大の自動車輸出国となった。
- 中国の強固なサプライチェーン、開発スピード（新型EVの開発期間は約18カ月）、ソフトウェア・自動運転分野での大きなリードにより、日本で生産した車は世界的に価格競争力を失いつつある。トヨタ、ホンダ、日産もこの点を認識している。日本は人材が不足し、製品の更新スピードも遅い。
- かつてフォルクスワーゲンやトヨタなど既存メーカーに軽視されたレンジエクステンダー（EREV）は、電池技術の進歩により、低コスト・高性能・シンプルな構造の現実的な選択肢となった。中国車はEV、ハイブリッド、EREV、さらにはガソリン車まで全方位で日本車に追いつき、多くの分野で追い越している。
- タイでの日本車シェアは2010年代の約9割から69.8％（2025年1～10月）に低下し、中国ブランドは2割を超えた。
- CYJの見解：日本の自動車業界の先行きには悲観的である。中国の合弁工場で生産・輸出する戦略も、政治的緊張の高まりにより根本的なリスクを抱え、輸出が途絶えれば大きな経営圧力に直面する。日本メーカーは守勢が続き、最良のシナリオでもシェアは徐々に侵食されるとみる。
China is now the world’s largest car exporter
China overtook Japan as the largest car exporter in 2023 (4.91 million versus 4.42 million vehicles). By 2025 it exported 7.1 million (+21.1%), while Japan exported 4.17 million (−1%). Passenger car exports in January–August 2026 already exceeded the whole of 2025, and the China Association of Automobile Manufacturers expects about 10 million in 2026. In 2025 Chinese automakers also outsold Japanese ones globally for the first time, about 27 million versus 25 million vehicles. Chery exported 1.3 million vehicles and BYD about 1.04 million, both building plants abroad.
Japan-made cars are losing on price
Toyota, Honda and Nissan now recognise that cars built in Japan are not price-competitive globally. The reason is China’s supply chain: batteries, motors, electronics and castings are made at scale close to assembly plants. According to AlixPartners, Chinese makers develop new products about twice as fast, invest 40–50% less and hold a roughly 30% cost advantage. A Chinese EV takes about 18 months to develop; a typical Japanese programme takes around four years.
Toyota CEO Koji Sato told 484 suppliers: “Unless things change, we will not survive.” In China, Toyota and Nissan have handed development to their joint-venture partners and use mostly Chinese parts: Toyota’s bZ3X sells for about ¥2.2 million and Nissan’s N7 from about ¥2.5 million.
Software and intelligent driving: China far ahead
In 2026 to date, 70.5% of new passenger cars in China carry L2 assisted driving and 34.2% offer navigation-assisted driving, against about 35% L2 penetration in Europe. Chinese makers update software over the air in months. Japanese makers lack software talent and still renew products on multi-year cycles; Nissan’s N7 relies on Chinese start-up Momenta for its driving software.
Range-extenders: from dismissed to mainstream
When Chinese makers launched range-extended EVs (EREVs), legacy makers such as Volkswagen and Toyota looked down on them. As batteries have become cheaper and better, the EREV has become a very practical choice: low cost, strong performance and a simple structure, with a small engine acting only as a generator. Volkswagen and Nissan have since entered the segment, and Toyota reportedly plans to build EREVs in China from 2027. China is now catching up – and in many areas overtaking – Japan across EVs, hybrids, range-extenders and even petrol cars. New energy vehicles were nearly 60% of China’s market in 2025, against under 3% in Japan.
Japan’s strongholds are being eroded
| Market | Japanese brands’ share before | Latest | Chinese brands |
|---|---|---|---|
| Thailand | High-80s to 90% (2010s) | 69.8% (Jan–Oct 2025) | Over 20% |
| Indonesia | Over 90% (2012) | 82.9% (Jan–Oct 2025) | 10.4% (Q1 2025) |
Tariffs in Europe, the US, Mexico and Brazil do not stop Chinese exports; they redirect them towards Southeast Asia, the Middle East, Latin America and Australia – exactly where Japanese makers earn much of their profit – and push Chinese makers to build plants locally.
Earnings pressure
Japanese makers face this with weakened earnings. Toyota guides FY3/2027 operating profit down 20% to ¥3.0tn; Honda lost ¥423.9bn in FY3/2026 and Nissan ¥533.1bn. In our base case, Chinese competition in export markets could cost Toyota about ¥380bn a year in lost volume and lower prices, about 13% of guided operating profit (CYJ estimate). Honda and Nissan are far more exposed: for Nissan, a 1% price cut across 3 million vehicles would cost about ¥90bn, more than its entire FY3/2026 operating profit of ¥58bn.
CYJ view: cautious on Japan’s auto industry
We are pessimistic on the outlook for Japan’s auto industry. Japanese makers are increasingly using Chinese joint ventures to build and export cars, but as political tension rises this route carries fundamental risk. If exports were disrupted, Japanese makers would face heavy operating pressure: higher costs, gaps in their EV line-ups and stranded investment in China. We expect Japanese carmakers to remain on the defensive. In the best case, we will see their market share gradually eroded.
Within the sector, Toyota is the most resilient thanks to its hybrid lead, scale and profit per vehicle. We are most cautious on Honda’s four-wheel business and on Nissan.
Sources: CAAM, JAMA, Gasgoo, CnEVPost, AP, Caixin, People’s Daily, WardsAuto/AlixPartners, Business Insider Japan, 36Kr, Nikkei via Cars24, The Japan News, company results. This article is for information only and is not investment advice.
