Japanese Automakers Face Stay-or-Go Decision in China

livemint.com:

TOKYO—Struggling to compete with homegrown electric-vehicle makers in China, Japanese automakers are looking at whether to cut their losses and focus resources on warding off Chinese rivals in other stronghold markets. During the first half of their fiscal year—the period from April to September—Honda, Nissan, Mazda, Mitsubishi Motors and Subaru reported year-over-year declines in auto sales in China. Toyota’s China sales volumes were little changed from a year earlier but the automaker flagged the market as one of particular concern.

Among the worst cases, Mitsubishi sales in China fell 60%, while Subaru and Nissan were down 37% and 20% respectively. Foreign automakers, including Japanese brands, are increasingly being edged out of China by local rivals including EV leader BYD. As battery-powered vehicles take a bigger chunk of the market, Chinese companies collectively are for the first time selling more passenger cars than foreign brands.

This year BYD overtook Volkswagen for the first time to become the best-selling car brand in China. Tesla was the only American brand on the list of top-10 vehicle sellers in China in the first half of this year, as Ford and others have reduced investments there. Still, VW and General Motors remain committed to China with plans for EV rollouts.

Mitsubishi said last month it would withdraw from its joint operation with Guangzhou Automobile Group, ending production in China. The announcement came after Mitsubishi sold only 31,826 vehicles in the country in the previous year, down from 123,581 units in 2019 before the pandemic. “The shift to electric vehicles is accelerating faster than expected, and consumers’ brand and segment choices have changed significantly," said Kentaro