Gasgoo Munich- Japan's auto market has long been dominated by domestic brands like Toyota, Honda, and Suzuki, which hold a combined market share exceeding 90%. Industry insiders often dub it the "world's most closed open market."
The struggles of foreign brands are evident in the exits of Opel in 2006, Hyundai in 2009, and Ford in 2016—proof of how difficult it is for outsiders to gain a foothold.
Yet this landscape is being rapidly rewritten by the wave of electrification.
Data from the Japan Automobile Importers Association (JAIA) shows that imported vehicle sales (excluding Japanese automakers) rose 3% in fiscal 2025 to 238,081 units, marking the first increase in seven years. Imported pure electric vehicle (EV) sales jumped 34% to 33,299 units, driving the overall gain. Imported EV sales in Japan have now grown for seven consecutive years, accounting for 14% of total import sales—up 3 percentage points from the previous year.
Notably, following BYD's lead, Chery Automobile was reported on May 11 to have formed a joint venture with Japanese retailer Autobacs Seven, planning to sell EVs in Japan starting in 2027.
In response, Chery stated that it is merely one of several investors in the EMT project and does not participate in its management.
Meanwhile, Gasgoo observed that Reuters reported a statement from partner AUTOBACS SEVEN, which clarified that no decisions have been made yet and the matter is still at the stage of "exploring possibilities."
There is no doubt, however, that Chinese new energy vehicle makers are collectively knocking on the doors of this former "strategic high ground" with unprecedented momentum.
Structural Shift: Import EVs Redraw Japan's Market Map
Japan's import market is undergoing a structural reshaping driven by electrification.
On one side, traditional luxury brands are under pressure: Mercedes-Benz sales in Japan slipped 6% to 49,654 units, holding the top spot. BMW ranked second, with sales dropping 7% to 34,044 units.
On the other, Chinese brands are staging a breakout. BYD doubled its sales in Japan in fiscal 2025 to 4,536 units. Tesla, while not disclosing specific figures, saw its "other" category sales reach 13,700 units, also signaling expansion.
Image Source: BYD
Notably, the penetration rate of new energy vehicles in Japan remains extremely low.
As of September 2025, the penetration rate of new energy vehicles in Japan stood at just 2.8%, with pure electrics accounting for only 1.7%. Against this backdrop, imported EVs are effectively taking on the role of "educating the market."
According to the JAIA chairman at a July 2025 press conference, the lineup of imported EVs has expanded from 10 brands and 20 models in 2020 to 22 brands and 173 models by the end of June 2025—a roughly ninefold increase in model count over four years.
At the same time, the Japanese government's increased subsidies for EVs are injecting momentum into consumption. Starting January 1, 2026, the maximum EV subsidy will rise from 900,000 yen to 1.3 million yen.
An even more symbolic signal comes from Honda.
The Japanese automaker announced it will sell 3,000 units of the Insight pure electric SUV produced in China in its domestic market on a limited basis, becoming the first Japanese carmaker to reverse-import Chinese-made vehicles.
This signals that China is no longer merely a manufacturing base for the global auto supply chain—it is becoming the source of excellence in electrified products.
Chinese Automakers Break Through: Deep Localization, Beyond Just "Selling Cars"
The strategies chosen by Chinese automakers in Japan display distinct localization characteristics, far from a simplistic mindset of "exporting forces."
BYD's approach is representative.
In October 2025, BYD appeared at the 2025 Japan Mobility Show (Tokyo Motor Show), globally unveiling the K-EV BYD RACCO, a model tailored for the Japanese market. It simultaneously launched a "pure EV + hybrid" dual strategy, officially introducing its first plug-in hybrid model in Japan, the Sealion 06 DM-i.
With this move, BYD is directly entering the Kei car sector, which accounts for about 40% of Japan's auto market, engaging in a head-on clash with domestic giants like Toyota and Suzuki.
On the channel front, BYD is advancing with a "slow pace, deep roots" philosophy. Reports say BYD aims to establish a network of 100 stores in Japan and is continuously opening new locations. Including preparation rooms for test drives and consultations, BYD currently has 69 outlets nationwide. To sell pure electric light vehicles, it is also pushing a plan to open small-format stores in regional cities, separate from the 100-store system.
Autobacs Seven, Chery's partner, operates about 1,200 stores in Japan. Beyond traditional auto accessories, it has already ventured into new car sales for brands like BYD and Hyundai, boasting a mature retail network and after-sales foundation.
Reports indicate the joint venture between the company and Chery will launch its own EV brand through its development and sales subsidiary EMT, located in Yokohama, marketing it as a brand originating from Japan. EMT has recruited technical personnel from Honda (HMC), Mazda, and other automakers to develop vehicles specifically for Japan.
Taken together, Chinese automakers' layout in Japan has transitioned from a "testing the waters" phase to one of systematic deep cultivation. The rigorous demands of Japanese consumers regarding vehicle quality, detail, and service serve as a natural benchmark for quality verification.
If they can gain a firm foothold in the Japanese market, it means they have secured a "pass" to enter the global high-end market.
