Gasgoo Munich-Gasgoo reported on April 15 that data released by the Japan Automobile Importers Association (JAIA) shows sales of imported cars in Japan (excluding domestic manufacturers) rose 3% year-on-year to 238,081 units in 2025, marking the first increase in seven years.
Amid modest overall growth, a structural shift driven by electrification is underway. Mercedes-Benz and BMW reported sales declines, while BYD doubled its sales year-over-year, gaining visibility among Japanese consumers.
EVs Drive Market Rebound; Import Electrification Rate Reaches 14%
Battery electric vehicles (EVs) were the primary driver of growth in Japan's imported car market in 2025.
Imported EV sales rose 34% to 33,299 units, marking the seventh consecutive year of growth. These models accounted for 14% of total imported car sales, up 3 percentage points from the previous year.
This increase stems from specific factors.
The JAIA chairman stated at a press conference in July 2025 that the number of imported EV models expanded from 20 models across 10 brands in 2020 to 173 models across 22 brands by the end of June 2025. This represents a roughly ninefold increase in four years.
Increased government subsidies for EVs have supported consumption. Starting January 1, 2026, the maximum EV subsidy will increase from 900,000 yen to 1.3 million yen.
Supportive policies and a wider range of models have driven the expansion of the imported EV market.
The strong performance of imported EVs contrasts with Japan's low overall EV penetration rate.
As of September 2025, Japan's new energy vehicle penetration rate stood at 2.8%, with pure electric models accounting for only 1.7%.
Imported EVs hold a significant share of Japan's EV market. They are meeting electrification demand and playing a key role in Japan's transition to electric power.
BYD Doubles Sales; Localization Strategy Penetrates "Closed Market"
BYD's performance stood out among brand results.
BYD's sales in Japan doubled to 4,536 units in 2025.
Image Source: BYD
Compared to the 3,870 units (up 62%) previously reported by Nikkei Chinese for 2025, BYD's momentum accelerated in the fourth quarter. The "Sealion 7" SUV, launched in April, continued to sell well. BYD plans to launch the light EV "Racco" in Japan in summer 2026 to expand market share.
Given the high brand loyalty and the 90% market share held by domestic automakers, how did BYD achieve a rapid breakthrough?
The answer lies in a deep localization strategy.
BYD's approach involves understanding the Japanese market from the ground up.
In October 2025, BYD attended the 2025 Japan Mobility Show (Tokyo Motor Show), unveiling the K-EV BYD RACCO tailored for the Japanese market. It also launched a "pure EV + hybrid" strategy, introducing its first plug-in hybrid model in Japan, the Sealion 06 DM-i.
BYD has entered the Kei car segment, which accounts for about 40% of the Japanese auto market, competing directly with local giants like Toyota and Suzuki.
BYD's growth is not an isolated case.
Tesla has not released official sales figures for Japan; however, sales in the "Other" category, which Tesla dominates, totaled 13,717 units.
The landscape of Japan's imported car market is changing due to electrification.
Traditional giants, however, are facing challenges.
Mercedes-Benz sales in Japan fell 6% to 49,654 units in 2025, retaining the top spot, while BMW sales dropped 7% to 34,044 units.
German brands face pressure from a slow transition to electrification, lengthy product cycles, and Japanese consumers increasingly adopting electric vehicles.
Electric vehicle manufacturers from China and the U.S. are emerging as significant challengers to German brands, which have long dominated Japan's imported car market.
