By Bloomberg
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More than two years after BYD began a high-profile foray into the Japanese market, the Chinese electric-vehicle (EV) maker is still struggling to win over drivers.
The carmaker sold just 5,300 vehicles between January 2023 and June this year despite opening its 45th sales location in Japan, introducing a fourth EV model and touting plans to debut an electric kei car – a popular style of street-legal microcar – in late 2026.
The moves have done little to ignite demand, and BYD is now turning to discounts – a practice that has put it front and centre of an industry crackdown in China – to boost sales. The company is offering discounts of up to 1 million yen (US$6,700) that, in addition to government subsidies, can slash sticker prices by as much as 50 per cent. Its Atto 3 retails for just under 4.2 million yen.
Even that makes it an outlier, as Japanese carmakers rarely cut prices. And while discounting has helped make BYD the most popular EV brand in China, the tactic could backfire in Japan because it risks making early buyers feel duped for paying higher prices and hurts resale value, according to Bloomberg Intelligence senior auto analyst Tatsuo Yoshida.
The challenges show the difficulties foreign carmakers face in Japan, where locals favour legacy brands like Toyota Motor and largely eschew battery EVs in favour of gas-electric hybrids. The overwhelming loyalty to home-grown giants has already hammered major legacy marques. General Motors withdrew its Saturn brand after poor sales, while Hyundai Motor is trying once again after abandoning the market in 2009.
For BYD, the lacklustre welcome in Japan contrasts with surging sales in Europe as the carmaker looks to expand abroad to counter challenges back home. BYD expects export sales to top 20 per cent of total sales this year.
But the longer-term opportunities of staying the course in Japan outweigh the shorter-term headwinds. EVs are set to account for just 3.4 per cent of new car sales in Japan this year, according to BloombergNEF, with the market expected to see growth in coming years.
“Winning Japan isn’t the point; leaving a mark is,” Yoshida said. “Earning even a sliver of recognition from the most demanding customers in the world matters for BYD. What they really want is to have a track record of doing business in Japan with the world’s most discerning, quality-conscious customers, even if it’s not economically rational.”
Still, the company has a long way to go to claw market share away from domestic makers. BYD sold 512 units in June across all models, compared with 1,137 for Nissan Motor’s Sakura – the country’s most popular EV. That was likely insufficient to cover salaries and keep showrooms running, Yoshida said.
Other well-loved Japanese carmakers are getting into the sector too. Honda debuted its first compact passenger EV this month, and Toyota and Suzuki Motor have announced plans to jointly launch a kei EV this year.
“Selling cars is all about securing brand loyalty, about creating lifelong customers,” Yoshida said. “And it’s highly doubtful whether BYD can really do that in Japan.”
