Chinese passenger car sales in Europe have surpassed those of Japanese vehicles for the first time. Despite the European Union imposing high tariffs on Chinese electric vehicles (EVs), Chinese manufacturers are rapidly increasing their sales in Europe, leveraging competitive pricing and plug-in hybrid vehicles (PHVs). Japanese companies, strong in hybrid vehicles (HVs), are falling behind due to a lack of electric vehicle offerings, which limits their ability to capitalize on various electrification support programs.
On July 3, the Nihon Keizai Shimbun reported, citing data from the European Automobile Manufacturers Association (ACEA), that sales of passenger cars from five major Chinese companies exceeded those from six major Japanese firms for the first time in May across 31 key European countries. Sales from Chinese companies BYD, SAIC Motor, Geely, Chery, and Leap Motor reached 138,410 units in May, a 65% increase from the same month last year. In contrast, sales from Japanese automakers Toyota, Nissan, Suzuki, Mazda, Honda, and Mitsubishi fell by 3% to 130,424 units. Chinese car sales outpaced Japanese sales by 6%.
The growing market share of Chinese cars is also evident in sales distribution. According to ACEA data, European brands accounted for 62% of new car sales in May, while Chinese brands captured 12%, surpassing Japanese brands at 11%. South Korean brands held 8%, and American brands accounted for 5%.
Changes in statistical criteria have also influenced these figures. ACEA included three additional Chinese companies, including Geely, in its statistics starting in April, and began reflecting Volvo's sales under its parent company Geely. However, even in April, when the criteria changed, Japanese car sales were still slightly ahead at 127,064 units compared to Chinese sales of 125,864 units. Just one month later, the rankings flipped.
Among Chinese manufacturers, BYD's growth has been particularly notable. The company reported on July 1 that its overseas passenger car sales for the first half of the year reached 789,367 units, including pickup trucks, a 70% increase from the same period last year. In June, overseas sales accounted for 44% of its total passenger car sales, a 20 percentage point increase from a year earlier. BYD Chairman Wang Chuanfu stated at a shareholder meeting last month that overseas sales are expected to exceed 1.6 million units in 2026. Last year, BYD's overseas passenger car sales totaled 1.04 million units, indicating a projected increase of more than 50% this year.
The EU has reported that Chinese EVs are sold at excessively low prices due to unfair government subsidies, posing a threat to the regional automotive industry. As a result, it plans to implement additional tariffs in the fall of 2024. These tariffs will add up to 35.3% to the existing 10% tariff, potentially reaching a maximum of 45.3%. However, Chinese manufacturers have maintained their price competitiveness. According to a report by Nikkei, BYD's small EVs start at €26,990 (approximately $48,000), about 3% lower than similar models from France's Renault.
Chinese companies are also expanding exports of PHVs, which are not subject to the additional tariffs. In May, BYD's PHV sales in the 31 major European countries increased to 2.4 times the amount from the same month last year. The sluggish domestic market in China is driving these companies to boost their overseas sales. BYD's new car sales in China for the first half of the year totaled 1,808,511 units, marking a 16% decrease from the same period last year, the first decline in six years. As competition intensifies and the domestic market slows, BYD is rapidly increasing its share of overseas sales.
European countries reintroducing EV support measures have also benefited Chinese manufacturers. Germany, which eliminated EV subsidies in December 2023, reinstated a program in January offering up to €6,000 to buyers of EVs and PHVs. Sweden has resumed subsidies for low-income individuals, and Italy has expanded its support measures. While Japanese manufacturers have been recognized for their fuel-efficient HVs, their limited EV models have excluded them from subsidy benefits.
Beatrix Kaim, a researcher at the German Automotive Research Center, told Nikkei, "European consumers do not consider Japanese cars when contemplating EV purchases." Japanese companies are also reducing their strategic focus on the European market. Nissan's long-term vision announced in April highlighted Japan, the U.S., and China as key markets, with little mention of Europe.
To mitigate the burden of additional tariffs, Chinese manufacturers are accelerating local production in Europe. Leap Motor plans to produce EVs at Stellantis' factory in Spain. Meanwhile, Nissan is considering consolidating two production lines into one at its underutilized Sunderland plant in northern England, and discussions are underway between Nissan and Chery to produce Chery vehicles on the remaining line after the consolidation.
* This article has been translated by AI.
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