Hyundai Car Outsold by Chinese Makers... Only 17 Units Sold in Japan Last Month

Competition in Electric Vehicles Extends to Local Makers and China's BYD

Hyundai Motor sold 17 units in Japan last month. Having declared its re-entry after 12 years, the company saw potential by selling about 500 units in the first half of the year, but the results about six months later are disappointing for the company. It also appears to be losing in a direct competition with China's BYD.

According to new registration data compiled by the Japan Automobile Importers Association, Hyundai sold 199 units locally from January to May this year, including 17 units last month. Excluding locally produced vehicles and overseas-produced models of Japanese brands, Hyundai's market share among purely foreign brands is about 0.2%. Since resuming operations in Japan last year, Hyundai has been selling only the electric Ioniq 5 and the hydrogen fuel cell vehicle Nexo. Sales are conducted online without dealers, focusing on car-sharing services and leasing.

Electric car Atto3 by China's BYD

The company states that "results cannot be measured by numbers alone," but the performance clearly reflects the local market's stubborn preference for foreign car brands. Notably, BYD's performance stands out. Emerging as the world's largest eco-friendly car maker, BYD had focused on commercial vehicles such as buses in Japan but began selling passenger cars earlier this year. BYD sold 141 units last month and 440 units from the beginning of the year through last month. Currently, this maker sells only the compact SUV Atto 3 locally.

Japan is considered a difficult market for foreign complete car makers to penetrate. This is largely due to local makers like Toyota tightly dominating the market. The electric vehicle market is following a similar trend. Until last year, Tesla led the local electric vehicle market, but this year sales have rapidly increased centered on Japanese brands such as Nissan, Mitsubishi, and Honda.

The electric vehicle BZ concept car is displayed at the Toyota exhibition hall at the Shanghai International Automobile Industry Exhibition held in April this year.

Tesla's estimated sales from January to May this year are just under 1,900 units. Nissan sold about 25,000 units during the same period. Given the extensive history of Japanese automakers with electrification technologies including hybrids, they are responding quickly despite a late start.

With Chinese and American makers as well as local companies continuously enhancing the competitiveness of their electric vehicles, competition to gain leadership in Japan's electric vehicle market is expected to intensify. Hyundai has introduced a service program targeting local demand that includes free regular inspections and parts replacement. In the second half of the year, it plans to launch the new Kona electric vehicle, followed by a high-performance model of the Ioniq 5 next year. BYD also plans to release the compact hatchback Dolphin this summer and the luxury sedan Seal around the end of the year.