Japanese Automakers in Southeast Asia Encroached by China "Steepest Market Share Decline"

Japanese Company Once a Mainstay in Southeast Asia
Rapid Market Share Decline Due to Chinese Low-Price Offensive

Market share of Japanese automakers in Southeast Asia has sharply declined over the past five years, showing the steepest drop among major country manufacturers.

According to Bloomberg's data on the 26th (local time), Japanese car manufacturers experienced the largest market share losses in Southeast Asian automotive markets from 2019 to October 2024: Singapore (-18 percentage points), Thailand (-12 percentage points), Malaysia (-4.9 percentage points), and Indonesia (-6.1 percentage points). In contrast, Chinese companies expanded their market share at the fastest rate. The US and Germany saw slight increases in market share in Singapore.

In the past, Japanese automakers were considered the "mainstays" of the Southeast Asian market, with strong brand loyalty among local consumers. However, they are gradually losing ground due to aggressive low-price competition from Chinese companies. China has aggressively established automobile production bases in Southeast Asia to circumvent strengthened US and European tariffs on Chinese goods.

Among these trends, there are criticisms that Japanese companies have not promptly recognized the increasing demand for battery electric vehicles in the Southeast Asian market. In particular, Japanese automakers' market share in Thailand and Singapore, which exceeded 50% in 2019, has recently fallen to 35%.

China's largest electric vehicle manufacturer, BYD, challenged the Indonesian market in June. BYD rose to 6th place in sales in Indonesia last month. BYD also completed its first Southeast Asian factory in Thailand in July.

Meanwhile, Japanese Nissan recently announced plans to reduce production at one of its two factories in Thailand and cut about 1,000 jobs. Suzuki has decided to close its Thailand factory by the end of next year.

To overcome the crisis, Japanese brands are forming partnerships and investing in long-term projects to develop vehicle software and solid-state batteries. Earlier this year, Toyota unveiled a prototype of a carbon-neutral combustion engine that can further improve hybrid technology, while Honda, Nissan, and Mitsubishi formed partnerships to collaborate on software and electric vehicle infrastructure.

However, it remains uncertain how much ground Japanese companies can regain amid ongoing Chinese advances. Tatsuo Yoshida, senior automotive analyst at Bloomberg Intelligence, stated, “Chinese companies have been aggressive even before the tariffs from the US and Europe took effect and will strengthen further,” adding, “Chinese production could double in the future.”