Japan's three largest automakers are losing ground rapidly in China, the world's largest auto market, as homegrown electric vehicle manufacturers accelerate past them and reshape the competitive landscape that Japanese brands once dominated.

Sharp declines across the board

Toyota, Nissan and Honda all posted double-digit sales declines in China during the first half of 2026, according to Japan's Kyodo News and China's state-run Global Times. Toyota's sales totaled 694,700 vehicles, down 17.1% from the same period a year earlier. Nissan's sales fell 15% to 237,000 vehicles. Honda suffered the steepest decline, with sales plunging 34.7% to 205,800 vehicles, extending a streak of year-over-year monthly declines that has now stretched 29 consecutive months through June.

Honda's struggles have been particularly acute at the brand level. Its joint venture GAC Honda saw sales fall 46% year-over-year, while Dongfeng Honda's sales dropped 22%. In June alone, Honda's retail sales in China plunged 44.5% year-over-year. The severity of the decline has prompted structural changes within the company: GAC Honda's Huangpu plant in Guangzhou, which has produced models including the ZR-V and Fit, is scheduled to end production this June, while Dongfeng Honda's Wuhan plant is expected to close in 2027. Honda's overall sales volume in China has collapsed from roughly 1.66 million vehicles in 2020 to approximately 650,000 today.

A steep decline in Japanese market share

The combined slump reflects a broader, multiyear erosion of Japanese automakers' position in China. According to the China Association of Automobile Manufacturers, Japanese brands' collective market share in China fell steadily from 24% in 2020 to the........

© International Business Times