China’s Auto Sales Surpass Japan’s

Based on new car sales figures for 2025, Chinese automakers will become the world’s leading car market for the first time, while Japanese automakers, which had held the top spot for over 20 years, will fall to second place. China has already become the world’s leading auto exporter, solidifying its status as a major automotive nation. To counter the price-competitive Chinese companies, countries will erect barriers in terms of tariffs and new standards. Increased global friction may lead to a strengthening of protectionism aimed at protecting domestic companies.

This data was compiled by Nikkei based on information released by companies from January to November 2025 and data from S&P Global Mobility. Sales figures include commercial vehicles. Sales include both domestic and overseas markets, including exports. Country classification is based on the proportion of ownership; in the case of equal ownership, the country of origin of the manufacturer listed under the brand name at the time of sale is used.

China’s global auto sales are projected to increase by 17% year-on-year, reaching approximately 27 million units. China became the world’s leading auto exporter for the first time in 2023. Overall sales are also expected to rise to the top in 2025.

In China, where domestic automakers account for approximately 70% of total car sales, the government has implemented policies to support the widespread adoption of pure electric vehicles (EVs) and plug-in hybrid vehicles (PHVs). As a result, new energy vehicles now account for nearly 60% of passenger car sales.

Japanese automakers’ combined sales reached approximately 25 million units, flat year-on-year, losing their top position. Previously, global car sales were dominated by competition between the US and Japan. At its peak in 2018, Japanese sales reached nearly 30 million units. The lead over Chinese automakers, projected at approximately 8 million units in 2022, has vanished, overtaken in just three years.

On the other hand, signs of oversupply in China are intensifying, with the largest automaker, BYD, beginning price reductions, leading to increasingly fierce price competition. Statistics from the China Association of Automobile Manufacturers show that from January to November, sales of new energy passenger vehicles in the 100,000-150,000 yuan price range were the most prevalent, accounting for 23% of the total.

Chinese automakers are turning to exports to find a way out. The increasing trend of selling surplus EVs domestically to overseas markets has been interpreted by some as “deflationary exports.”

In ASEAN countries, where Japanese cars hold a dominant position, Chinese car sales have surged by 49% to approximately 500,000 units. Toyota’s Thai subsidiary stated that as of November, Japanese cars accounted for 69% of new car sales in Thailand, a sharp decline from approximately 90% five years ago.

In Europe, Chinese car sales are projected to grow by 7% to approximately 2.3 million units. While the EU has imposed tariffs on Chinese EVs, the proportion of PHV exports outside of these countries is rapidly increasing. Sales in Africa have grown by 32% to 230,000 units, and in Central and South America by 33% to 540,000 units. Chinese car sales are also steadily expanding in emerging market countries.

The trend of countries protecting their domestic companies by introducing tariffs and new standards is intensifying.

The US and Canada have imposed tariffs exceeding 100% on Chinese EVs. The EU has also imposed tariffs of up to 45.3% on Chinese EVs. In addition, a standard for small EVs has been set up, which relaxes the technical requirements compared to regular EVs, encourages European companies to produce within the region, and further strengthens the constraints.