BYD’s Japanese mini-car will not go on sale until the end of next year, but it has already created buzz – at least among officials in Tokyo worried about the challenge from China’s biggest automaker.The company plans to debut its all-electric “kei” car– a class of pint-sized, affordable vehicles smaller than a two-door Mini Cooper – at the Japan Mobility Show that opens to the public on Friday.The move will make BYD a rare foreign entrant in the “kei jidosha”The word translated as “light vehicle”, segment that accounts for about a third of Japan’s auto sales and for decades has been the almost exclusive turf of domestic players like Honda and Suzuki.BYD has sold just 6,600 of its standard-sized electric vehicles since entering the Japanese auto market nearly three years ago, Atsuki Tofukuji, who heads the company’s passenger car sales business in Japan, told Reuters in an interview. “In terms of our initial expectations, our sales in Japan are missing a zero,” Tofukuji said. Foreign automakers only had a 6% market share in the 3.7 million new passenger cars that were sold in Japan during last year. But some Japanese officials and industry insiders believe BYD can pose a serious threat to Japanese car manufacturers with its electric kei vehicle, because Japanese consumers are cost-conscious. Electric cars are eligible for subsidies and tax breaks in Japan.By designing a car specifically for the world’s fourth-largest auto market, BYD appears to be in Japan for the long haul and determined to win over the country’s famously picky consumers. Chinese automakers are scrambling to boost overseas sales as a response to a brutal pricing war at home. They’re also taking market share away from Japanese automakers throughout Southeast Asia.“Japan’s auto industry is one of the country’s core industries and is highly competitive,” said Eisuke Mori, a lawmaker and head of the ruling Liberal Democratic Party’s parliamentary automobile caucus. “But when it comes to EVs, Chinese automakers have been on the rise globally, and we have a strong sense of crisis about that,” He said this in a written answer to questions. Mori’s comments were also echoed by more than a half-dozen government officials and industry insiders who declined to identify themselves because the subject was so sensitive. Some of those individuals were stark in their assessment of the potential challenges to Japan, with three saying BYD represented a much-needed wake-up call for Japanese automakers that have focused primarily on hybrid technology while falling behind on EVs.The decision to sell a kei car came after some BYD company executives made a stopover in Tokyo in 2023 and saw how prevalent the cars were, BYD’s Tofukuji said. “They saw how many kei cars were on the roads and were struck by the sheer variety of body styles. I think that’s when they really got a sense of the Japanese market.Designed for short trips on narrow roads, kei cars are largely unavailable outside Japan and can be no more than 3.4m long and 1.48m wide with an engine no larger than 660cc. The ultra-compact size – the engine is roughly a third of the Toyota Corolla’s smallest – means kei cars are sluggish on hills and highways but can squeeze into the tightest of parking spots. The size also means lower taxes for drivers. Japan’s most popular kei model is Honda’s N-Box series, which starts at around $11,400 (about R195,386). Around 200,000 of the cuboid, four-door, four-seaters were sold last year. Nissan offers a kei EV, the Sakura, that starts at around $17,000 (about R291,365). Last year it sold around 23,000 of them, according to industry data. BYD believes there is big potential demand for EVs in Japan as more people move away from petrol cars, and it aims to have a presence in all of Japan’s 47 prefectures by the end of next year, Tofukuji said. He declined to disclose the expected price of the kei EV.“For Chinese automakers, being able to sell in Japan is a kind of status – a sign they’ve become a true car manufacturer,” Koji Endo is the chief executive analyst of SBI Securities. Some government officials expressed concern about BYD’s challenge. But they said Japan was unwilling to resort to protectionism, which would lead to action at the World Trade Organisation and retaliatory measures in the Chinese auto market, the world’s largest and an important one for Japanese carmakers. Japan’s new prime minister, Sanae Takaichi, has previously mentioned support for scrapping EV subsidies that she said only benefited BYD and Tesla. Reuters reported recently that the government was considering a freeze on tax incentives for cars based primarily on emissions. This usually benefits EV makers. The EV subsidies scheme was reworked last year to account for factors like the number charging stations built. As a result, BYD customers now get a subsidy of ¥350,000 (about R39,394.30), when previously they were eligible for as much as ¥850,000.Making inroads in Japan will likely require BYD to compete on price, Endo said. “People buy kei cars because they’re cheap. So BYD will likely use very strategic pricing at first to gain market share.”
2025-10-30 15:39:02
BYD’s mini-car ambitions may be a wake-up call for Japan
