The world's second largest Chinese EV manufacturer landed in Japan February 10, 19:52

"It's a huge threat. Japan is no longer a stable market, and there is a high possibility that it will be overtaken by foreign manufacturers,"

said a senior executive at a major Japanese automaker.

The “threat” refers to BYD, the largest Chinese EV (electric vehicle) manufacturer that has entered the Japanese passenger car market.

Although it is not well known in Japan, it is the world's second largest EV sales unit after Tesla in the United States.

We approached the aim and strategy of entering the Japanese market.

(Economics Department reporter Toma Atmosphere Yamane Chikara Enoshima Airi)

Chasing Tesla, the world's second largest Chinese EV manufacturer lands in Japan

At the end of January, BYD launched the SUV (multi-purpose sports vehicle type EV) as its first entry into Japan.

The distance that can be traveled on a single charge is about 480 km, and the price is 4.4 million yen.

It is about 1 million yen cheaper than EVs of Japanese manufacturers that compete in terms of vehicle size and mileage.

If you use government subsidies to boost the spread of EVs, the price will drop further.

The latest safety technology such as a system that recognizes the surroundings of the car with a camera and automatic braking is not an option, but is installed as standard equipment.

Overseas, it was sold in China, Australia, and other countries, with over 200,000 units sold last year.

The company plans to launch a compact car and a sedan-type EV within the year, targeting the Japanese market with these three EVs.

I also took a test drive to see how good Chinese EVs are.

Not to mention the quietness unique to EV, the response of acceleration is not bad.

I was a little surprised by the voice recognition function that allows you to open and close the car windows when you speak.

I also interviewed the test drive event and talked to the visitors, but it was impressive that there were many positive reactions.

One man said, ``I've tried other EVs from other manufacturers, but I think it's amazing that at this price, it meets the minimum performance and quietness that I want. I want to see and think about whether to buy it or not."

The words of a senior executive at a Japanese manufacturer who said, "This is a great threat," crossed my mind.

Drastic change in the shift to EV Power map of the automobile industry

As the shift to EV progresses as a response to decarbonization, the power map of the automobile industry is about to change.

Of course, if engine cars are included, traditional automakers still rank among the top new car sales in the world.

Last year's top sales were Toyota with 10.48 million units, Volkswagen Group in second place with 8.26 million units, and South Korea's Hyundai Group in third place with 6.84 million units. 6.15 million units for the three-company alliance).

However, when it comes to EV sales, the lineup of top players changes completely.

The first place is Tesla of the United States, the second place is BYD, and the third place is GM = General Motors of the United States (including joint venture brands in China).

Volkswagen and others followed, and finally the Japanese consortium of three companies, including Nissan, entered seventh place.

Established as a battery manufacturer

What kind of manufacturer is BYD, which is increasing its presence in the field of EV?

Originally founded in China as a battery manufacturer in 1995, it is a new manufacturer that entered the automobile business in 2003.

With the support of the Chinese government, which promotes EVs, sales have grown rapidly.

The company's strength lies in its original battery-related technology, and the company has independently developed batteries that use less rare metals and produces them in-house to reduce costs.

It has received a certain amount of praise in terms of performance, and has a cooperative relationship with Toyota in research and development of EVs in China.

BYD's battery was used in the new EV announced by Toyota in China last year.

In addition, it is a manufacturer with momentum, building a new EV factory in Thailand in Southeast Asia, where Japanese cars have a market share of about 90%.

Landing in Japan The problem is lack of awareness

This manufacturer, which has built up a track record overseas, has set its sights on the Japanese market this time.

However, there are actually some issues to be overcome in order to increase sales in Japan.

One is to improve the brand image.

Nowadays, home appliances made in China are not uncommon in Japan, but when it comes to cars, Japanese and German cars are overwhelmingly better known in terms of name recognition and brand power.

The key man responsible for capturing the Japanese market also frankly admits this.

President Tofukuji

"In Japan, I think that there are many people who can not imagine what kind of company it is even if they hear BYD. In terms of age, domestic cars and European cars are the two major brands, and there are others. There is also a generation that is a bit unexpected in meaning.”

Building a nationwide sales network

That is why we are focusing on building a sales network.

The company plans to open more than 100 stores nationwide in three years, and will partner with imported car dealers with extensive sales experience in Japan.

The company's strategy is to handle everything from vehicle sales to after-sales service in the same manner as dealers of Japanese manufacturers, and to steadily improve its name recognition and win the trust of its customers.

We also provide training for sales managers.

A prospective manager of a store in Tokyo

"I think that customers have a negative image of Chinese products, such as 'cheap or bad,' but I was able to learn about high quality through this training. I want to convey it with confidence."

Entry into Japan is linked to global strategy

While I could feel the seriousness of the company's entry into Japan through the interviews, I also wondered why they put so much effort into Japan.

Although the number of EVs sold in Japan is increasing, there is a clear difference in scale from overseas markets where the shift to EVs is accelerating due to factors such as a lack of charging infrastructure.

The percentage of EVs in new passenger car sales is 21% in China, 12.1% in Europe, and 5.8% in the United States, all of which are significantly higher than Japan's 1.7% (China and the United States: research company MarkLines Europe: European Automobile Manufacturers Association, Japan: Japan Automobile Dealers Association, etc.).

When I frankly asked if there was any aim other than prior investment in anticipation of market growth, the key sales person revealed that the Japanese market is in a special position in terms of the company's global strategy.

President of BYD Auto Japan Atsuki Tofukuji

"If it is recognized in the Japanese market, it will be a very big medal, and it will also be a proof of high quality. From the head office in China, about 5 to 10 people always come to this office. If we can create a business model that can meet the strict needs of Japanese customers, we would like to use it as a model for the rest of the world.”

The company believes that if it receives a high evaluation in Japan, it will also lead to evaluation in other markets where Japanese manufacturers are dominant, such as Southeast Asia.

The strategy of Japanese manufacturers against

In response, what strategies will Japanese manufacturers adopt?

We interviewed Nissan, which has the top share in the Japanese EV market.

Now, the company is focusing on EVs of the size of minicars, which can be said to be Japan's "national car", accounting for about 40% of new car sales in Japan.

One of the factors hindering the spread of EVs is the high cost of batteries, which are more expensive than gasoline vehicles.

Therefore, in the development, we focused on the data that most users of mini vehicles do not travel more than 50 kilometers per day.

Based on that, the distance that can be driven on a single charge is 180 km, which is shorter than that of general EVs.

By reducing the amount of batteries installed and keeping the selling price below 2 million yen including subsidies depending on the grade, the number of units sold last year exceeded 20,000, making it the best-selling EV in Japan.

The company's strategy is to expand the market base with easy-to-reach minicar EVs, while attracting more expensive EVs such as SUVs.

Nissan's executives expressed confidence in BYD's entry by emphasizing its past achievements and technological capabilities.

Senior Managing Executive Officer Endo

“If foreign manufacturers enter the market, we think that the market will be activated and the charging network will spread further, so we are very positive about it. We have a superiority, and our product appeal is second to none. We would like to maintain our position as the leader of EVs in the Japanese market.”

What impact will it have on the Japanese EV market?

Even for the world's second largest EV manufacturer, it will not be easy to increase sales in a market where Japanese cars are highly trusted.

But apart from executives at major automakers who described it as a "tremendous threat," there were others who didn't hide their concerns about BYD.

In the future, we cannot deny the possibility that it will become a presence that cannot be ignored even in Japan.

BYD isn't the only company expecting growth in the Japanese market.

Last year, Germany's Mercedes-Benz and Volkswagen, and South Korea's Hyundai introduced new models one after another, and overseas manufacturers also sold more than 14,000 EVs.

If Japanese manufacturers fall behind these overseas players, it could shake the key industries that have led the Japanese economy and employment.

In that sense, I would like to firmly ascertain how Japanese manufacturers are trying to survive the competition in the automobile industry, which is entering a period of change such as the shift to EVs.

Economics Department Reporter

Toshin Taiki Joined the Bureau in

2013

After working at the Okinawa Bureau and the Yamaguchi Bureau, he is currently in charge

Economics Department Reporter

Chikara Yamane Joined the station in

2007

After working at the Matsue station and the Kobe station, etc.

Economic Department Reporter

Airi Enoshima Joined

in 2017

Current position after working at the Hiroshima Bureau