Toyota, Honda, Nissan and Mazda built a combined 1.02 million vehicles in China between April and September, down 32 per cent year on year and the lowest for the period since 2008. Against the roughly 2.8 million units the four built in the same six months of 2020, six years have erased the capacity expansion of two decades.
The spread inside the group
Honda fell furthest, down 60 per cent year on year to 131,716 units, about 90 per cent below its 2020 peak. In recent months the company has been building 10,000 to 20,000 vehicles a month in China, down roughly 70 per cent year on year.
Nissan output fell 49 per cent to 163,192 units, about 80 per cent below peak levels. Toyota built 663,079 units, down 18 per cent and 23 per cent below the same period in 2020. Mazda grew 43 per cent but remains 52 per cent below its historical peak.
The market backdrop explains part of it. China’s new car market fell 22 per cent in the first nine months of the year, with slower economic growth and reduced purchase incentives for new-energy vehicles weighing on demand. Higher international oil prices from Middle East tensions added pressure. Sales of non-new-energy vehicles fell by more than that in the same period.
The Japanese makers’ product mix remains weighted to combustion and hybrid models, which left them more exposed as the conventional segment contracted.
Sales confirm it
Honda sold 161,372 vehicles in China over April to September, down 48 per cent year on year. Nissan sold 182,854, down 46 per cent, with its mainstay Sylphy sedan visibly losing demand.
Their position in electric vehicles is weaker still. As buyers moved from combustion to electric, the Japanese brands failed to expand share in the battery-electric segment. Nissan sold just 2,991 electric vehicles in China in the six months, down 62 per cent, and has indefinitely postponed the launch of its GT electric model, previously scheduled for before December 2025. The N7, a battery-electric sedan launched in April 2025, saw China sales fall 76 per cent year on year in the same April to September window. A strong early reception did not hold, as a dense wave of new Chinese models shortened the honeymoon period for any launch.
The longer arc is not new. Through the 2000s, as China’s car market grew quickly, the Japanese makers expanded capacity aggressively, and China’s importance rose toward parity with North America. Since 2020 the market has converted to new energy, domestic makers including BYD rose, conventional demand kept weakening and Japanese brand share came under pressure, with China output drifting back toward pre-expansion levels.
The contraction spreads to suppliers
Shrinking China operations also hit the Japanese parts suppliers that entered the market behind them. On 20 October, Koito Manufacturing said it would dissolve a subsidiary producing automotive lighting equipment in China. Some Japanese suppliers are trying to build relationships with Chinese carmakers while facing intense price competition from local component firms.
For the carmakers, the arithmetic is unforgiving. A plant running at a third of capacity is not simply a slower plant. It is a fixed-cost problem that eventually forces a decision on consolidation, and that decision has consequences for the supplier network, the workforce and the local joint-venture partner.
Editor’s note: This is an adapted translation of the original Gasgoo report. It has been trimmed and restructured for readability for an international business audience. The full original (in Chinese) is at https://auto.gasgoo.com/news/202610/30I70476432C101.shtml.