Chinese automakers, leveraging low prices, have surpassed Japanese brands in market share within the European automotive market for the first time as of May, the Nikkei reported on Thursday (July 2).

According to new car sales statistics from the European Automobile Manufacturers Association (ACEA) for May, the combined sales of five Chinese automakers—BYD, SAIC Motor, Geely Holding Group, Chery Automobile, and Leapmotor—reached 138,410 units, a 65% increase compared to the same month last year.

In contrast, the combined sales of six Japanese manufacturers—Toyota, Nissan, Suzuki, Mazda, Honda, and Mitsubishi—totaled 130,424 units during the same period, marking a 3% decline from the previous year.

Last month, Chinese automakers captured a 12% market share across 31 major European countries, while Japanese manufacturers recorded 11%.

Starting with its April statistics, the European Automobile Manufacturers Association added three more Chinese companies to its data and included the performance of the Swedish brand Volvo under its parent company, Geely.

The rise in market share for Chinese firms starting in May is attributed to the competitive pricing of their vehicles.

The European Union (EU) has imposed tariffs of up to 45.3% on Chinese-made electric vehicles (EVs) since October 2024, citing concerns that Chinese government subsidies have distorted price competitiveness.

However, analysis suggests that Chinese vehicles maintain strong price competitiveness even with these tariffs in place.

For instance, the BYD Dolphin Surf Boost, a compact electric vehicle, is sold in Germany starting at 26,990 euros (approximately 47.77 million won), which is 3% cheaper than the Renault 5 E-Tech, a vehicle in a similar class from France's Renault.

Beyond EVs, BYD is also expanding its exports of plug-in hybrid electric vehicles (PHEVs) to Europe, with sales in the 31 major European countries in May increasing 2.4-fold compared to the same month last year, according to the Nikkei.

Meanwhile, as Chinese companies accelerate the development of hybrid vehicles, there is growing concern among Japanese manufacturers, who have long led the global hybrid market.

According to the Mainichi Shimbun, Chinese firms such as Geely, Chery, and Changan Automobile have released a series of hybrid models this year with improved fuel efficiency.

These new hybrid models from Chinese companies are characterized by their use of technologies accumulated in the EV sector, such as the integration of improved, high-performance batteries.

Among them, Geely announced in April that it had developed a new hybrid system called i-HEV using artificial intelligence (AI), claiming a fuel efficiency of 45 km per liter, which it says surpasses that of the Toyota Prius.

The Japanese automotive industry is wary of the moves by Chinese companies to strengthen their hybrid vehicle offerings, the Mainichi Shimbun reported.

One industry official told the Mainichi Shimbun regarding Geely's claims, "This is only a record from a test course, and there is a lack of real-world performance data." However, another official noted, "Competition to recruit engineers is fierce," and assessed that "the engine technology of Chinese companies is certainly improving."

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