(Yicai) Aug. 9 -- Toyota Motor, Honda Motor and Nissan Motor posted tumbling sales in China in July as the Japanese auto manufacturers are buffeted by intense competition from Chinese marques, the ongoing price war and the consumer transition to electric cars.

Honda was the hardest hit, with sales diving 41.4 percent last month from a year earlier to 53,000 vehicles, while Nissan’s shipments slumped 20 percent and Toyota’s 6.1 percent, according to data from the China Passenger Car Association.

The market share of Japanese cars in China has been shrinking for the last three years, sinking to 17 percent in 2023 from 24.1 percent in 2020, the association said. The decline accelerated last year and this year, amid an intense price war, the challenges are getting even greater.

Honda’s shipments in China have been on the wane since hitting a peak of 1.63 million units in 2020. In the first seven months, sales plunged 24.4 percent year on year to 469,000 units.

"According to customer feedback, a quarter of our client base has been taken away by new energy cars," a sales manager at a Honda dealership told Yicai. To cope with the drop in demand, the Tokyo-based company has recently closed or halted production at two of its seven auto factories in the country.

Despite the rapid growth of the NEV market, Japanese automakers like Honda are still mainly focused on producing gasoline-powered cars. Nissan only has one all-electric model for sale, the ARIYA, which shifted just 1,682 units in the first six months. Toyota and Honda’s electric cars are also selling poorly, with only a few hundred sales each month.

Yet the penetration rate of electric cars in China reached 51.1 percent in July, jumping 15 percentage points from the same period last year, according to the association.

EVs accounted for 16 percent of total global car sales in 2023 at 13.6 million autos, according to data from CleanTechnica. China made up 65.5 percent of the world’s electric car sales, while Europe accounted for 20 percent and North America 10 percent. Japan, which is mostly a fossil fuel-powered auto market, only made up 1 percent.

Editor: Kim Taylor