As Japanese automakers gradually withdraw from the Chinese market, the latest data shows that Japanese companies’ investment in China in 2024 fell by 16% year-on-year. This trend has attracted widespread attention and industry insiders have expressed concerns.
In recent years, competition in the Chinese market has become increasingly fierce, especially in the field of new energy vehicles. The rise of local companies such as Tesla and BYD has put tremendous pressure on Japanese automakers. Many Japanese auto brands face the challenges of declining market share and weakening profitability and have to reduce their investment in China.
According to relevant data, in 2023, Japanese automakers’ investment in China was about 300 billion yen (about 2 billion US dollars), while in 2024 it is expected to drop to 250 billion yen (about 1.7 billion US dollars). This change not only reflects the adjustment of Japanese companies’ development strategies in China, but also means that their competitiveness in the global automotive market faces severe tests.
METI’s survey covers about 5,300 overseas subsidiaries in which Japanese companies hold at least 50% of their shares. It is reported that Japanese companies’ current investment in China accounts for 13.6% of their total overseas investment, which is lower than the share in Europe.
Compared with the second quarter of 2019, the investment of Japanese subsidiaries in China fell by 5 percentage points in the second quarter of this year. However, the report pointed out that China remains Japan’s second largest exporter and largest importer.
In June this year, Nissan Motor closed a plant in Changzhou, which has an annual production capacity of 130,000 vehicles, accounting for 10% of Nissan’s total production in China. At the same time, Nissan is also considering reducing the production capacity of other plants in China.
Similarly, in July this year, Honda Motor announced that it would close a plant in Guangdong Province and suspend production at another plant in Hubei Province. These measures also affected companies in areas such as automotive parts and materials production.
At the same time, Japanese materials manufacturer Nippon Steel Corporation decided to withdraw from its joint venture with China Baoshan Iron and Steel Co., Ltd. The move is expected to reduce Nippon Steel’s local production capacity in China by 70%.