Produced by Zhineng Auto
The operations of Japanese automakers globally and in China were once considered legendary.
However, as the market share of Japanese brands in China dropped from nearly 20% in 2020 to less than 10% in 2025, how did Japanese automakers perform globally in the first half of 2026?
Especially with China exporting so many vehicles, to what extent were the seven major Japanese automakers (Toyota Motor Corporation, Honda Motor Co., Ltd., Nissan Motor Co., Ltd., Suzuki Motor Corporation, Mazda Motor Corporation, Subaru Corporation, and Mitsubishi Motors Corporation) impacted in the first half of 2026?
In terms of figures, the seven Japanese automakers sold a combined total of approximately 11.42 million units in the first half of the year, a year-on-year decrease of only 2.3%. Since the financial reports for Japanese automakers have not yet been released, today's article mainly explores sales volume, production capacity, electric vehicle (EV) strategies, and supply chains.
Part 1: Sales Volume and Regional Sales of Japanese Automakers
In the first half of 2026, the seven Japanese automakers sold a combined total of approximately 11.5 million units globally, a year-on-year decrease of 2.3%, indicating that the overall figures remained relatively stable.
Over the past decade:
◎ Toyota Motor Corporation alone grew from 9.22 million units in 2016 (global retail sales of Toyota and Lexus brands) to 10.54 million units in 2025, an increase of about 14% over the decade. It surpassed 10.31 million in 2023 and reached a new high in 2025.
◎ Based on the fiscal year, Honda Motor Co., Ltd. slipped from 4.74 million units in 2016 to 3.72 million units in 2025, a drop of over 1 million units in a decade.
◎ Nissan Motor Co., Ltd. still had 5.79 million units in fiscal year 2017, but by the calendar year 2025, it was left with only 3.2 million units.
◎ Suzuki Motor Corporation is an exception against the trend; relying on India, it climbed from 2.45 million units in 2020 to 3.3 million units in 2025.
◎ Mazda Motor Corporation fluctuated slightly between 1.25 million and 1.5 million units, with 1.26 million units in 2025, maintaining a consistently small scale.
◎ Subaru Corporation fluctuated at a scale of approximately 900,000 units.
◎ Mitsubishi Motors Corporation's automobile sales have also consistently remained at the level of 800,000 to 900,000 units.
In the first half of 2026, Toyota sold 5.0089 million units, accounting for nearly 60% of the seven automakers. Suzuki sold 1.7997 million units, surpassing the other major players, followed closely by Honda with 1.6677 million units and Nissan with 1.5061 million units. Mazda sold 606,900 units, Subaru approximately 450,000 units, and Mitsubishi approximately 450,000 units. The total reached approximately 11.5 million units, a year-on-year decrease of 2.3%.
Note: According to Kyodo News, the combined total of the eight automakers is 11.92 million units; there may be discrepancies between wholesale and retail figures here.
Looking at regional breakdowns, we can see where the markets for Japanese automakers are located.
◎ The first region is China, where the market share of Japanese brands dropped from 23.1% in 2020 to 9.8% in 2025. In the first half of 2026, Toyota sold 694,700 units in China, a year-on-year decrease of 17.1%; Honda sold 206,500 units, down 34.6% year-on-year; Nissan sold 237,500 units, down 15.0% year-on-year. The three combined sold 1.1387 million units in China. Adding all Japanese brands together, the total is around 1.2 million units.
◎ The second region is North America, which acts as the market stabilizer. Toyota sold 1.4523 million units in North America, a slight year-on-year increase of 0.9%; Honda sold 854,600 units, up 1.6%; Nissan sold 670,100 units, down 1.2%; Subaru sold 307,300 units in the US, down 4.5%. Given the high vehicle prices in North America, Japanese automakers filled most of the gap left by the decline in China through their North American sales.
◎ The third region is India, where Suzuki stands out. Suzuki sold 1.0467 million units in India in the first half of the year, a year-on-year increase of 16.8%, setting a record for the first half. India alone accounts for more than half of Suzuki's global sales.
◎ The fourth region is Europe and others. Mazda sold 93,000 units in Europe, a year-on-year increase of 11.3%, making it the only one among the seven to show a significant increase in Europe, while the European Volkswagen Group has been working very hard this year.
Overall, the sales volume of Japanese automakers remains acceptable, mainly supported by diversification to offset the decline in the Chinese market.
Part 2: Regional Production and the Opening of the Component System
The global layout of Japanese automakers can be traced back a long time, forming a factory network spread across five continents. Where production is, the market is, and components flow accordingly.
◎ Toyota's production structure is the most representative.
Domestic production was 3.17 million units in 2016, fluctuating between 2.66 million and 3.37 million units over the decade, and reached 3.28 million units in 2025, basically leveling off. Overseas production was 5.81 million units in 2016, rising all the way to 6.68 million units in 2025, hitting record highs repeatedly.
In the first half of 2026, domestic production was 1.65 million units, and overseas production was 3.21 million units; overseas production is now nearly twice that of domestic production. Toyota has placed over 60% of its production capacity overseas, which helps stabilize the impact of tariff and exchange rate fluctuations.
Honda and Nissan are on a shrinking curve.
◎ Honda's overseas production dropped from 4.18 million units in 2016 to 2.71 million units in 2025, a decrease of more than a third over the decade; domestic production also fell from 820,000 units to 690,000 units.
◎ Nissan's decline is more pronounced; overseas production was cut from approximately 4.71 million units in 2016 (fiscal year 2017 basis) to 2.38 million units in 2025; domestic production dropped from about 990,000 units to 570,000 units. Honda's overseas production was 1.3179 million units and domestic production was 361,700 units; Nissan's global production in the first half of the year was 1.506 million units, with its scale continuing to shrink.
◎ Suzuki's overseas production is almost equivalent to its production in India, increasing from 2.15 million units in 2016 to 2.47 million units in 2025, while domestic production rose from 790,000 units to 960,000 units.
◎ Subaru's overseas production has long hovered around 300,000 units (at the Lafayette plant in the US), while domestic production dropped from 730,000 units in 2016 to 540,000 units in 2025; in the first half of 2026, domestic production was 243,300 units and overseas production was 192,500 units.
◎ Mitsubishi's overseas production dropped from 540,000 units in 2016 to 410,000 units in 2025; it has the smallest scale and the weakest presence; in the first half of 2026, domestic production was 251,400 units and overseas production was 209,800 units.
The moat of Japanese automakers is half in complete vehicles and half in the serialized network woven by Tier 1 suppliers such as Denso Corporation, Aisin Corporation, and JTEKT Corporation. An engine has hundreds of parts, and a transmission has hundreds of parts; this system has pushed costs and reliability to the extreme through decades of integration.
The number of components in the "three electrics" (motors, batteries, and electronic controls) is far lower than that in fuel powertrains. A fuel vehicle requires three to five thousand parts, while the powertrain of a battery electric vehicle (BEV) cuts out a large portion. With fewer parts, the precision manufacturing advantages accumulated by the serialized network are diluted.
More challenging is that in the two core areas of batteries and intelligent driving, Japanese automakers are not strong on their own. For batteries, they need to turn to Contemporary Amperex Technology Co., Limited (CATL); for intelligent driving and smart cockpits, they need to turn to Huawei and Momenta.
Starting in 2026, Japanese automakers have opened up significantly at the component level, and they are also encouraging their joint ventures to integrate more with Chinese technology.
Part 3: Electric Vehicles: The Pivot in 2026
In 2026, Japanese automakers collectively pivoted towards electrification. The question is whether they truly succeeded in developing their own electric vehicles or simply adjusted according to market changes.
◎ Honda's actions were the most decisive; after demand declined in the US, it adjusted its pace in the American market. In China, it also began to gradually delegate authority, no longer stubbornly insisting on doing everything in Japan.
◎ Toyota and Nissan handed over intelligent driving and smart cockpits to Chinese companies like Huawei and Momenta. Nissan even used its Sunderland plant in Europe to manufacture vehicles for Chery Automobile. This is the first time Japanese automakers have manufactured vehicles for Chinese brands in Europe.
◎ Suzuki's breakthrough is in India; leveraging the Suzuki-Toyota alliance, it is promoting battery electric vehicles (BEVs) like the Maruti eVX in India.
◎ Mazda and Subaru are taking the slow lane. Mazda is betting on electrification through a joint architecture with Toyota and Denso, while Subaru continues to reap the benefits of Toyota's hybrid and electric technologies, also acting as a downstream user of Toyota's technology.
BYD Company Ltd.'s sales in Japan in the first half of 2026 increased by about 40% year-on-year, and it also developed a dedicated battery electric K-Car for Japan called "RACCO" (Sea Otter), though whether it will succeed remains to be seen.
Conclusion
With the electric pivot in 2026, Japanese automakers adjusted their massive investments in the US, granted greater autonomy to their joint ventures in China, and introduced the latest technologies into the Chinese market.
The factory capacity accumulated by Japanese automakers over the past decade remains, and new-generation products are beginning to integrate into the Chinese supply chain. It seems that besides in the US and India, Japanese automakers and the Chinese automotive supply chain are starting to find a better way to cooperate.