The growth of sales of low-cost Chinese electric vehicles is shaking the decades-long dominance of Japanese brands in Southeast Asia, according to a study released this Tuesday by the consulting and auditing firm PwC.
The study cited by “RTP” indicates that the market share of Japanese manufacturers, led by Toyota, Honda, and Nissan, has dropped to 62% of sales in the first half of 2025 in the six largest markets in the region, compared to an average of 77% in the past decade.
On the other hand, Chinese producers have increased their nearly nonexistent market share to over 5% of 3.3 million units sold.
The Chinese offensive is justified by the price war that the sector is facing in China, which has led local manufacturers to expand their growth strategy to nearby external markets, benefiting from a regional trade agreement that ensures tariff-free access.
“The entry of Chinese electric vehicle manufacturers marks the end of an era of Japanese dominance in Southeast Asia”, pointed out Patrick Ziechmann, an analyst at PwC in Malaysia.
One of the most recent cases is Indonesia, considered the largest consumer market in the region, where Toyota’s sales declined by 12% between January and August, to 161,079 units, while the Chinese company BYD saw its sales triple to 18,989.
A determining factor for this growth is the affordable prices of Chinese models compared to their Japanese competitors. “Price is the decisive factor. The Japanese must react; otherwise, they will continue to lose market share”, said the vice president of the Indonesian automobile manufacturers association, Jongkie Sugiarto, as quoted by the British newspaper “Financial Times.”
The presence of Chinese brands in that Southeast Asian country is not limited to sales, as at least 15 brands are already active and another five are expected to enter the market soon.
Furthermore, some Chinese brands have already set up their own factories, while others are producing in partnership with local companies, benefiting from temporary exemptions from import taxes for electric vehicles.
However, starting in 2026, Chinese brands will have to produce locally to continue accessing subsidies, which could hinder the growth of smaller brands.
