BYD is rolling out electric-vehicle charging stations and ramping up marketing and customer incentives in Japan, aiming to boost sales in a market that has become a stumbling block in the Chinese automaker’s global expansion.
Warren Buffett-backed BYD (002594.SZ), opens new tab has become China’s largest EV maker after years of breakneck growth at home. Now it is expanding overseas, including in Japan, one of the world’s largest auto markets.
But Japan remains tough for foreign automakers to penetrate. Demand for EVs has long been sluggish and the government this year changed how EV subsidies are calculated, reducing them for BYD and several of its rivals, and raising concerns about protectionism.
To win over Japanese drivers, BYD has offered discounts on the first 1,000 cars sold of its newest model, and is airing TV commercials starring a Japanese actress.
The strategy has meant higher-than-expected marketing costs. BYD’s overseas push is being closely watched, not least because the automaker is almost as valuable as GM (GM.N), opens new tab and Ford (F.N), opens new tab combined.
Still, some Japanese are wary of buying big-ticket Chinese products due to quality concerns. Asia’s two largest economies also share a complicated wartime history and years of political tension.
“The cars are great, but I don’t think they’ll sell in Japan,” said 58-year-old Yukihiro Obata, who was visiting a BYD showroom in Yokohama, which neighbours Tokyo, in July with his son.
“Japanese people think Japan’s manufactured goods are superior to Chinese and South Korean ones. We just can’t believe Chinese products could be higher quality,” he said.
Obata said he was not opposed to buying a foreign automobile and was also considering EVs from Mercedes-Benz (MBGn.DE), opens new tab, Audi and Hyundai (005380.KS), opens new tab.
Shenzhen-based BYD opened its first showroom in Japan in February last year and has so far sold over 2,500 cars.
By contrast, Toyota Motor (7203.T), opens new tab sold just over 4,200 battery EVs in Japan over the same period, while nearly 17,000 Teslas (TSLA.O), opens new tab were registered in the country as of end-March 2023, according to the most recent industry data available.
BYD offers three models and now has more than 30 showrooms.
“There are people in Japan who absolutely hate Chinese products, so it’s not a good idea to try and force ourselves on them,” Atsuki Tofukuji, president of BYD Auto Japan, said.
