Japanese And American Auto Brands Losing Sales In China

Why did the sales of American and Japanese auto brands in the Chinese market drop by more than 20 percent year-on-year?

Answer: Insufficient innovation in the new model

1. Outdated marketing methods: In today’s world where social media and content marketing are popular, Japanese cars seem a bit traditional and conservative in brand communication and user communication compared to some new forces and Chinese brands. The failure to effectively use new marketing tools and platforms to establish emotional connections with young consumers is also one of the reasons for the decline in their brand influence.

2. Chinese automakers now prefer the direct-sale store model, while Japanese and American automakers prefer the dealer model. The dealer model has also become a shackle for Japanese and American automakers.

3. Chinese car companies basically adopt a fixed-price model, selling cars according to the price on the model launch day, with few discounts; whereas Japanese and American car companies have chaotic pricing.

4. Japanese car companies are good at precision machinery manufacturing and hardware integration, but their accumulation in software development, user experience design, data operations, etc. is relatively weak.

When Chinese consumers, especially the younger generation, pay more and more attention to the smoothness of smart cockpits, the rich application ecology of car systems, and the experience of high-level assisted driving, Japanese cars often seem to be “half a beat slower” in this regard.

5. The intelligent experience of automobiles has strong regional characteristics. The Chinese market’s demand for intelligent networking is iterating very quickly, and local technology companies have already formed strong advantages in voice interaction, map navigation, in-car entertainment, etc.

The R&D decision-making power of Japanese automakers in intelligentization is often concentrated in their headquarters in Japan, and they are not timely and sufficient in responding to the rapid changes and localized needs of the Chinese market.

6. Japanese car systems are often self-contained, with poor compatibility with the open Android ecosystem or Apple CarPlay, and a lack of content in the app store, making it difficult to meet the diverse needs of users.

In contrast, Chinese brand models are usually equipped with powerful, open-ecological smart cockpit systems, and even use flagship chips such as Qualcomm Snapdragon 8155/8295 as standard, which has formed a generational difference in the intelligent experience.

Lastly, Japanese automakers such as Toyota have long adhered to the “multi-path” technology strategy, believing that pure electric is not the only solution, and hydrogen fuel and hybrid power should also have a place.

In major global markets, especially China and Europe, when policies and markets have clearly tilted towards pure electric, this “even-handed” investment has dispersed resources, resulting in insufficient investment and slow pace in the pure electric track.