Toyota and Honda See Sharp H1 Sales Decline in China as EV Substitution Accelerates
Alina Collins
Toyota and Honda reported H1 2025 China sales declines of 17% and 35% respectively, as surging EV adoption and rising oil prices squeeze fuel-car demand — and market-share erosion shows no sign of bottoming.
How bad were the H1 numbers?
Toyota sold 694,700 new cars in China in H1, down 17% year-on-year — the first H1 decline in two years.
Honda fared worse: 205,800 units, down 35%, marking a fifth consecutive quarter of declines.
This means → Honda's drop is double Toyota's, showing that smaller, slower-to-electrify Japanese brands are hit hardest.
Why are Japanese brands suddenly struggling?
The core driver is structural substitution: Chinese buyers are shifting rapidly to EVs and hybrids, shrinking the fuel-car market itself.
Middle East tensions have pushed oil prices higher, raising running costs and adding a second drag on fuel-car demand — pressure from both supply and demand sides.
In plain terms = Japanese cars haven't gotten worse; Chinese buyers' choices have fundamentally changed, and the fuel-car lane is narrowing.
Is Toyota's EV pivot fast enough?
Electrified models (including hybrids) accounted for 63% of Toyota's H1 China sales, up 11 percentage points year-on-year.
Pure-EV sales surged 83% to 65,100 units, led by models like the bZ3X.
This reflects a real acceleration in Toyota's electrification — but overall sales still fell, meaning EV gains are not yet large enough to offset fuel-car losses.
How wide is the gap between joint ventures?
FAW Toyota fell 27% to 274,100 units — the steepest drop in the Toyota family.
GAC Toyota slipped just 6% to 341,100 units; Lexus dropped 16% to 71,900 units.
On Honda's side, GAC Honda plunged 46% to 89,400 units; Dongfeng Honda fell 22% to 116,400 units.
This means → even within the same group, performance diverges sharply — each JV's product strength and localisation capability determines how deep the decline runs.
Is there any relief in sight for H2?
June alone looked worse: Toyota down 27% to 115,300 units; Honda down 45% to 32,500 units.
A Honda spokesperson was blunt: "Domestic demand remains weak, and the tough operating environment will most likely continue."
In plain terms = the carmakers themselves don't expect a near-term turnaround — whether H2 stabilises depends entirely on whether new models can compete.
Content is for reference only, not financial advice.