Japanese automakers struggle in China amid rapid shift to electric vehicles

The sales crisis for Japan’s automakers in China continues, as industry data reveals a rapid shift towards electric vehicles (EVs), resulting in a steep decline in gasoline-powered vehicle purchases. In the first quarter, total sales of Japanese auto brands in China dropped by 32% year-on-year, more than twice the rate of overall market contraction.

While automakers such as Volkswagen AG have also been impacted by this change in China, it is Japanese automakers that stand out due to their limited contribution to the fast-growing electric and plug-in hybrid sales sector. As a result, production and profit margins in China are under pressure as automakers reduce output and prices for gasoline-powered vehicles to maintain inventory levels.

Mitsubishi Motors Corp recently revealed a suspension in the production of its Outlander SUV in China for…