BYD is playing the long game in Japan

{"text":[[{"start":3.24,"text":"It can be hard for newcomers to gain ground in sectors dominated by a few big players. But when a new technology comes along, the pecking order can change. That may be what BYD hopes will happen in Japan."}],[{"start":18.16,"text":"The Chinese electric-car maker — already market leader in China and Thailand — is very much on the back foot in Japan: it only sells 0.1 per cent of the country’s 4.5mn new vehicles a year. Toyota is way out in front, thanks in no small part to the extraordinary success of its hybrid strategy."}],[{"start":35.54,"text":"But, as Japan embraces electrification, the hybrid — a category that includes both cars whose batteries recharge via the grid and those that recycle the energy from braking — may well end up being supplanted by the battery electric vehicle. Battery costs are falling and electric models are becoming more affordable. The transition may be speedy, too: Japanese consumers’ familiarity with hybrids may pave the way."}],[{"start":60.6,"text":"There are signs that BYD is preparing for this opportunity, customising its offering to the Japanese market. The kei car is a good example. These small cars, which can be no more than 3.4 metres long, 1.5 metres wide and 2 metres tall with combustion engines capped at 660cc, account for almost a third of Japan’s vehicle market. BYD launched the Racco, an electric kei car, priced at around $13,500 after subsidies."}],[{"start":null,"text":"

"}],[{"start":89.96,"text":"The question for BYD is how big an opportunity the Japanese market could be. The group’s vertically integrated battery and powertrain structure gives it a cost advantage, important given local consumers’ sensitivity to vehicle prices."}],[{"start":104.26,"text":"If BYD could replicate its 6 per cent-or-so share of Thailand’s auto market it would be selling 270,000 vehicles a year in Japan. Its automotive gross margin was just over 20 per cent in 2025 while that of its overseas business reached 22 per cent in the first half of this year, suggesting international growth would be more lucrative than competing in China’s fierce price war."}],[{"start":128.36,"text":"Toyota remains more profitable business at the operating profit level, with a group margin of 7.4 per cent in the year to March, compared with BYD’s of about 5 per cent. If consumers end up stopping at conventional hybrids, Toyota’s customer loyalty and its dealership network will remain a formidable moat. But if a gradual shift towards electrification starts to extend to battery EVs, BYD could have more to gain than its current market share suggests."}],[{"start":159.62,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792478256_5691.mp3"}