Japanese Big Three Say Goodbye to the "Golden Era"

The spring of 2026 feels like an unexpected cold snap for Japanese automakers who have been present in the Chinese market for over twenty years.

Recently, Honda Motor Company released its consolidated financial statement for fiscal year 2025 (April 2025 to March 2026). For the first time since its listing in 1957, the company reported an annual net loss: an operating loss of 414.3 billion yen and an attributable net loss of 423.9 billion yen. In the previous fiscal year, the company had posted a profit of 835.8 billion yen.

At the press conference, CEO Toshihiro Mibe attributed the main causes of the loss to asset write-downs and impairment losses in the process of electrification transformation, totaling 1.58 trillion yen. Disclosures show that in fiscal year 2025, Honda recorded total losses related to electric vehicles of 1.45 trillion yen, and it expects to face an additional 500 billion yen in costs in fiscal year 2026.

Honda’s crisis is equally evident in the Chinese market.

In April 2026, Honda China's retail sales reached only 22,600 units (UTC+8), down 48.3% year-on-year, nearly halving. Among them, GAC Honda's sales in April were just 5,100 units (UTC+8), plunging 72.42% year-on-year—a record monthly low for the joint venture in recent years. From January to April, Honda’s cumulative retail sales in China were 145,100 units, down 28% year-on-year. This marks the fifth consecutive year of falling Honda sales in China.

Notably, before April 2026, Honda had already endured 27 consecutive months of year-on-year declines. From a broader historical perspective, GAC Honda peaked at over 1.6 million units sold annually in China in 2020, but by 2025 this dropped to 645,300 units—more than half evaporating in just five years.

The product front offers little optimism either.

According to public data, in March 2026, among nearly 10 models under GAC Honda, only the Accord and Breeze barely surpassed 5,000 units in monthly sales (UTC+8), Odyssey just exceeded 1,000 units (UTC+8), while the remaining 7 or 8 models sold less than 1,000 units each; pure electric models P7 and Breeze PHEV saw sales of just over one hundred units per month.

Market analysts point out: the Accord PHEV’s price is 238,800 yuan, with a WLTC pure electric range of less than 100 kilometers, and the trunk space is significantly reduced due to battery layout; the Vezel starts at 119,900 yuan and Odyssey at 235,800 yuan, but with competitors cutting prices substantially, Honda's terminal discounts are limited.

Facing continued sales decline, Honda plans to respond by cutting capacity in China. It is reported that GAC Honda's Huangpu factory in Guangzhou will cease production in June 2026 (UTC+8), while Dongfeng Honda’s plant in Wuhan is planned to shut down in 2027. Together, the two factories have an annual capacity of about 480,000 units. After adjustment, Honda’s total annual capacity in China will shrink from the current 1.2 million units to 720,000—about half of its historical peak.

Honda is not alone.

The three major Japanese brands are all under pressure: both Toyota and Nissan face varying degrees of difficulty in the Chinese market.

As the most resilient of the three, Toyota sold 106,500 units in China in April 2026 (UTC+8), a 25.4% year-on-year decline—marking the third consecutive month of negative growth. At the terminal level, the Highlander, which once commanded premiums, now sells for as low as about 130,000 yuan, with discounts needed to retain customers.

However, on an annual basis, Toyota's 2025 sales in China still exceeded 1.78 million units, a 0.23% year-on-year increase, ending the three-year streak of declining sales from 2022 to 2024. Even so, Toyota is still under deep pressure in the Chinese market.

Nissan faces even greater challenges. In April 2026, Nissan's sales in China were 32,100 units (UTC+8), down 30.8% year-on-year. Among these, Dongfeng Nissan (including Nissan, Venucia, and Infiniti brands) sold 27,600 units (UTC+8), and Zhengzhou Nissan sold 4,477 units.

Over a longer time frame, Nissan's sales in China have declined for seven consecutive years. In 2025, Nissan's full-year sales in China were about 653,000 units—nearly 60% down from the peak of 1.564 million in 2018, with market share falling to 4.1%. Globally, Nissan reported a net loss of 550 billion yen for fiscal year 2025, and planned to lay off about 20,000 people and shut down seven factories.

Meanwhile, the overall market share of Japanese brands in China is shrinking rapidly. According to the China Passenger Car Association, in April 2026, Japanese brands’ retail share was 10.9%, down 1.2 percentage points year-on-year.