China's auto industry has risen to the top of the world for the first time in 25 years, overtaking Japan. Led by electric vehicles, China's offensive has wrested not only the Asian market—Japan's home turf—but also leadership in the global market.
According to a compilation of reports from major foreign media, including the Nikkei and Reuters, on the 22nd, 2025 global new car sales data show that the combined sales of Chinese auto brands surpassed Japanese brands, ranking No. 1 worldwide for the first time. It is the first time since 2000—25 years—that Japanese autos have lost the top spot in global sales.
Experts said Chinese automakers began to surge by securing an early lead over Japan in the eco-friendly vehicle market centered on EVs. This reversal materialized as China's BYD and Geely each outpaced Nissan and Honda—pillars of pride for Japan's auto industry—in sales. BYD rapidly increased its share in emerging markets such as Southeast Asia and South America, leveraging price competitiveness secured through vertically integrated battery operations.
During the same period, Japanese automakers rested on hybrid technology that uses both electricity and gasoline and were late in shifting to EVs. Afterward, Japanese corporations struggled amid a double whammy of sluggish sales in China and weakened competitiveness overseas.
Experts say now that China has overtaken Japan, a true test awaits its auto industry. As U.S. President Donald Trump continues to emphasize high tariff rates on Chinese imports, the European Union (EU) has finalized countervailing duties on Chinese EVs, stepping up its pushback. Within China, signs of slowing domestic consumption due to a real estate slump are evident. Observers say the structural limitation of China's auto industry—having to rely on exports instead of the domestic market—could pose an obstacle to future growth.
Fukao Sanshiro, a senior research fellow at Itochu Economic Research Institute, told the Nikkei, "Whether the momentum of Chinese autos continues depends on how effectively they cultivate overseas markets such as Europe and Southeast Asia," adding, "Securing global production bases beyond the domestic market and managing geopolitical risks will be key to holding onto No. 1."