China set to overtake Japan in global auto sales

Chinese automakers are projected to become the world’s largest sellers of new vehicles in 2025, overtaking Japanese manufacturers for the first time and ending Japan’s dominance of more than 20 years.

According to a report by Nikkei Asia, Chinese automakers are expected to sell about 27 million vehicles worldwide this year, representing a 17% increase from the previous year. Meanwhile, Japanese automakers’ combined sales are forecast to remain flat at around 25 million vehicles.

The milestone marks a dramatic shift in global automotive leadership. Japan previously peaked at nearly 30 million vehicles sold in 2018, but Chinese manufacturers have closed the gap rapidly. In 2022, Chinese automakers trailed their Japanese counterparts by about 8 million vehicles.

The Nikkei analysis is based on company disclosures from January to November 2025 and data from S&P Global Mobility, covering both passenger and commercial vehicles.

Export growth drives Chinese expansion

Domestic Chinese sales account for around 70% of Chinese brand totals, with exports expected to reach approximately 7 million vehicles in 2025. This export growth has been driven partly by oversupply in China’s domestic market, leading to discounts and reduced profitability at home.

Chinese brands have recorded significant sales growth in Southeast Asia, Africa, and Central America, according to the report. The forecast includes sales of Chinese brands and determines vehicle origin based on the brand under which they are marketed, including partnerships such as Stellantis’ Leapmotor collaboration.

BYD and Geely are both expected to crack the global top 10 best-selling automotive brands, further cementing China’s position in the international market.

Implications for New Zealand

The shift in global automotive leadership could have implications for New Zealand’s vehicle market, where Chinese brands including BYD, MG, and GWM have already established a presence. The increased global scale of Chinese manufacturers may influence vehicle availability, pricing, and model diversity in the local market.

Chinese electric vehicle (EV) brands have gained particular traction in New Zealand, with models like the BYD Atto 3 and MG ZS EV becoming popular choices among local buyers.

The overtaking of Japan represents a significant milestone in automotive history, reflecting China’s rapid industrial development and the global shift towards electric mobility, where Chinese manufacturers have established strong positions.