Asian Autos: China-exclusive NEV strategies show mixed results, JV restructuring emerges as the next battleground

Japanese and Korean automakers continue to face structural challenges in China, with market share and profitability under pressure amid low factory utilization. This note assesses their turnaround efforts through China-exclusive NEV strategies and export initiatives, and examines the implications of JV restructuring. Combined Japanese OEM retail sales fell 14% YoY in 2025 to 2.9mn units, a fourth consecutive annual decline, and are down 23% in 2026 YTD, with share falling to 13% from a 2021 peak of 23%. Korean OEMs have fared worse, with share down to 0.7% in 2025. Utilization remains depressed (Honda 24%, Nissan 31%, Toyota 61%, Mazda 44%, Hyundai/Kia in the low-20s), pushing most players near break-even, though Toyota's China profit is ~8% of consolidated OP. Toyota stands out with resilient NEV sales and share improving to 7.0% in 2026 YTD on bZ-series models;