Toyota, Powerless to "Cover Up" for Japanese Cars

A set of data, unbelievable.

September sales, Nissan and Honda, both in the Chinese market were over 20,000 vehicles. What does this mean? Less than the monthly sales of a single model at its peak. In China market share dropped to 10.7%, five years ago it was 23%.

Of course, a wise man doesn't brag about past glories. Because, they are too ashamed to face it.

October trends were also not optimistic, the "Golden September, Silver October" season car market expected did not arrive on schedule, the situation for Japanese cars became more urgent. Currently, among the Japanese "Big Three", only Toyota can barely maintain dignity.

However, this remaining dignity is already difficult to become Japanese cars' "fig leaf".

Follow in Nokia's footsteps?

Collapse, or Breakdown?

Both exist.

In China market share, Japanese cars left with only 10%, this achievement can be called "breakdown", but Japanese cars that cannot find a way to stop the decline are indeed on the edge of "collapse".

"Unless the situation changes, we will not be able to survive."

"The company has reached the edge of survival and extinction."

Since entering 2026, Japanese cars have issued similar warnings multiple times. By September, the Japanese giants couldn't even issue a warning. This sales performance, like a heavy hammer, struck the heart of Japanese car companies again.

Two Hondas, Dongfeng Honda relied on these two classic SUV models CR-V and HR-V to maintain appearance, sold 17,000 vehicles, decline continues. This is already considered an awkward number, more awkward is GAC Honda, monthly sales less than 5,000 vehicles, dropped over 80%.

Honda admitted, sales decline not only affected by gasoline price rise, more key is internal product issues. From product structure, currently over 90% of Honda models on sale are still fuel vehicles.

Nissan sales in China 23,600 vehicles, year-on-year plummeted 60%, has been declining for consecutive months. Nissan plans to cut 30% capacity in China, interwoven with Chery taking over Nissan's factory in South Africa. Everyone knows, this is not just buying a few machines, but represents a thorough iteration of the automotive industry logic.

What is being replaced is Japanese cars.

Only Toyota, is still trying, to become the main support for Japanese cars sales in China. Models like Corolla, Camry, RAV4 accumulated long-term users, fuel and hybrid models also retained competitiveness, monthly sales maintained at 100,000 vehicles.

But decline speed is also accelerating. Because, in the pure electric market, Toyota has not yet established a scale advantage comparable to traditional fuel cars.

If Japanese cars reached the Nokia moment, it is not an exaggeration.

Toyota is also powerless to cover up for Japanese cars.

The root cause is known.

According to British "The Economist" magazine, "Japanese auto industry faces the most severe structural crisis in decades, multiple companies simultaneously bear declining profits, lagging electrification transformation, and intense competition pressure from Chinese car factories."

In just five years, Japanese cars share in China sales from 23% quickly dropped to less than 10%, the speed of decline, and every report below expectations, pain travels through the industry chain to the nerve endings of the Japanese economy.

Performance in China market, for Japanese cars, is a fatal blow.

"Sunset"

Japanese media asked more than once, "Is our last pillar industry also breaking down?"

Just looking at China market, Japanese cars indeed not optimistic. Even reached "life or death" moment. But, placed in global market, Japanese cars situation, also not optimistic.

A few months ago, "The New York Times" recorded a glaring fact, Honda since 1957 listed issued annual net loss for the first time, triggering this loss electrification strategy withdrawal, bill over $9 billion.

As for Nissan, layoffs, selling buildings, cutting multiple product lines, days hard to endure had to use "selling buildings" this kind of "all-in" self-rescue means, but effect not good.

On technology route choice, Japan bet wrong again, bet too concentrated, full heart thought hydrogen, hybrid, gas-to-electric conversion can each hit 70%, unwilling to bet heavily on pure electric.

For example Toyota, viewing hydrogen fuel cell passenger cars as future core, Toyota Mirai 10 years only sold about 27,000 vehicles, hydrogen station construction far below plan, fell into "few cars few stations" death loop.

If, in China market, Japanese cars were beaten by technology route, then in other core markets, Middle East market was seriously involved by geopolitics. Geopolitical conflict led to key supply chain routes interruption, logistics costs soared, export channels blocked dead, causing Japanese cars in this core market appeared large scale decline.

September, Middle East sales year-on-year plummeted 29.8%, with same period China market 19.7% drop, jointly dragged Toyota global sales down for continuous third month.

Toyota in statement expressed, due to higher gasoline prices suppressed demand for gasoline and hybrid cars, China market drop extended to continuous eighth month, dropped in Middle East market, in Japan and US (Toyota largest market) respectively grew 1.8% and 8.4%.

In Southeast Asia market where Japanese cars long occupied, also appeared a "technological suicide delayed ten years". Japanese cars in major markets all appeared same three fatal wounds, bet wrong hybrid technology, supply chain rigid, arrogant pricing.

So, when BYD used 240% growth speed broke old track, PwC partner Patrick Chichiman verdict is becoming reality, "Japanese cars invincible era in Southeast Asia, completely ended."

When BYD used Atto 3 captured Thailand taxi market, Honda CR-V in Malaysia configuration list still stayed at 12 years ago level. When BYD Thailand factory to Europe reverse export, Toyota only hurriedly announced 2030 electric vehicle plan.

When Southeast Asia, Middle East, Latin America these once Japanese strongholds, eye view all are Chinese electric cars, global auto power rule rewrite speed, no more obvious.

Japanese cars in Southeast Asia lessons, comparable to Kodak missing digital camera revolution. In Europe market, foreign media words also not polite, Japanese brands already "Sunset", poor performance partly reason is, Japanese cars usually developed in local market, power system with Europe market demand rarely fit.

Nissan CEO Espinosa once pointed this, "Competition from Chinese enterprises becoming intense. Past, we once invested heavily Europe market specific products. But at our current scale, this model already hard to sustain."

According to "Nikkei Asia Review", Toyota, Honda, Nissan, Suzuki, Mazda, Subaru and Mitsubishi these seven Japanese major car companies, expected 2026 fiscal year combined net profit 3.9 trillion yen, compared to 2023 fiscal year 7.54 trillion yen historical peak decline 48%, close to halved.

Currently, only US market can still support Japanese sales face, just still many difficulties, tariff stick always hangs on head. Japanese car companies, in North America market reliance too heavy.

Pointed Tech Tree Wrong

Many people also asked, "Why do Japanese cars always walk wrong direction on the most correct path?"

Actually, Japanese car companies every time betting route speed not slow, but often appears, extreme technology and market demand development mismatch, just an expensive self-indulgent fantasy.

Starting from 2000, Japan in hybrid technology just occupied absolute advantage, once Toyota Prius launched, became energy saving vehicle benchmark. However, because sticking to internal combustion lost initiative, missed embracing pure electric winning timing.

Moreover, in past years multiple tech field proofs, Japanese companies once mastered a certain advanced technology, favorite thing to do, through building tight patent barriers, lie down receiving global manufacturing profits.

On new energy vehicle development, Japanese cars also did this. Previously, Japanese cars bet on hydrogen energy. Can say, Japan in hydrogen energy field investment, can be called national strength.

In 2008, Japan started research fuel cells, by 2013 relied on revitalization strategy established advantage. Can say, from tech patents to infrastructure, from hydrogen production to hydrogen storage to fuel cells, almost hydrogen energy every link laid patent barriers.

Japan holding global 83% hydrogen fuel cell patents, trying to build "toll station" monopoly profits. Intent too obvious, so that global market all saw through.

"US and China two markets completely not according to Japan planned script walk", industry insiders expressed, US and China markets unwilling to be controlled by others, collectively turn to pure electric. "China chose pure electric route, US under Tesla flag also bet pure electric."

Thus, Japan technology lost support in US China main markets. Plus hydrogen energy car sales bleak, hydrogen station layout slow, no maintenance volume, charging speed not advantageous, makes these tech patents temporarily no use.

"Bet half day, found invested several trillion yen tracks, basically no one following run."

So, when pure electric market advanced rapidly, market continuous decline, made Japanese cars panicked, also unwilling to abandon hydrogen energy layout consumed energy, also failed to pure electric layout "cut nail cut iron", so that appeared "multiple points betting, main secondary imbalance" situation. "Fuel + Hybrid + Pure Electric + Hydrogen" parallel, but resource allocation seriously leaned towards hydrogen and hybrid, pure electric input insufficient.

"Previously we overestimated global pure electric market popularity speed, radical single pure electric route layout with regional market differentiation pattern, enterprise own tech rhythm seriously mismatch." Honda President Tomohiro Sanbu admitted prediction error.

So, many people always joke, "Japanese people always point wrong tech tree."

However, for Japanese car companies, not can't see trend, is saw but can't transform full force. Huge conglomerate system and capillary supply chain network, also full force blocking Japanese cars transformation. Moreover, when old tech profit structure rooted deep, even new tech more tempting, no which boss person has courage to actively smash relied survival "basic base".

Hesitant, also elephant sitting on floor, so often at tech change node, point wrong tech tree. Once point wrong, all efforts, one second back to zero.

"Who lies on merit book eating old capital, who is not far from being eliminated."

Era wheel rolling, to any participant said, is a new beginning. Japanese cars story far not reached end game, but old road already can't walk.

"When road reaches mountain front must have road, with road must have Toyota car", powerless to cover up for Japanese cars Toyota, can find new road for Japanese cars?

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