Actress Alice Hirose at the launch event for BYD's electric mini vehicle Racco in Tokyo on July 28.
TOKYO (Jiji Press) -- Chinese automakers are banking on the Japanese electric vehicle market as they struggle with slowing growth in their home market and high tariffs in the United States and Europe.
BYD Co., a Chinese electric vehicle giant, released the Racco, a mini vehicle developed exclusively for the Japanese market, on July 28. BYD Vice President Liu Xueliang said at a launch event in Tokyo that the company will work to win a Japanese market share in the long run.
The automaker hired a former engineer at Japanese automaker Nissan Motor Co. who led the development of its Sakura electric mini vehicle to develop the Racco.
Liu Xueliang, Vice President of China's largest electric vehicle company BYD, at the launch event for the electric EV Racco in Tokyo on July 28
The BYD electric mini vehicle features automatic sliding doors popular among families with children and includes equipment such as an umbrella stand and a cup holder with heat insulation.
BYD sold about 4.6 million units globally last year, with growth primarily in Southeast Asia and Europe. It overtook U.S. automaker Tesla Inc. as the world's largest electric vehicle manufacturer.
In its home market, however, new car sales have slowed as the Chinese government reduced incentives for electric vehicle purchases.
Tariffs pose a significant challenge for Chinese automakers. The United States imposes 100 pct tariffs on Chinese-made EVs, and the European Union has raised tariffs on them.
In Japan where there are no such tariffs, BYD is cooperating with local importers to build a nationwide sales network.
Chery Automobile Co., a Chinese automaker, has announced plans to jointly develop an electric mini vehicle with Autobacs Seven Co., a Japanese auto parts maker, for sale in Japan as early as next year. Zeekr, a luxury Chinese electric vehicle brand, plans to release a high-priced electric minivan in Japan.
"Although the penetration rate of EVs is low compared with the United States and Europe, there are fewer restrictions and it is easier to enter," Hiroyuki Shimizu of international consulting firm AlixPartners said of the Japanese market. It is a "low-risk, low-return market," he said.
In contrast, Go Meiken of TNC Research & Consulting said, "It's difficult to imagine that Japanese consumers who want high quality are eager to buy Chinese vehicles." He added, "It's also a challenge whether they can expand sales and maintenance networks" to promote EVs in rural areas.