Toyota, Nissan, and Honda Lose Ground in China as Local Brands Surge

There’s no gentle way to put this: Japan’s three biggest automakers are getting crushed in China.

New data from Kyodo News shows Toyota sold 694,700 vehicles in China during the first half of 2026, down 17.1% from a year earlier. Nissan moved 237,000 units, a 15.0% drop. And Honda sold just 205,800, a staggering 34.7% decline.

The June numbers put the losses in sharper relief. All three companies posted lower single-month sales compared to June 2025. Honda has now reported year-over-year declines for 29 consecutive months, nearly two and a half years of uninterrupted losses in the world’s largest auto market.

Honda’s slide has been particularly brutal. It started with seven straight months of decline in August 2024. By November 2024, that streak hit ten months. The company ended calendar 2025 with full-year sales down 24.28%. By March 2026, it had clocked 26 consecutive months of decline. It’s now at 29 and counting.

Toyota and Nissan aren’t in much better shape. Toyota’s 17.1% drop in the first half follows years of losing share to Chinese automakers flooding the market with competitive electric and plug-in hybrid vehicles at price points Japanese brands struggle to match.

The forces behind the collapse are compounding. Chinese buyers are flocking to homegrown brands like BYD, Xiaomi, and NIO, which now dominate the new energy vehicle segment. The Chinese market is shifting to NEVs faster than almost anyone predicted, and Japanese automakers, historically strong on hybrids but slow on full EVs, are paying the price. Add a brutal price war that has squeezed margins across the board, plus lingering supply chain disruptions and semiconductor shortages, and you get a situation that has left Japan’s Big Three scrambling.

For Japanese automakers, China was once the growth engine. Now it has become their biggest headache.