Kamal Ghorui
China’s auto industry is moving at a pace that is starting to worry some of the biggest global carmakers. Leaders from Honda, Ford and Toyota have openly admitted that the competition is getting tougher, especially with the rapid rise of electric vehicles.The shift is clearly visible in the numbers. Over 13.17 million new energy vehicles, including EVs and plug-in hybrids, were sold in China in 2025. These made up close to 60 percent of total car sales in the country. For legacy brands that still depend heavily on petrol cars, this change has been difficult to match.
Honda’s 0 SUV and 0 Sedan.
Honda is one of the worst hit. The company recently scrapped two upcoming EVs, the 0 SUV and 0 Sedan. That itself shows how challenging it has become to make EVs profitable. But the bigger concern is its falling sales in China. From a high of 1.62 million units in 2020, Honda’s numbers have dropped to around 640,000–645,345 units in 2025. That is a decline of more than 50 percent. It is also a 24.3 percent drop compared to 2024, making it the fifth straight year of falling sales.
Toyota’s China sales stood at 142,700 units in March 2026, down 8% YoY.
Toyota is also seeing similar pressure. Both Toyota and Honda reported lower sales in China in March compared to last year. Rising fuel prices and changing buyer preferences are pushing people away from petrol cars, which has traditionally been a strong area for Japanese brands.
Geely Xingyuan was China’s best-selling model in 2025.
What really stands out is the speed at which Chinese companies are working. Many of them can develop and launch a new car in under two years. For older global brands, this process usually takes twice as long. This gap is becoming a serious concern.Honda CEO Toshihiro Mibe recently visited China to understand this better. After seeing a supplier facility in Shanghai, he said, as quoted by Motor1, “We have no chance against this.” It was a direct reaction to how quickly Chinese firms are able to build and scale products.
Ford CEO Jim Farley has also sounded the alarm. In a recent interview, he said, as quoted by Motor1, “They have enough capacity in China with existing factories to serve the entire North American market, put us all out of business.” His statement points to the massive production scale Chinese companies have already achieved.Toyota has taken a similar stand. Koji Sato, speaking to suppliers, said, as quoted by Motor1, “Unless things change, we will not survive. I want everyone to acknowledge this sense of crisis.” Coming from the world’s largest carmaker, that is a serious warning.
In 2025, BYD led China’s NEV market, with Geely, Wuling and Tesla following close behind.
The concern is not just one company. Chinese brands like BYD are growing fast, thanks to quicker development cycles, strong supply chains and aggressive pricing. They are not only dominating their home market but are also expanding globally.
