Chinese brands outsell Japanese rivals in Europe over a full quarter for the first time

Chinese car companies have overtaken Japanese companies in the European car market for the first time. Chinese brands beat their Japanese competitors in share of sales across a full quarter. The automobile industry is seeing big changes, and rising demand for electric cars is helping Chinese companies expand rapidly in international markets. The competition in car markets worldwide is likely to intensify further.

According to market research firm Dataforce, Chinese brands accounted for 12.7% of all new car registrations in Europe in September 2026. Japanese companies had 11.9%. Registrations of Chinese brands have nearly doubled compared with last year.

Chinese carmakers have for some years been trying to strengthen their hold in Europe. BYD, MG, Omoda, Jaecoo and other Chinese brands are launching a range of models to win over European customers. With electric cars, plug-in hybrids and petrol cars, they are targeting different kinds of buyers.

The reasons cited for the gain include competitive prices, new technology, good design and an emphasis on features. China has built large production capacity, especially in electric vehicles. As a result, many Chinese companies are able to develop new models in a short time and launch them in international markets.

Japanese companies such as Toyota, Nissan, Honda and Suzuki, meanwhile, have held their place in Europe for several decades. Reliability, good fuel efficiency and after-sales service are considered their strengths. But the challenge from Chinese brands is now forcing them to change their strategy. Chinese companies are growing aggressively in the electric and plug-in hybrid segments. European customers are getting cars with more features at competitive prices, so their attention is turning to these brands.

Rising demand for hybrid cars is also a major reason for the success of Chinese companies. In addition, because of competition at home in China and sluggish demand there, companies such as BYD and Chery are focusing more on overseas markets. Preparations are also under way for local production in Europe. Chery is preparing to start production in Barcelona, while BYD is close to completing work on its production plant in Hungary.

The growing popularity of Chinese companies is a challenge not only for Japanese companies but also for European firms such as Volkswagen, Renault and BMW. For this reason, the European Union is considering duties on imports of Chinese vehicles and rules that encourage local production. Competition in Europe's car market over price, technology and local production could grow further.

Overall, Chinese companies overtaking their Japanese rivals is a major shift in the automobile sector. European brands still remain dominant, so the world will be watching how this contest develops.