Has China dethroned Japan, which had held the top spot in car sales for 20 years, in 2026?

At the beginning of 2026, the global automotive industry reached an epoch - making turning point.

According to an authoritative forecast released by Nikkei on December 30, 2025, Chinese automakers' annual global sales will reach 27 million vehicles, surpassing Japanese automakers, who have long topped the list, for the first time (with an estimated sales volume slightly less than 25 million vehicles), and officially claiming the top spot in global new - vehicle sales. This news not only shocked the global automotive industry but also signaled that the era of traditional fuel - powered vehicles dominated by Japan is accelerating towards its end, while a new era of new - energy and intelligent vehicles led by China has begun.

From the early 2000s when Japanese brands such as Toyota, Honda, and Nissan expanded globally, to now when Chinese automakers like BYD, Geely, and GAC are thriving overseas, the change of the "throne" may be an inevitable industrial revolution.

It is a concentrated manifestation of China's systematic advantages in three dimensions: the new - energy transformation, the globalization strategy, and the integration of the industrial chain. It is also an inevitable result of the convergence of three major trends: the eastward shift of the global manufacturing center, the transformation of technological paradigms, and the upgrading of Chinese manufacturing.

The End of Japan's Dominance and China's Quiet Rise

Since the 1990s, Japan has maintained its position as the world's largest automobile producer and seller for more than two decades, thanks to its advantages in lean production, high reliability, and fuel economy. After the 2008 financial crisis, Japanese automakers even came close to the annual sales peak of 30 million vehicles. At that time, the Chinese automotive industry was still in the initial stage of "trading the market for technology," with negligible export volume, let alone challenging the global leading position.

However, the turning point came in the 2020s. As the global goal of carbon neutrality accelerated, electrification became an irreversible trend. China keenly grasped this historical opportunity and was the first to elevate new - energy vehicles to a national strategy. In 2023, China surpassed Germany and Japan for the first time to become the world's largest automobile exporter, with the annual export volume exceeding 5 million vehicles. This was a sign of the changing landscape.

In 2025, the changes were even more rapid. Data shows that the annual sales of Chinese automobiles increased by 17% year - on - year, reaching 27 million vehicles, while the sales of Japanese automakers remained basically flat, maintaining at around 25 million vehicles. In just three years, from a significant lag to a comprehensive overtaking, this "overtaking on a bend" speed is extremely rare in global industrial history, and it is the result of the full release of structural advantages.

China's greatest disruption to the global automotive industry lies in its absolute leadership in the electrification race.

As early as 2015, "Made in China 2025" clearly proposed new - energy vehicles as a key development direction. In the following decade, through a combination of subsidy policies, infrastructure construction, and investment in technological R & D, China built the world's most complete new - energy vehicle ecosystem. By 2024, the annual production and sales of new - energy vehicles in China had exceeded 12 million vehicles, accounting for more than 60% of the global total. Core technologies such as power batteries, electric drive systems, and intelligent cockpits have achieved a leap from "following" to "leading."

Take BYD as an example. This company, which started with batteries, has now become a global benchmark for new - energy vehicles.

In the first half of 2025, its overseas sales reached 470,000 vehicles, a year - on - year increase of more than 130%. It not only achieved great success in the markets of Southeast Asia, the Middle East, and Latin America but also strongly penetrated into the heart of Europe - surpassing Tesla in its traditional strongholds such as Italy and Spain. Behind this is the strong support of independent technologies such as blade batteries, the e - platform 3.0, and the Yunliang chassis.

In contrast, Japan's electrification transformation has clearly lagged behind. Although giants like Toyota and Honda have deep accumulations in hybrid technology (HEV), they have been hesitant in the layout of battery - electric vehicles (BEV). In November 2025, Toyota's global EV sales decreased by 3.4% year - on - year, and its EV sales in the Chinese market even dropped by 7.5%. This "fuel dependence" has caused it to gradually lose speed in the global electrification wave. As an industry analyst said, "While Japan is still debating whether to build electric vehicles, China has installed charging piles in Africa."

The Dimensionality - Reduction Strike of the Systematized Industrial Chain

If the success of new - energy vehicles is a victory of "product strength," then the globalization of Chinese automakers is a leap of "model strength."

In the past, Japanese automakers dominated the global market with the "complete - vehicle export + local dealer" model. However, this model has shown signs of fatigue in today's context of high trade barriers and complex geopolitics. Chinese automakers, on the other hand, have adopted a "full - chain going - global" strategy, simultaneously exporting R & D, manufacturing, sales, services, and even the energy ecosystem to form in - depth localized operations.

BYD is a model of this strategy. Its first overseas passenger - vehicle factory in Rayong, Thailand, was put into operation in 2024, with an annual production capacity of 150,000 vehicles. In Brazil, BYD took over an old Ford factory and transformed it into a new - energy base, with a planned production capacity of 150,000 vehicles. In Hungary, a factory with an investment of 1 billion euros will be put into operation by the end of 2025, covering 12 new - energy models and directly targeting the EU market. This "local production for local sales" model not only avoids high tariffs (such as the 10% - 27% tariff imposed by the EU on imported electric vehicles) but also creates local jobs and wins government support.

GAC Group has also been very active. It is building a smart factory in Indonesia to create a right - hand - drive vehicle production base and has opened a flagship experience center in Bangkok, while simultaneously deploying a charging and battery - swapping network to form an integrated ecosystem of "vehicle + charging pile + service." This "both - hard - and - soft" going - global approach is far more sustainable and risk - resistant than simply selling cars.

In contrast, Japanese automakers still mainly rely on exports. Their overseas production bases are mostly concentrated in North America and Southeast Asia, mainly producing fuel - powered or hybrid vehicles. They lack local production capacity support in key new - energy markets such as Europe and are struggling to meet the increasingly strict carbon - emission regulations and localization requirements.

China's rapid scale expansion and technological iteration are inseparable from its unparalleled advantages in the automotive industrial chain.

From the upstream processing of lithium, cobalt, and nickel resources, to the globally leading power - battery enterprises such as CATL and BYD Fudi Battery in the middle stream, to the downstream vehicle manufacturing and intelligent connected systems, China has built the world's most complete, efficient, and resilient new - energy vehicle industrial chain. According to data from the Ministry of Industry and Information Technology, China has more than 70% of the global power - battery production capacity, 80% of the photovoltaic - module production capacity, and more than 90% of the supply capacity of rare - earth permanent - magnet materials - these are the core elements of electrification and intelligence.

More importantly, China adheres to open cooperation, attracting global top - tier auto - parts suppliers such as Bosch, ZF, and Continental Group to set up factories in China, forming an industrial ecosystem with a "domestic + international" dual - cycle. This cluster effect has greatly reduced innovation costs and supply - chain risks. For example, it only takes 30 days for a BYD Seal to be delivered after an order is placed, while European models with the same configuration often take 3 - 6 months.

An expert from the Beijing Academy of Social Sciences pointed out, "China wins not by a single enterprise but by the coordinated combat ability of the entire national manufacturing system." This "systematic competitiveness" is difficult for traditional automotive powers such as Japan and Germany to replicate.

Beyond Sales: The Shift of Rules and Discourse Power

China's automotive industry claiming the top spot in global sales is far more than just a number.

First of all, for consumers, it means more choices of high - cost - performance and highly intelligent models. The mainstream market in the range of 100,000 - 200,000 yuan, which was previously monopolized by German and Japanese brands, is now being rapidly occupied by Chinese brands such as BYD Song PLUS, Geely Galaxy, and Changan Deepal. In the overseas market, Chinese electric vehicles are generally 20% - 30% cheaper than their European and American counterparts in the same class but are equipped with advanced functions such as L2 - level assisted driving, fast charging, and intelligent cockpits, greatly enhancing user value.

Secondly, for the global industrial landscape, technological standards and supply - chain dominance are shifting towards China. Chinese - led fast - charging standards (such as ChaoJi), battery - safety regulations, and vehicle - networking protocols are gradually becoming international references. Enterprises such as CATL and Guoxuan High - tech have deeply bound with giants like BMW, Volkswagen, and Stellantis and have become their core battery suppliers.

A more far - reaching impact is that it marks a substantial leap from "Made in China" to "Intelligently Made in China." As the pearl on the crown of the manufacturing industry, the establishment of China's global leadership in the automotive industry will greatly boost China's overall image in the fields of high - end manufacturing, green technology, and the digital economy.

Of course, for Chinese automakers to firmly hold the global top position, they still face severe challenges. One is the rising trade protectionism in Europe and the United States. The second is that it still takes time to upgrade the brand to the high - end level. Although brands such as NIO, XPeng, and HiPhi have entered the European market, there is still a gap in brand premium compared with BBA and Tesla. The third is the intensifying technological competition. The next - generation technologies such as solid - state batteries, autonomous driving, and vehicle - infrastructure cooperation have not been finalized yet, and China, the United States, Europe, Japan, and South Korea are all making all - out efforts.

However, the response strategies of Chinese automakers are clear: continue to deepen local production, increase R & D investment, and promote the internationalization of standards. GAC Group officially entered the UK market in 2025 and made an appearance at the Munich Auto Show, which is a microcosm of its simultaneous pursuit of high - end and globalization.

China's automotive sales topping the global list in 2025 is a silent revolution driven by national strategies, enterprise innovation, and the industrial ecosystem. It ended Japan's more than two - decade - long hegemony and announced the arrival of a new automotive civilization characterized by electrification, intelligence, and globalization.

In this transformation, China did not follow the old path of "copying the West." Instead, it took new - energy vehicles as a breakthrough, the entire industrial chain as a foundation, and systematic going - global as a path, paving an industrial - upgrading path with Chinese characteristics. As Nikkei sighed, "This is not just a simple sales surpassing but a reshuffle of the global industrial power structure."

In the future, when people look back at 2025, they may regard it as a key node in the eastward shift of the global manufacturing center in the 21st century. And Chinese automobiles are the most dazzling flag - bearers in this great change.

This article is from the WeChat official account "BT Finance Data Connect," author: Yuan Fang, published by 36Kr with authorization.