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China’s FAW to sell $100,000 electric SUV in Japan

  • December 18, 2021
  • , Nikkei Asia , 1:43 a.m.
  • English Press

YUKIHIRO OMOTO and KOSEI FUKAO, Nikkei staff writers


TOKYO/FRANKFURT, Germany — China FAW Group is targeting Japan’s market for electric cars, Nikkei has learned, as the state-owned company gears up to sell its high-end electric SUV in the country next year.


The automaker initially plans to roll out a hybrid version of the sport utility vehicle in Japan under its luxury Hongqi brand, with the electric model set to follow next summer.


Chinese players look to reproduce the success that Japanese and South Korean brands achieved in overseas markets with their combination of low prices and high fuel efficiency — only with EVs.


While Japan has a smaller market than Europe, where Chinese EV brands are gaining ground, Japanese automakers’ have not moved quickly enough to meet local demand, creating an opening for rivals.


FAW’s electric SUV, expected to cost at least 11 million yen ($96,700) excluding tax, offers a single-charge cruising range of up to 690 km. It is a flagship model that is also being exported to Europe.


The car will be exported from a factory in China, with the body modified to comply with Japanese charging standards.


FAW is also considering selling a new luxury EV in Japan after the launch of the SUV.


The Chinese automaker will set up its first dealership in front of JR Namba Station in Osaka City. It is also considering opening a store in Tokyo in 2022, before expanding to other cities. Until now, it has exported only a few gasoline-powered vehicles to Japan.


Meanwhile, Chinese rival BYD recently started selling electric vehicles in Japan with its five-seater midsized sedans. It is initially selling the cars to companies and local governments. The vehicle costs 3.85 million yen, but a government EV subsidy knocks off about 400,000 yen. The Chinese car group is considering starting a new division in Japan and establishing sales agents in major cities.


Chinese companies already sell some electric vehicles for commercial use in Japan’s market. Big Japanese logistics groups such as Sagawa Express and SBS Holdings have decided to import commercial EVs from China as they push to cut greenhouse gas emissions during delivery.


Chinese manufacturers have an extensive lineup, as EVs are promoted by the government. China started by exporting buses and trucks, and this year, FAW and BYD began to export passenger cars to Europe, whose EV market is taking off faster than other regions.


In the U.K., Shanghai-based SAIC Motor is gaining momentum with British brand MG. (Photo courtesy of MG Motor Europe)

In the U.K., Shanghai-based SAIC Motor is gaining momentum with British brand MG, which it acquired in 2007. In November, MG scored a 3.6% market share in all new vehicles, electrified or otherwise, closing in on Nissan Motor and Ford Motor.


MG’s share in the country for the current year through November stood at 1.9%, surpassing that of Honda Motor and Mazda Motor. MG’s vehicle sales during that period jumped 73% on the year.


MG introduced in November the Chinese-made ZS EV, whose driving range of 440 km outstrips the previous model by 70%. The price before subsidies hovers around 35,000 euros ($39,590), making it more affordable than similar cars by European rivals Volkswagen and Peugeot.


Since making a full-fledged entry into the European market in 2019, the SAIC group has built a sales network spanning roughly 400 locations in 16 countries.


The only Chinese brands with a notable presence on European roads are MG and Zhejiang Geely Group Holding’s Polestar. But newer EV producers like NIO look to make inroads. The New York-listed startup opened a showroom in Norway in October.


Chinese automakers see Europe’s embrace of electric vehicles as an opportunity. Germany offers 9,000 euros in subsidies for EV purchases. Concerns over climate change also are influencing car buyers’ choices. During the third quarter, EVs accounted for 13% of all new-vehicle sales in 18 key European markets.


According to research firm MarkLines, the total number of EVs sold in 17 Western European countries was about 900,000 from January to October this year. Of these, several thousand were made by Chinese manufacturers.


Chinese automakers lost out in the European gasoline vehicle market due to their poor image in safety and quality, but Chinese-made EVs are improving in performance. The European New Car Assessment Program granted vehicles made by MG and NIO safety ratings of five out of five stars

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