日本汽车制造商在日本Kei-car市场的主导地位会受到比亚迪的威胁吗

Asian Autos: Could Japanese automakers' dominance in Japan’sKei-car market be threatened by BYD? Since BYD announced its entry into Japan’s Kei-car market with its BEVs, many investorshave raised questions about BYD’s intentions and the potential impact on Japaneseautomakers. This report provides an overview of the Japanese Kei-car market and the current Masahiro Akita+81 3 6777 6998masahiro.akita@bernsteinsg.com Eunice Lee, CFA+852 2123 2606eunice.lee@bernsteinsg.com Overview of the Japanese Kei-car market:Kei-cars are a unique regulatory classthat has become a cornerstone of Japan’s auto market. While Japan's domestic vehicledemand has declined from its 1990s peak to below 5 million units, Kei-car volumes haveremained steady at around 1.7 million, boosting their market share to approximately40%. Although a wide variety of model segments are available today, super-height andheight wagons now constitute nearly 60% of Kei-car demand, reflecting consumers’ Tomohiro Kashimoto+81 3 6777 6975tomohiro.kashimoto@bernsteinsg.com Ethan Xu+852 2123 2634ethan.xu@bernsteinsg.com Japanese Kei-car BEV segment is still in its early stages:BEVs account for just~1.4% of Japan’s overall auto market and ~2.2% within Kei-cars. Only 4 Kei-car BEVs arecurrently available—the Nissan Sakura, MMC eK X EV, Honda N-VAN e:, and N-ONE e:,the latter offering the longest range at 295 km. Kei-car BEVs benefit from the nationalCEV subsidy (up to JPY 574k). However, even after subsidies, the average post-subsidyprice of current Kei-car BEVs remains higher than that of traditional ICE Kei-cars, reducing Could BYD become a threat to Japanese automakers like Suzuki?:Since its full-scale entry into the Japanese market in 2023, BYD currently offers 4 models in Japan.However, its sales have remained modest, with a market share below 0.1%, reflecting thechallenges that other non-Japanese automakers have long faced in the market. Meanwhile,BYD plans to launch its new Kei-car BEV Racco in 2026, and their strategy to enter theKei-car segment—which is known for its particularly high price sensitivity—is entirelyunderstandable. However, our current conclusion is that, as a base case, BYD’s entry intothe Kei-car market is unlikely to pose an immediate or significant threat to the dominanceof Japanese automakers like Suzuki. However, if BYD offers a substantially lower price thantraditional ICE Kei-cars, it could help the company strengthen its presence in the Japanese BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS We rateSuzuki Outperformwith a price target ofJPY 3,000. We rateToyota Outperformwith a price target ofJPY 3,800.We rateHonda Market-Performwith a price target ofJPY 1,400.We rateSubaru Underperformwith a price target ofJPY 2,250.We rateNissan Underperformwith a price target ofJPY 250.We rateMazda Underperformwith a price target ofJPY 800.We rateBYDOutperformwith price targets for1211.HK at HK$130.00and for002594.CH at RMB120.00. DETAILS COULD JAPANESE AUTOMAKERS' DOMINANCE IN JAPAN’S KEI-CAR MARKET BE THREATENED BY BYD? Since BYD announced its entry into Japan’s Kei-car market with its BEVs, many investors have raised questions about BYD’sintentions and the potential impact on Japanese automakers. This report provides an overview of the Japanese Kei-car marketand the current state of the Kei-car BEV segment, while also examining the possible impacts on Japanese automakers, including Japan's unique Kei-car standard The Kei-car standard in Japan refers to a category of small vehicles subject to specific restrictions on engine displacementand vehicle dimensions (Exhibit 1). Specifically, these cars must have an engine displacement of 660 cc or less, a length ofno more than 3.4 meters, a width within 1.48 meters, and a height up to 2.0 meters. This classification positions Kei-cars assmaller and more economical compared to regular passenger vehicles. Historically, the standard was established in 1949,initially limiting engine displacement to 250 cc, but it has since expanded to the current 660 cc limit. Due to their compactsize and fuel efficiency, Kei-cars are highly convenient for urban use, and they benefit from favorable tax treatments—such as The Kei-car market, originally centered around small passenger models such as compact sedans and hatchbacks, as well ascommercial models like trucks and vans—reflecting its roots in affordability and functionality—has evolved through gradualexpansions in engine displacement and dimension regulations, resulting in a wide variety of model segments available today(Exhibit 2, Exhibit 3). However, in recent years, the Japanese Kei-car market has offered a wide range of segment models— Introduction of a Kei-car standard in Europe? A notable development related to Japan’s Kei-car market is the European Commission’s initiative to introduce a new categoryof small, affordable vehicles called “E-cars,” inspired by Japan’s Kei-car standard. According to recent media reports, theEuropean Commissi