Chinese car brands overtake Japanese in Europe for the first time: what it means for Nepal

For the first time, Chinese car brands have outsold Japanese brands in Europe over a full quarter. According to market researcher Dataforce, Chinese brands took 12.7% of new-car registrations in the July–September 2026 quarter, against 11.9% for Japanese makers such as Toyota, Nissan and Honda.

Five years ago, Chinese brands had barely 1% of European sales. Now BYD, Chery (with its Omoda and Jaecoo brands), SAIC's MG, Geely and Leapmotor sell more cars there than the Japanese brands. Japan's automakers spent decades building their position in Europe: Toyota has sold cars there since 1963, and Nissan has built cars in Sunderland, UK, since 1986.

What exactly happened?

The figures come from Dataforce, a market research firm that tracks new-car registrations across the European Union, the EFTA countries (such as Norway and Switzerland) and the UK. Bloomberg reported that Chinese-branded registrations roughly doubled from a year earlier, led by hybrids. Over the quarter, Chinese brands together passed the combined share of all Japanese brands.

It did not happen overnight. In May 2026, data from the European Automobile Manufacturers' Association already showed Chinese brands ahead of Japanese brands for a single month:

May was the first month. July–September is the first full quarter, which makes it much harder to dismiss as a one-off.

Chinese brands12.7 %

Japanese brands11.9 %

Share of Europe's new-car market, Jul–Sep 2026 (%)

Chinese brands	12.7 %
Japanese brands	11.9 %

Source: Dataforce, reported by Bloomberg, October 2026

Which Chinese cars are selling in Europe?

• Chery (Omoda and Jaecoo): the Jaecoo 7 SUV was the UK's best-selling model in March and again in September 2026.
• BYD: showed the Dolphin G DM-i, a compact plug-in hybrid developed for Europe, at the Paris motor show. It is building a factory in Hungary.
• Leapmotor: has started building its B10 SUV at Stellantis' plant in Zaragoza, Spain, through a joint venture.
• Chery is also preparing production in Barcelona.
• Geely's Zeekr was also on show in Paris.

Building cars in Europe matters, because cars made there are not hit by the EU's import tariffs on China-made cars.

Why are Chinese brands winning in Europe?

Four reasons come up again and again in the reports:

1. Hybrids, not only EVs. The EU has added extra tariffs on battery-electric cars made in China. Chinese brands have answered by selling far more hybrids and plug-in hybrids; Bloomberg says the latest growth was "led by hybrids".
2. Price and technology. Japanese newspaper Nikkei pointed to competitive pricing, rapid advances in EV technology and deeper localisation as the reasons Chinese makers kept growing despite the tariffs.
3. Pressure at home. Demand in China is shrinking and competition there is fierce, which is pushing BYD and others to look for new markets.
4. Fuel prices. With fuel prices at record highs, Bloomberg expects demand for Chinese electric and plug-in models to keep growing.

Europe is now pushing back. This month the EU agreed in principle to curb the fast-growing imports of Chinese hybrids. It is also considering rules that favour locally made cars for subsidies and some company-car tax benefits. That is one reason Chinese brands are racing to open factories in Hungary and Spain.

What does this mean for Nepal?

Nepal went through the same shift earlier, at least for electric cars. Most of the EVs on Nepali roads and in our price lists come from Chinese brands, and many of the same names that are now winning in Europe are already sold here.

Prices from the official distributor sites in our catalogue, checked October 2026.

The difference is that Nepal is still mostly an EV story for Chinese brands, while Japanese brands remain strong in petrol, hybrid and diesel cars. Suzuki's small petrol cars, Toyota's hybrids and pickups and Nissan's Magnite are examples. In Europe, Chinese brands are now winning with hybrids too. If more Chinese plug-in hybrids reach Nepal at competitive prices, the same contest could come to the petrol and hybrid segments here.

Should Nepali buyers choose Chinese or Japanese?

Europe's numbers show that Chinese cars have earned buyers' trust in a demanding market. That still does not settle the choice for you. Before you buy any car in Nepal, from any brand, check:

• After-sales service: how many service centres the distributor has outside Kathmandu, and how quickly parts arrive.
• Warranty: especially the battery warranty for EVs and plug-in hybrids, in years and kilometres, written on the invoice. Our EV battery warranty guide explains what to look for.
• Resale value: Japanese brands have a long track record in Nepal's used-car market; for newer Chinese brands that record is still being built.
• Running costs: compare fuel or electricity, servicing and insurance over five years with our EV vs petrol cost guide.

Want to see a Chinese and a Japanese car side by side? Use our compare tool, or read our guide to Chinese EV brands in Nepal.