BEIJING/SHANGHAI >> Japanese automakers announced plans to introduce the latest Chinese technologies into their models at the Auto Shanghai motor show held in Shanghai, aiming to regain lost ground in China, where electric vehicles are rapidly becoming the norm.

On Wednesday, Toyota Motor Corp. announced its new “bZ7” EV will be equipped with an operating system from Chinese company Huawei. Toyota is developing the new model with an aim to launch it within a year. The automaker also unveiled a plan to appoint young Chinese people to chief engineer positions in charge of developing models for the Chinese market.

“To deliver cars people want in China, we need Chinese brains and hands involved in development,” said Li Hui, the general manager of Toyota China.

In China, new car sales by major Japanese automakers declined in 2024 from the previous year, with Toyota decreasing by 6.9%, Nissan Motor Co. by 12.2% and Honda Motor Co. by 30.9%.

According to the China Passenger Cars Association, the market share of Japanese automakers in China fell from 24.1% in 2020 to 13.7% in 2024.

There are several factors for the decline, including a delay in developing and launching such new energy vehicles (NEVs) as EVs and plug-in hybrid vehicles (PHVs) in China, where competition is intense among major automakers like BYD and startup companies. Additionally, Chinese people have moved toward spending less due to an economic downturn.

“It seems to me that Japanese automakers are not really serious about NEVs. Their vehicles lack innovation,” a 24-year-old self-employed man from Shanghai said while looking at Japanese vehicles on display.

In order to regain lost ground in China, the world’s largest car sales market, Toyota and other Japanese automakers are adopting strategies to utilize Chinese talent and technologies.

Honda announced it would adopt the artificial intelligence technology of Chinese tech startup DeepSeek to develop models for China, while it also unveiled a plan to codevelop driver assistance technology with another China-based startup company. They plan to develop technology capable of operating vehicles in heavily congested areas of Chinese cities, according to Honda.

Nissan announced it will make an additional research and development investment of 10 billion yuan (about 200 billion yen) in China by the end of 2026.

“We redefined our strategy for the Chinese market, where a major shift toward NEVs is taking place,” Isao Sekiguchi, managing director of Dongfeng Nissan Passenger Vehicle Co., Nissan’s joint venture in China, said to reporters, suggesting the company will speed up efforts to develop new models in China.

PHVs may be the key to success.

In 2024, new PHV sales including exports increased by 83% from the previous year to 5.14 million units, according to the China Association of Automobile Manufacturers.

The rate of increase exceeded that of EVs at 15%, while 7.71 million EVs were sold in 2024.

EVs are now mainstream in urban areas in China, while people in regional areas apparently prefer PHVs because they use both gasoline and electricity and pose less concern about travel range. Nissan will launch its first PHV pickup truck “Frontier Pro” before the end of this year. Mazda Motor Corp. announced that its new model “EZ-60” will be available in both EV and PHV models.

“China is the world’s most advanced electrification and smartization market. It is important to focus on partnering with Chinese companies in order to respond to market demand,” a senior official at a Japanese automaker said.