Implications of Japanese OEM New Auto Sales in China (June 2026) for Auto Parts Industry

Research evidence excerpt

Implications of Japanese OEM New Auto Sales in China (June 2026) for Auto Parts Industry

Update

July 12, 2026 11:35 PM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MAuto Parts | Japan Shinji Kakiuchi

Equity Analyst

Implications of Japanese OEM Shinji.Kakiuchi@morganstanleymufg.comHayato Takashima +81 3 6836-5416

Hayato.Takashima@morganstanleymufg.com +81 3 6836-5414

New Auto Sales in China (June

2026) for Auto Parts Industry

Key Takeaways Auto Parts

Japan

China new vehicle sales by Japanese OEMs in June 2026 were -27% for Toyota, - Industry View In-Line

44% for Honda, and -30% for Nissan. Implications for auto parts suppliers are

somewhat negative.

For the Apr–Jun period as a whole, sales were -27%, -47%, and -32%, respectively.

While 1Q earnings at parts suppliers may benefit from positives such as yen

weakness, China operations are likely to deteriorate more than was expected.

Parts suppliers are taking steps such as reorganizing/consolidating production

sites, optimizing workforces, and booking equipment impairment, but some

companies will likely need to undertake further structural reforms.

With Japanese OEMs increasing their use of parts made by local Chinese

suppliers, and indicating moves toward benchmarking using Chinese parts, we

continue to think that intensifying competition is an issue for Japanese auto parts

companies.

We think Japanese auto parts suppliers will need to respond through measures

such as sourcing and utilizing locally procured Chinese materials, localizing

development and improving development speed, and forming partnerships with

Chinese companies.

Japan’s three major automobile OEMs had all announced June 2026 sales volumes

for new cars in China by July 10. The figure for Toyota was 115k units (-27% YoY),