Japanese autos try to reclaim import prominence through hybrids after losing ground to Tesla
Published: 29 Jan. 2026, 11:36
Updated: 29 Jan. 2026, 11:37
Audio report: written by reporters, read by AI
![The Lexus ES300h [TOYOTA KOREA]](https://koreajoongangdaily.joins.com/data/photo/2026/01/29/dd5b0129-9a34-40fc-83bf-d9b14fb52701.jpg)
The Lexus ES300h [TOYOTA KOREA]
Japanese automakers are steadily losing their once-dominant grip on Korea’s imported car market. Their long reliance on hybrids, thin electric-vehicle lineups and lingering consumer resentment from a past boycott have left them squeezed by both Korean premium brands and Tesla. A renewed global shift toward hybrids, however, could offer Toyota and Lexus a narrow opening in 2026.
A 42-year-old office worker surnamed Han recently traded in his Nissan Altima, a midsize sedan, for a Tesla. He had chosen a Japanese car for its reliability and value for money compared to Korean rivals, but decided on Tesla as the lineup of both Korean and imported models has expanded.
Han’s decision was also shaped by an earlier incident during the boycott of Japanese products, when someone punctured his tires in an act of vandalism. Nissan has since exited the Korean market. “I wanted to try an electric vehicle, but among Japanese brands there was practically no EV option — that was decisive,” Han said.
Japanese cars, once so popular in Seoul’s affluent Gangnam district that they earned the nickname “Gangnam Sonata,” have steadily lost ground. According to the Korea Automobile Importers and Distributors Association, Japanese brands accounted for 8.66 percent of newly-registered imported passenger cars in 2025. That was down from 9.95 percent a year earlier.
Compared to 2008 — the height of Japan’s auto import boom in Korea, when its share stood at 35.54 percent — the figure has shrunk to about one-quarter. Back then, Japanese brands ranked second after Germany among imports. However, by 2025, they were trailing not only German brands but also U.S. brands, led by Tesla.
In unit terms, Japanese brands sold 26,606 vehicles in 2025, up 1.6 percent from 2024, helped by strong sales of Lexus’ ES 300h hybrid sedan. But their market share has slipped as rival countries’ brands have quickly grown: Germany was up 3.9 percent, the United States 67.4 percent, Sweden 12.7 percent and Britain 9 percent. Overall imported passenger-car sales rose 16.7 percent in 2025.
The reasons are complex. One factor is that Japanese automakers, long-focused on hybrids, missed the timing of the market shift to full electrification, limiting consumer choice. Japanese battery-electric vehicles sold 68 units in Korea in 2024, but recorded zero sales in 2025. Hybrids, meanwhile, made up 97 percent of Japanese-brand sales.
![The 2026 Alphard Hybrid Premium minivan [TOYOTA KOREA]](https://koreajoongangdaily.joins.com/data/photo/2026/01/29/899f8032-aed3-4dae-a262-afce29ed771e.jpg)
The 2026 Alphard Hybrid Premium minivan [TOYOTA KOREA]
“Amid the push for environmentally friendly vehicles, Japan neglected EV production and development,” said Lee Ho-geun, an automotive engineering professor at Daedeok University. “Meanwhile, Korean premium brands such as Genesis have replaced demand that once went to Japanese cars, and Tesla has been aggressively expanding its sales efforts in the imported car market, further narrowing Japan’s foothold.”
Lingering fallout from the 2019 boycott of Japanese products during the Moon Jae-in administration has also weighed on sentiment. Japanese brands’ market share was 14.98 percent in 2019, but was nearly cut in half to 7.48 percent in 2020 right after the boycott began. It fell further to 5.99 percent in 2022, then recovered slightly on the back of Lexus — but has yet to climb back above 10 percent.
An industry official said consumer trust was also hurt by the way some brands — including Subaru, Mitsubishi and Nissan — opted to pull out quickly rather than step up marketing or investment when sales faltered.
Still, some see opportunity as hybrids regain traction while demand for EVs slows. In 2025, one out of every three new cars sold in Korea was a hybrid.
Toyota Korea is expanding its lineup, officially launching the 2026 Alphard Hybrid Premium family minivan in the local market.
“With the EV demand slowdown dragging on, mild hybrids — which use an electric motor only to assist the engine and cannot run on electric power alone — tend to be less competitive on fuel economy, especially in Europe and the United States,” said automotive engineering Professor Kim Pil-soo of Daelim University College. “That clearly creates an opening for Toyota.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NA SANG-HYEON [[email protected]]
with the Korea JoongAng Daily
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