BYD plans a network of mini EV dealerships to promote its Racco electric kei car in Japan

The Chinese New Energy Vehicle (Nev) maker is adopting an unconventional strategy to expand its Japanese sales by opening mini dealerships showcasing only one or two models to promote of its Racco electric K-car designed specifically for the local market 

BYD unveiled the Racco at Japan Mobility Show, which opened on October, 25

BYD is adopting an unconventional strategy to strengthen its position in Japan. The Chinese New Energy Vehicle (NEV) maker plans to launch a network of mini-dealerships in smaller cities ahead of the rollout of its Racco electric kei car, according to a report by Nikkei Asia on February 9. These outlets will be located in towns with populations of up to 500,000 people. 

"We intend to cover small, regional commercial areas in order to sell mini EVs," said Atsuki Tofukuji, president of BYD Auto Japan, according to the report. Each showroom will display only one or two vehicles and open as quickly as possible—a stark contrast to traditional large-scale showrooms. 

This move makes sense because kei cars account for about 40% of all new vehicle sales in Japan, particularly in rural and suburban areas. Automotive dealerships are typically large-scale to fully showcase a brand's unique identity. 

BYD is adopting the opposite strategy as its Racco mini EV, developed specifically for the Japanese market, launches this summer. The mini dealerships will focus on promoting the Racco. These new outlets offer greater flexibility in site selection, and require shorter setup periods. Their primary goal is to quickly address gaps in sales network coverage. 

BYD Racco is equipped with four doors including rear sliding door

By the end of 2025, BYD had 69 dealerships in Japan, including planned openings, covering 38 prefectures. The total number of outlets is already more than double that of Tesla in the country. However, this figure still falls short of BYD’s previously stated target of 100 dealerships, largely due to difficulties in securing suitable properties. As the Racco launch approaches, BYD Japan’s management has noticeably accelerated the pace of store expansion. 

In addition to directly operated dealerships, BYD is also experimenting with diversified sales channels. In October 2025, the company partnered with Japanese retail giant Aeon to set up shop-in-shop sales points at around 30 commercial facilities. From a sales perspective, BYD’s growth in Japan remains challenging. 

In 2025, the company sold 3,731 battery electric passenger vehicles in Japan, excluding commercial vehicles, up 68% year on year. BYD ranked fifth among EV brands, but overall volumes remained modest. By comparison, Tesla sold about 10,600 vehicles in Japan in 2025, representing roughly 90% YoY growth and marking the first time its annual sales exceeded 10,000 units in the country. 

Tofukuji said BYD has set an annual sales target of 10,000 vehicles as a near-term milestone, implying that sales would need to increase by more than 6,000 units from 2025 levels following the launch of the Racco. 

BYD Racco targets Japan's urban market with compact design and 180km range

BYD unveiled the Racco at the Japan Mobility Show on October 29, 2025, announcing plans to launch the mini EV in Japan during summer 2026. The Racco marks BYD's second model tailored for overseas markets following the Shark hybrid pickup. K-Cars are compact vehicles unique to the Japanese market, designed to navigate narrow roads and conserve resources. 

Typically under 3.4 meters long and less than 1.48 meters wide, these models cap at 64 horsepower. They benefit from policy incentives including lower purchase taxes, making them a popular second car choice for urban families. The Japanese K‑Car market is dominated by domestic brands. Suzuki holds roughly 38%, Daihatsu 22%, and Honda 19%. Other foreign automakers have had minimal success. 

The Honda N-Box continues to lead as Japan’s top-selling K-car in 2025, followed by the Suzuki Spacia, Daihatsu Move, Daihatsu Tanto, and Suzuki Hustler. To compete, BYD had to engineer the Racco from scratch to meet Japan’s strict kei‑car regulations on size, power, and passenger capacity. 

There is also a strong strategic rationale: Suzuki has publicly flagged BYD as a significant threat in the K‑Car space, underscoring BYD’s seriousness in this segment. 

Suzuki Motor’s president, Toshihiro Suzuki, acknowledged BYD’s entry as a significant development in Japan’s light vehicle sector. “There are many small car standards around the world, and BYD chose Japan’s K-Car standard. I’m pleased about that,” Suzuki said, adding that “new competition is beginning” and that he hopes both sides can “learn from each other and move forward.” 

In response, Liu Xueliang, General Manager of BYD Asia-Pacific Auto Sales, told Chinese media that BYD’s strategy in Japan does not focus on direct competition with domestic brands. “We are not coming to compete with Japanese carmakers,” Liu said. “Our goal is to offer Japanese consumers more choices so they can freely decide which car or brand they prefer.” 

The Racco is second BYD's model tailored for overseas market following the Shark hybrid pickup

The BYD Racco adopts the traditional Japanese kei car square and four corner exterior design, and is equipped with four doors including rear sliding door. Dimensionally, the BYD Racco measures 3395/1475/1800 mm (l/w/h), and can seat four people as the standard. 

Power will come from a front electric motor, paired with a 20 kWh Blade (LFP) battery pack, providing a WLTC range of 180 km. 100 kW DC fast-charging will also be supported. The Racco’s starting price is expected to be around 2.6 million yen ($17,000). 

It will compete with leading Japanese kei EVs such as the Honda N-Box, Suzuki Spacia, and Nissan Sakura. For comparison, the Nissan Sakura starts at 2.54 million yen (around $16,710) and also offers a 20 kWh battery with a similar driving range.