(Yicai) July 6 -- Chinese automakers overtook their Japanese rivals in monthly new car registrations in Europe for the first time in May to take a 12 percent market share in a new milestone for the global automotive industry as it shifts to electric power.

Sales of the five largest Chinese automakers in Europe (the European Union, the European Free Trade Association, and the United Kingdom) -- namely SAIC Motor, Geely Group, Chery Automobile, and Leapmotor Technology -- surged 65 percent to a total of 138,410 vehicles in May from a year ago, according to a report by the European Automobile Manufacturers' Association.

Geely sold vehicles under the Geely, Emgrand, LEVC, Lotus, Lynk & Co, Polestar, Smart, Volvo Cars, and Zeekr brands, while Chery Auto sold them under the Chery, Jaecoo, Jetour, and Omoda brands.

Japan's top six carmakers in Europe -- Toyota Motor, Nissan Motor, Suzuki Motor, Mazda Motor, Honda Motor, and Mitsubishi Motors -- sold 130,424 vehicles in the same month, down 3.1 percent from a year earlier for a market share of 11.3 percent. Toyota's sales remained basically unchanged, while those of Nissan and Mitsubishi plunged 16 percent and 45 percent, respectively.

This shift reflects a structural divergence in the new energy vehicle race, as nearly all of the growth in Chinese automakers' sales came from battery and plug-in hybrid electric vehicle models, while Japanese peers have long focused on hybrid models and still lag in battery EVs, said Cui Dongshu, secretary-general of the China Passenger Car Association.

New car registrations in Europe rose 3.6 percent to 1.15 million units in May from a year earlier, according to the ACEA. Hybrid EVs remained the most popular powertrain choice among buyers, accounting for nearly 38 percent of the total, while battery EVs accounted for 20 percent of registrations. Plug-in hybrids captured 9.7 percent of the market. The share of petrol and diesel vehicles fell to 30 percent.

NEV subsidies in many countries and the EU’s countervailing tariffs on Chinese battery EVs encouraged Chinese producers to increase exports of plug-in hybrid models. Moreover, Chinese carmakers are also stepping up local manufacturing in Europe.

Leapmotor is working with Stellantis on a plant in Spain, Chery Auto is launching contract manufacturing and joint-venture production in Spain and the UK, BYD will start mass production at its assembly plant in Hungary in the next quarter, and Geely is expanding its footprint through Volvo's existing European production lines.

However, Cui cautioned that a single month's narrow lead does not guarantee China will hold the advantage for the rest of the year, as monthly figures remain vulnerable to swings from new product launches and tariff policies. With EU trade barriers continuing to rise, Chinese automakers need to keep strengthening their supply-chain advantages, with local plants and outbound supply chains being key to long-term breakthrough, he added.

Editor: Futura Costaglione