BYD's 'kei' EV plans ring alarm bells for Japan's car industry

Even if it won't go on sale until the end of next year, BYD's Japanese mini-car has already produced buzz - at least among officials in Tokyo worried about the challenge from China's biggest automaker.

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The company plans to debut its all-electric "kei" car - a class of pint-sized, affordable vehicles smaller than a two-door Mini Cooper - at the Japan Mobility Show that opens to the public.

The move will make BYD a rare foreign entrant in the "kei jidosha," which translates as "light vehicle," segment, which accounts for about a third of Japan's auto sales and, for decades, has been the almost exclusive turf of domestic players like Honda and Suzuki.

BYD has sold just 6,600 of its standard-sized electric vehicles since entering the Japanese auto market nearly three years ago, Atsuki Tofukuji, who heads the company's passenger car sales business in Japan, told Reuters in an interview.

"In terms of our initial expectations, our sales in Japan are missing a zero," Tofukuji said.

Foreign automakers had just a 6% share of the 3.7 million new passenger cars sold in Japan last year.

But some Japanese government officials and industry insiders say BYD could pose a threat with an electric kei car, as consumers are particularly cost-conscious and there are few ultra-compact EVs. Electric cars are eligible for subsidies and tax breaks in Japan.

In Japan for long haul By designing a car specifically for the world's fourthlargest auto market, BYD appears to be in Japan for the long haul and determined to win over the country's famously picky consumers.

The effort comes as Chinese automakers scramble to boost overseas sales amid a brutal price war at home, taking market share from Japanese automakers in Southeast Asia.