China’s new energy vehicle maker BYD plans to expand its sales network in Japan by opening smaller, simplified dealerships, as it prepares to launch the Racco mini electric vehicle tailored for the local kei car market.
BYD aims to accelerate network growth by establishing “mini dealerships” that display only one or two models, according to a report by Nikkei Asia on Monday. The outlets are expected to be located in regional cities with populations below 500,000, allowing faster setup and lower operating costs.
“We intend to cover small, regional commercial areas in order to sell mini EVs,” Atsuki Tofukuji, president of BYD Auto Japan, was quoted as saying. Each location will showcase a limited number of vehicles and focus on rapid market entry rather than large-scale brand presentation.
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The approach contrasts with traditional automotive dealerships, which are typically designed as large showrooms highlighting a full model lineup. BYD’s strategy reflects its focus on the Racco, a compact electric vehicle developed specifically for Japan and scheduled to launch in summer 2026.
Mini vehicles, known as kei cars, account for about 40% of new vehicle sales in Japan and are particularly popular in rural areas, according to Nikkei Asia. These cars are designed for narrow roads and efficiency, typically measuring under 3.4 meters in length and 1.48 meters in width, with engines limited to 64 horsepower. They also benefit from lower purchase taxes and other incentives, making them attractive as second vehicles for households.
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BYD unveiled the Racco at the Japan Mobility Show in October 2025, marking its second model designed specifically for overseas markets after the Shark hybrid pickup. The Japanese kei car segment already includes electric models such as the Nissan Sakura, which starts at around 2.6 million yen ($16,600).
BYD entered Japan’s passenger vehicle market in 2022 and began selling its first model, the Atto 3 electric SUV, in early 2023. The company had initially aimed to operate 100 sales outlets in Japan by the end of 2025, but faced delays due to challenges including securing suitable retail locations.
As of the end of 2025, BYD operated or planned a total of 69 outlets across 38 of Japan’s 47 prefectures, the Nikkei Asia report said.