BYD Bets on Mini Dealerships to Push Racco Kei EV in Japan

BYD is reworking its Japan strategy with a sharp focus on localisation. Ahead of the summer launch of its Racco kei electric vehicle, the Chinese automaker plans to roll out compact “mini dealerships” across smaller Japanese cities, aiming to strengthen its footprint where kei cars matter most.

ArrayAccording to reports, these outlets will come up in towns with populations under 500,000 and will showcase just one or two BYD models. Instead of large, brand-heavy showrooms, BYD wants these spaces embedded in neighbourhood malls and local commercial areas. The idea, as explained by BYD Auto Japan President Atsuki Tofukuji, is simple: feel local, not distant.

The star of this strategy is the BYD Racco, unveiled at the Japan Mobility Show in October 2025. Designed specifically for Japan’s kei car regulations, the Racco measures under 3.4 metres in length, less than 1.48 metres in width, and is capped at 64 hp. Kei cars enjoy tax benefits in Japan and make up nearly 40 percent of new vehicle sales, with especially strong demand in rural regions—exactly where BYD plans to expand.

As of early 2026, BYD operates 69 outlets across 38 prefectures, short of its original 100-outlet target due to real estate challenges. With the Racco, BYD is aiming to shake up the electric kei segment by undercutting rivals on price at around USD 16,500.

Alongside the Racco EV, BYD is also lining up plug-in hybrids like the Sealion 6 for early 2026, aligning with Japan’s growing preference for hybrid powertrains.

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