The growing presence of Chinese brands is particularly evident in South Korea, where BYD has recorded impressive sales amid rising demand for affordable electric vehicles.
BYD sold more than 20,000 vehicles in South Korea in the first nine months of this year, surpassing the combined sales of Toyota and its Lexus brand, according to market research firm Carisyou.
The company's performance reflects a shift in consumer attitudes towards Chinese vehicles, which were previously regarded by many South Koreans as inferior in quality.
Kim Min-seon, a 48-year-old Seoul resident who purchased BYD's Dolphin electric car in July, said her decision initially attracted criticism from people around her.
"Everyone reacted like, 'Why did you buy a Chinese car? Are you trying to get yourself killed?'" she said.
Kim explained that she had initially considered buying Hyundai's Casper EV but was discouraged by a delivery waiting period of more than two years. BYD's Dolphin, which cost about $18,500, offered an affordable alternative with good equipment and immediate availability.
Another South Korean buyer, content creator Lee Seong-dong, also said his perception of Chinese vehicles changed after experiencing one firsthand.
"Honestly, I didn't have a good image of Chinese cars, either," Lee said.
"Seeing the car in person and driving it changed my thinking a lot," he added.
Industry analysts attribute BYD's growing popularity partly to the country's increasing appetite for relatively inexpensive electric vehicles. According to Lee Jae-il, a senior analyst at Eugene Investment & Securities, rising petrol prices have further strengthened the appeal of electric cars.
Petrol prices have increased by almost 10 per cent since the US-Israeli war on Iran began, while Hyundai and Kia have concentrated largely on premium electric models, with only a limited number of options priced below $30,000.
"The timing has worked particularly well for BYD," Lee said.
South Korea's electric vehicle market has expanded considerably, with EVs accounting for roughly a quarter of new car sales this year, compared with just three per cent in Japan, according to industry data.
The favourable market conditions have encouraged other Chinese manufacturers to step up their expansion plans.
Geely's premium Zeekr brand began accepting orders for its 7X sport utility vehicle in South Korea in June and intends to establish as many as 14 showrooms before the end of the year.
Chery is also expected to enter the market in 2027, according to an industry presentation reviewed by Reuters, although the company declined to comment.
Meanwhile, Xpeng, which established a local subsidiary last year, is seeking personnel to develop its retail network, according to a recruitment notice published on LinkedIn.
The growing competition has raised concerns among South Korean automakers. Jeong Dae-jin, chairman of the Korea Automobile & Mobility Association, has called for tax incentives to support locally manufactured electric vehicles.
He said domestic automakers were "very desperate" in the face of the competitive pressure.
Japan presents a tougher challenge
Despite their progress in South Korea, Chinese manufacturers are encountering significant resistance in Japan, where foreign brands account for only about six per cent of passenger vehicle sales.
Japanese consumers have traditionally favoured domestic manufacturers, particularly Toyota, whose hybrid technology remains popular among motorists.
The market's limited appetite for fully electric vehicles, coupled with concerns about Chinese products and strained diplomatic relations between Tokyo and Beijing, has made expansion more difficult.
A Pew Research Center survey conducted this year found that 88 per cent of Japanese respondents and 71 per cent of South Koreans had an unfavourable view of China.
However, BYD Auto Japan said diplomatic tensions had not had any particular impact on its sales, showroom visits or customer enquiries.
BYD entered Japan in 2023 and has since established more than 75 dealerships, with plans to expand the network to 100.
Nevertheless, its sales remain modest. The company sold fewer than 4,000 vehicles in Japan during the first nine months of this year, representing just 0.1 per cent of the market, despite recording annual sales growth.
In July, BYD introduced a boxy electric vehicle targeting Japan's popular kei minicar segment, which is largely controlled by domestic manufacturers. By September, sales of the model had reached only about 650 units.
For Marc Yamada of consulting firm Alvarez & Marsal, however, the company's long-term prospects should not be judged solely by its current market share.
"It's not the market share," Yamada said. "It's the growth."
Other Chinese-backed ventures are also positioning themselves for a longer-term presence in Japan.
EMT, a start-up backed by Chery, plans to introduce a kei car in the first half of 2027, followed by three additional models by 2029. Its Chief Technology Officer, Koji Yamamoto, told Reuters that the company hopes to begin manufacturing vehicles locally in the 2030s.
Zeekr is also preparing to introduce a luxury van in Japan, initially targeting taxi operators and chauffeur-driven transport services, according to Hiroyasu Koma, chief executive of distributor folofly.
Quality and security concerns persist
For some Japanese consumers, however, the challenge goes beyond price and product availability.
Fumio Kuwabara, an early adopter who has driven Japanese electric vehicles since 2010, said he remained unconvinced about the reliability of Chinese cars.
"I feel like they've cut corners in places you can't see," he said.
Security concerns have also entered the debate. Daishiro Yamagiwa, a lawmaker from Japan's ruling party, told Reuters that the country needed to consider potential risks associated with Chinese vehicles that could be controlled remotely from outside the car.
Nevertheless, the experiences of South Korean buyers suggest that consumer perceptions may change when affordability, technology and driving experience are taken into account.
Chinese automakers have increasingly demonstrated their ability to invest in dealership networks, adapt products to local preferences and compete on technology and pricing. Their expansion is also driven by the intense competition in China's domestic market, where an oversupply of brands has made overseas growth increasingly important.
Liao Jingnan, founder of Tokyo-based consultancy MobyInfo, said Chinese manufacturers typically adopted a gradual approach when entering new markets.
"They enter first, watch what happens and gradually adjust their strategy," Liao said.
With their growing presence in South Korea and continued investments in Japan, Chinese automakers appear prepared for a prolonged contest in both markets. Whether Japanese consumers will eventually become more receptive, as some South Koreans have, remains an open question.