The foray of China's electric vehicle manufacturers into Japan's compact-car market could intensify competition with domestic and foreign makers, Xinhua News Agency reported Wednesday.

"Foreign automakers will be facing formidable local rivals," Xinhua quoted Mizuho Bank senior researcher Tang Jin as saying.

Tang's comment comes as BYD (HKG:1211, SHE:002594) showcased 13 models during the 2025 Japan Mobility Show, the report said.

Among the models on display during the event are its compact all-electric Sealion Mini EV, which is seen to tackle Japan's domestic-dominated lightweight car market segment of 1.7 million units, the report said.

BYD's entry into the compact car market could be a "catalyst" that would popularize small EVs in Japan, Xinhua quoted Suzuki Motor (TYO:7269) Toshihiro Suzuki as saying.

The Shenzhen, China-based EV giant's Japan operations said it is tailoring its market approach to Japanese preferences, Xinhua reported.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)