In 2023, Toyota proudly claimed the top spot in global sales.
However, in the Chinese market, Toyota has repeatedly faced obstacles in the field of new energy vehicles, with its market share declining for three consecutive years.
Facing fierce competition from domestic new energy vehicles, Toyota decided to adopt the strategy of "if you can't beat them, join them" and sought cooperation with Chinese car companies to inject new vitality into its new energy vehicle business.
Why has Toyota encountered difficulties in the Chinese market? What measures has Toyota taken to address this issue?
GAC, FAW, and SAIC are three domestic automotive companies that hold significant positions in the Chinese market.
In 2022, China's vehicle ownership reached 315 million units.
This means that as long as GAC, FAW, and SAIC continue to maintain stable production and sales, they will have no worries about their prospects in the domestic market.
However, Toyota's entry into the Chinese market with its reliable vehicles has brought unprecedented competitive pressure to these domestic enterprises.
Toyota's Camry, Corolla, and Crown models have been deeply rooted in the Chinese market for over a decade, seizing a large share of the market from domestic vehicles.
In the face of Toyota's strong competition, FAW and GAC chose to collaborate with Toyota through joint ventures like GAC Toyota and FAW Toyota to produce models such as the C-HR, Yaris, Camry, and Corolla, thereby gaining new profit opportunities.
However, this collaboration also brought internal competition pressures, as GAC and FAW developed a competitive relationship in sales.
SAIC faced similar issues. To survive in the competition, SAIC needed to make breakthroughs in technology.
They had two options: cooperate with foreign companies like Toyota or collaborate with Huawei.
Although Huawei started in the communications industry, it quickly rose in the automotive field, with its latest AITO M7 model receiving 100,000 orders, largely due to its advanced assisted driving features.
While there is skepticism abroad about assisted driving technology, Chinese consumers show great interest in this technology.
Among the users who purchased the AITO M7, 60% are interested in autonomous driving technology.
Autonomous driving technology is seen as the key to the future development of automobiles, and Huawei's technological advantage in this field has earned it market success.
However, Huawei faces high costs in developing new technologies and needs to find partners to share the burden.
Despite SAIC's refusal to cooperate with Huawei, insisting on mastering core technologies independently, Huawei has not stopped seeking collaboration opportunities.
In April of this year, Tencent News reported that Huawei would collaborate with Toyota to jointly develop autonomous driving technology.
As the world's top-selling car manufacturer, Toyota's collaboration with Huawei would benefit Toyota technologically and bring substantial benefits to Huawei.
Toyota realized that while their core business is traditional fuel vehicles, they must adapt to the wave of new energy vehicles and autonomous driving technology.
Toyota's founder, Akio Toyoda, has always maintained that fuel vehicles are the mainstream of the automotive market and believes that new energy vehicles can at most capture 30% of the market share.
He has often criticized new energy vehicle manufacturers like BYD, arguing that their products are not as environmentally friendly as advertised, even claiming that new energy vehicles cause more pollution than fuel vehicles.
He also promotes hydrogen energy vehicles as the true environmentally friendly cars.
However, reality struck Toyota hard.
In 2023, Toyota's sales in the Chinese market were 1.701 million units, while BYD's sales exceeded 3 million units, with new energy vehicles accounting for at least 30% of the market share.
BYD's new energy vehicle sales alone matched Toyota's performance for at least half a year.
Facing such competition, Toyota had to reassess the potential of the new energy vehicle market.
Despite an engine fraud scandal earlier this year, with Akio Toyoda publicly apologizing, Toyota has not halted its exploration in the new energy vehicle field.
They realized they needed to boost fuel vehicle sales through price reductions while accelerating the development of new energy vehicles.
Toyota eventually decided to collaborate with Huawei, leveraging Huawei's technological advantages to advance autonomous driving technology.
Toyota began researching autonomous driving technology as early as 2015, but progress was slow.
This year, they decided to collaborate directly with Huawei, investing jointly, developing jointly, and benefiting jointly.
Toyota and Huawei have collaborated before.
In 2020, Toyota partnered with Momenta, which provided high-precision maps and real-time updates, helping Toyota make progress in autonomous driving technology.
Toyota also became a shareholder in Momenta, providing financial support.
This time, Toyota's collaboration with Huawei involves applying Huawei's advanced technology to Toyota's vehicle production, such as the advanced language recognition system used in the ninth-generation Camry.
This collaboration not only enhanced the technological level of Toyota vehicles but also laid the foundation for future cooperation between the two parties.
Toyota and Huawei also jointly researched the Qualcomm Snapdragon 8155 chip, and through continuous integration, their technical personnel facilitated further collaboration.
Toyota's experience in vehicle systems and mechanical stability technology provided valuable support to Huawei.
Toyota made it clear that the collaboration with Huawei was not about making money in the Chinese market but about achieving greater breakthroughs in the global market.
Toyota aimed at markets in Europe, North America, and Japan, particularly in the field of smart driving technology, where Amazon, Microsoft, and Google are potential competitors.
Despite the negative impact of Tesla's 2016 autonomous driving accident, it provided Toyota and Huawei an opportunity to enter the US market.
They plan to introduce their products to the US market once the technology is mature, jointly developing autonomous driving technology.
The collaboration between Toyota and Huawei shows that product development relies on technological support.
No matter how advanced the technology, it ultimately has to serve the real world, bringing convenience to users' lives.
Each company must work together to remain competitive in the fierce market.
Toyota and Huawei's collaboration is both a strategy to address market challenges and a necessary choice for technological advancement.
Through strong alliances, they are expected to achieve greater breakthroughs in the global new energy vehicle and autonomous driving technology fields.
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