In the past two years, the Chinese automotive industry has rapidly risen, creating significant competitive pressure on the Japanese automotive industry.
Due to the similarity in car manufacturing philosophies between China and Japan, Japanese car sales have been directly impacted.
Recently, Japanese media have collectively reflected on why Japanese cars are no longer selling as strongly as they used to in the market.
Some believe that the decline in Japanese car sales is due to the rise of Chinese cars.
Although this view is hard to accept within Japan, and some attribute it to changes in the times, this explanation seems overly simplistic.
Several Japanese media outlets have reported on the significant decline in sales of the three major Japanese car manufacturers, sparking widespread discussion and reflection.
According to a report by Kyodo News on May 10,
In April, Toyota's sales in China fell by 27.3% year-on-year, reaching 118,200 units;
Honda's sales dropped by 22.2%, to 73,831 units;
Nissan's sales decreased by 10.4%, to 54,921 units.
The sales decline of joint ventures in China was even more significant, with FAW Toyota down by 31.2%, GAC Toyota down by 32.1%, and GAC Honda down by 44.6%.
Although there were sales increases for Lexus and Dongfeng Honda, these are not broadly representative.
If Japanese cars are performing poorly in the Chinese market, how are they doing globally?
According to Toyota's data, its global sales in the first quarter of 2024 were 2.4 million units, a year-on-year growth of only 0.1%.
Detailed regional data shows that while Toyota performed well in the North American and European markets, it experienced a general decline in other regions.
Toyota's first-quarter sales in North America were 658,000 units, a year-on-year increase of 20.9%; in the US, sales were 565,000 units, up 20.3%; in Canada, sales were 57,000 units, up 28.5%; in Mexico, sales were 28,000 units, up 25.4%.
In Europe, Toyota sold 309,000 units, a year-on-year increase of 11.2%.
However, in its traditionally strong markets such as Southeast Asia and Latin America, sales significantly declined, with Thailand down 21.7%, Vietnam down 45.1%, Brazil down 2.6%, and Argentina down 12%.
Even more concerning, Toyota's domestic sales in Japan fell by 29%, reflecting the severe economic and consumer conditions in Japan.
Analyzing these data, we can see a significant trend: Japanese cars remain popular in traditional developed markets in North America and Europe, but they are experiencing an across-the-board decline in emerging markets.
Other Japanese car manufacturers show similar trends, but why is this the case?
In their reflection, Japanese media do not acknowledge being outperformed by Chinese cars; instead, they believe Chinese cars lack respect for a century of automotive technological accumulation, employing "shortcuts" that are unsustainable.
They also attribute the first-quarter sales decline to economic fluctuations, with North America and Europe being relatively stable while Latin American and Southeast Asian economies have significantly declined.
However, does this explanation hold up?
If we look at China's car export data, we find the issue is not so simple.
From January to February 2024, China's main car export destinations included Russia, Mexico, Belgium, the UK, UAE, Saudi Arabia, Brazil, the Philippines, Australia, and Thailand.
This indicates that while traditional markets in North America and Europe still favor conventional cars, emerging markets are more receptive to new automotive technologies and products.
It is foreseeable that in the coming years, the sales of Japanese cars may continue to decline.
So, where exactly did Japanese cars go wrong?
Some believe it is because Japan went wrong in its direction of innovation, being overly committed to hydrogen energy technology.
However, hydrogen energy may not be the wrong choice, and the current sales decline is not due to this.
In fact, the rise of Japanese cars benefited from two historical opportunities: during the 1990s oil price surge, Japanese cars stood out for their fuel efficiency; since the 1980s, as cars rapidly became more accessible to the public, Japanese cars gained global popularity for their high quality and affordability.
However, entering the 2020s, the global automotive industry faces two major transformation opportunities: transitioning from fuel vehicles to new energy vehicles represented by electric cars, and transforming from traditional transport tools to experiential driving tools, with an increasing emphasis on driving pleasure and experience.
Faced with these two transformation opportunities, Japanese cars chose the wrong direction.
Firstly, Japanese cars opted for incremental innovation in transitioning to new energy, missing out on significant opportunities.
They tried to modify their strengths (fuel efficiency and lightweight) to electric, ignoring the huge differences between electric and traditional cars in terms of driving and driving modes.
Secondly, Japanese cars failed to keep up in terms of autonomous driving and human-car interaction experiences.
While Chinese cars were excelling in autonomous driving and user experience, Japanese cars remained cold and impersonal transport tools.
These issues are not technical challenges but rather ideological constraints.
When it comes to transformation, what truly limits innovation is often mindset, not technology.
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