Shulou(Shulou.com)11/24 Report--

On January 26, 2023, Toyota, the world's largest carmaker by sales, experienced a major personnel change when Akio Toyoda abruptly stepped down as president (the equivalent of CEO).

Toyota's official website "ToyotaUSANewsroom" channel captures the news of Toyota's resignation. Akio Toyoda, 67, said in his 2019 Babson Academy speech that his dream was to "become a taxi driver", but predictably, he did not have the leisure to drive a taxi after leaving office. Because he has tried to turn the tide to save Toyota, or will once again be in crisis.

His resignation this time is not a retirement after success, but a surrender in the face of new difficulties. He says that he "feels the limitations of being a carmaker," so he "thinks it is necessary to retire in a new era."

In the past 2022, Toyota's sales in China were 1.9406 million, down 0.2% from a year earlier, and this is the first time that Toyota's sales in China have fallen in nearly a decade. Many analysts have pointed out that this crack will be the beginning of Toyota's crisis in the Chinese market, and some media even predict that this sales may be the peak of Toyota in the next decade.

Sales fell due to the disadvantage of Toyota's electrification. At present, Toyota's volume products are almost fuel vehicles, hybrid cars, and only a handful of pure electric vehicles. Toyota's lagging behind in the electrified transformation of the auto industry stems from Akio Toyoda's over-conservative development strategy, who himself said, "the biggest operational risk for Toyota is that I have been president."

There is speculation that Mr Sato, Mr Toyoda's successor, took a down-to-earth approach to electrification when he managed Lexus, which may be a glimmer of hope for Toyota's transition to electrification.

Strengthening the transformation of electrification is not only the choice of a Japanese car company like Toyota, but other Japanese brands are also going all out on the road of electrification.

Honda's electrification strategy is very firm and will continue to dig deep into the Chinese market. On January 30, Honda China announced that in order to accelerate the promotion of electrification and further strengthen the strategic operation system in the field of production in China, Honda Technology and Research Technology (China) Co., Ltd., a wholly owned subsidiary of China, will merge with Honda production Technology (China) Co., Ltd. Nissan plans to introduce nine pure electric models and models with Nissan e-POWER technology to the Chinese market by 2025, accounting for more than 40 per cent of total vehicle sales.

At present, Japanese car companies lag behind China in electrification, but as we all know, the threshold for the production of electric vehicles is not high. Previously, domestic Internet companies have achieved great success by relying on the OEM model. Japanese car companies, which have gained a global position in the field of fuel vehicles and hybrid vehicles, have great potential in the field of electric vehicles.

Toyota alone has accumulated a rich supply chain system and has hundreds of billions of dollars in cash. If Ail in is electrified, the domestic new energy vehicle industry must not be underestimated. How to compete with it should be planned in advance.

1. "get up early" to develop new energy vehicles, Japanese car companies can be called the earliest.

As early as 1947, Nissan launched the pure electric car TAMA, which uses lead-acid batteries and has a range of 96 kilometers. In 1983, Nissan launched the MarchEV with asynchronous motors. In 1996, Nissan developed PrairieJoyEV, an electric vehicle equipped with cylindrical lithium-ion batteries, which has been used for six years as an inspection vehicle at the Alesund Research Station in the Arctic of Japan.

In 2010, Nissan's pure electric car, the Leaf, was officially mass produced. So far, the global sales of the leaf has exceeded 600000, with a cumulative mileage of more than 21 billion kilometers.

The rise of Tesla is also inseparable from the promotion of the Japanese car company Toyota. In early 2010, Akio Toyoda said he would build an electric car with Tesla. At the time, Toyota paid $50 million for a stake in Tesla, held a 3 per cent stake in the latter, and sold its California plant to Tesla at a very cheap price of $42 million.

In the difficult years of starting a business, Toyota's financial and technical support enabled Tesla to grow rapidly and successfully achieve his first IPO. But just before Tesla took off at the end of 2016, Toyota suddenly sold all its shares in Tesla and had nothing to do with it.

The trigger for the "breakup" is that the sales of the Toyota RAV4 electric version of the cooperation between the two sides are far lower than expected, and the deep-seated reason is the differences in the route of new energy vehicles between the two sides. Toyota is not optimistic about the electric car market, and Akio Toyoda is pinning his hopes on hydrogen-powered cars, while Musk derided the technology as "impossible to succeed."

In order to oppose pure electric cars, Akio Toyoda repeatedly stressed on a number of occasions that electric cars have been hyped too much and are actually not environmentally friendly. He even said bluntly that he was a "reactionary of pure electric cars", an irreconcilable posture with electric cars. Therefore, Toyota and Tesla "break up", can be forgiven.

Now it seems that Tesla has won the game. In June 2020, Tesla, who specializes in electric cars, surpassed Toyota, which is dominated by fuel vehicles, and became the largest car company in the world by market capitalization, and continues to this day.

Toyota also lags behind Tesla in generating profits. Tesla's net profit was higher than Toyota's in the third quarter of 2022, according to Toyota and Tesla's financial reports. What brings a greater impact is that in terms of total sales in the third quarter, Toyota is close to eight times that of Tesla, but in terms of bicycle profits, Tesla is unexpectedly eight times that of Toyota.

Photo Source: the future of Toyota is not good either. For the whole of 2022, Toyota's sales in the important Chinese market fell for the first time in a decade, and the media predicted that this would be the peak of Toyota's sales in China in the next decade.

Objectively speaking, it is correct for Toyota and other Japanese car companies to choose to develop hydrogen-powered vehicles. Japan's power source is mainly coal and oil-based thermal power generation, which accounts for more than 80% of the country's electricity generation. If pure electric vehicles are promoted in Japan, power consumption will increase, which will deepen the environmental pollution of power generation enterprises.

Compared with electric vehicles, hydrogen-powered vehicles have almost no pollution, high energy density, strong battery life and high speed of replenishing energy. Japan has studied hydrogen-powered cars very early and has almost mastered more than 80% of the technical patents. At present, it is difficult to popularize and popularize hydrogen-powered vehicles because of the high cost of using hydrogen-powered vehicles, while the development of electric vehicles in China and the United States is in full swing.

Previously, Japan did not follow the route of China and the United States, the strategy adopted is to develop hybrid vehicles, and then transition to hydrogen-powered vehicles. This is because, compared with pure electric vehicles, Japan has a developed and mature fuel engine and fuel vehicle industry chain, which can be reused for gas-electric hybrid vehicles and there is no need to build a new industrial chain.

As the "boss" of Japanese car companies, Toyota naturally followed this strategy and took the lead in standing in the mixed camp. As early as 1997, Toyota took the route of hybrid cars and launched a hybrid car called the Prius, which became the first mass-produced hybrid car in the world.

2. "catch up with the late set" even if Toyota has the accumulation of time and technology in the hybrid, it is difficult to say that the development effect is successful.

Compared with the expanding market of pure electric vehicles in China and the United States, Toyota's sales of hybrid-based new energy vehicles have been very low. The insured volume of cars best reflects the real sales of automobiles. Taking the annual insurance data of Toyota new energy vehicles in China in 2022 as an example, the month with the highest number of mixed risks is January, but only 1334 vehicles. For Toyota's slow-growing electric vehicles, the most dangerous month in 2022 was in December, when only 2585 vehicles were sold. Compared with the monthly sales of tens of thousands of new forces in China, Toyota obviously lags behind.

Other Japanese car companies have developed more slowly in the field of electric vehicles. In 2021, among the top 20 electric vehicle sales in the world, only Toyota ranked 16th on the list, and only 110000 vehicles were sold in the international market, accounting for only 1.7 per cent of global pure electric vehicle sales.

In comparison, China's new energy vehicle industry, which is dominated by electric vehicles, is developing rapidly. According to the latest statistics of the China Association of Automobile Manufacturers, China's new energy vehicles continued to grow explosively in 2022, with production and sales of 705.8 and 6.887 million vehicles respectively, an increase of 96.9% and 93.4% respectively over the same period last year, ranking first in the world for eight consecutive years. In 2022, the global sales of new energy vehicles in China accounted for more than 60%.

More importantly, the export of new energy passenger cars in China is also developing rapidly. Before 2021, the annual export volume of passenger cars in China is about 40-700000, which is quite different from that of Japan. But now, driven by the export of new energy vehicles, China's passenger car exports rank among the top three in the world, only slightly lower than Japan.

China's new energy vehicle exports from 2018 to November 2022 China's new energy vehicle sales are growing rapidly and are already occupying the market of Japanese cars in China. In the past 2022, only 4.092 million Japanese cars were sold in China, down 10.3 per cent from a year earlier, according to the Federation of passengers. At the same time, Japan's market share fell below 20% again, down 2.7 percentage points from the previous year.

As for Japanese car companies, in addition to Toyota's first year-on-year decline in sales in China in 10 years, Honda also fell 12.1%, the second consecutive year of decline; Nissan sales fell 22.1% year-on-year and declined for four consecutive years. Second-tier brands such as Mazda and Mitsubishi are more difficult and have been regarded by industry insiders as "sounding the alarm of delisting".

In 2023, China's auto market, with the efforts of new energy car companies, is likely to continue to squeeze Japanese cars. According to Zhang Yongwei, vice chairman and secretary-general of the China Electric vehicle Association, production and sales of new energy vehicles are expected to increase by 30-40% year on year in 2023, and the overall number is expected to be close to 10 million, which may become the first country in the world to sell 10 million new energy vehicles annually.

Not only in the Chinese market, Europe, as an important market for Japanese cars, will put more pressure on Japanese car companies in the future. According to the latest EU plan, emissions from new cars and trucks will be reduced by 65% from 2030 to achieve zero emissions from net cars by 2035. If Japanese car companies want to maintain the car market in the European Union, they must develop electric vehicles.

Japanese media have sobered up about the future of the global auto industry. Nikkei Chinese website said that the popularity of pure electric vehicles is faster than experts had predicted. BCG increased the share of pure electric vehicles in global new vehicle sales (excluding large commercial vehicles, etc.) by 11 percentage points in 2030 to 39 per cent in a year.

There is no doubt that the strategy of developing hybrid and then transitioning to hydrogen-powered cars is running out of time for Japanese car companies. Rampant motorization is one of the few options for Japanese car companies.

In terms of electrification, Toyota has previously announced a new strategy to sell 3.5 million pure electric vehicles by 2030. By January 2023, Akio Toyoda talked about specializing in the development of electric vehicle manufacturing platforms. It is speculated that the down-to-earth electrification of Lexus under Sato, his successor, may be a glimmer of hope for Toyota's transformation to electrification.

Honda's motorization strategy is more determined. In order to further strengthen and accelerate the promotion of the electric industry, Honda China will set up an electric development headquarters in April 2023, which is responsible for vehicle strategy and pure electric product development functions, while focusing on electric-related businesses such as motorcycles, power generation and energy storage. in order to better support the previously proposed goal of electrification transformation.

Honda's new electric business development headquarter source: Honda according to Honda's planning goal, 2027, to provide the Chinese market with 10 eRom N brand pure electric vehicles. After 2030, all new models launched in China are electric vehicles such as pure electric cars and hybrids, and new fuel vehicles will no longer be put into operation. Moreover, in markets including China, Honda's sales of pure electric vehicles and fuel cell vehicles will reach 40% in 2030, 80% in 2035 and 100% in 2040.

To achieve the goal, both Guangzhou Auto Honda and Dongfeng Honda are setting up new electric car plants, which are scheduled to start production in 2024. In addition, Honda has also undergone personnel changes. Honda China Executive Service member and Chinese Minister Katsushi Inoue will step down as Chinese Minister on April 1, 2023 and become Honda Executive Officer and Minister of Electric Power Development.

Nissan plans to introduce nine pure electric models and models with Nissan e-POWER technology into the Chinese market by 2025, accounting for more than 40 per cent of total vehicle sales. Moreover, Dongfeng Nissan also proposed that the existing production line will be renovated during the 14th five-year Plan period, and at least two more new energy vehicle platforms will be introduced, so that the annual production capacity of new energy vehicles will reach 200000.

Nissan electric planning source: Nissan Suzuki said that in fiscal year 2023, it plans to launch the first pure electric vehicles in Japan, including small electric SUV and mini electric vehicles. In 2024, Suzuki will further launch all-electric cars in Europe and India, and its first all-electric motorcycles worldwide. By fiscal year 2030, Suzuki will invest 4.5 trillion yen ($34.8 billion) in research and development and capital expenditure to produce pure electric vehicles.

On the other day, Mazda also plans to invest 1.5 trillion yen ($10.6 billion) in the car electrification process by 2030, and plans to equip all its vehicles with electric technology by 2030.

At present, the electrification of Japanese car companies obviously lags behind that of China, but as we all know, the threshold for the production of electric vehicles is not high. Previously, domestic Internet enterprises have achieved great success by relying on the contract manufacturing model, which has achieved new car-building forces such as "Wei Xiaoli". Japanese car companies, which have developed well in the field of fuel vehicles and hybrid vehicles, will have great potential in the field of electric vehicles if they are electrified.

4. Catching up from behind? Can the Japanese system rely on its inherent technological advantages and continuous innovation to create the miracle of "catching up from behind" after the electrification of this storm?

According to Schumpeter, the originator of "innovation theory", there are two kinds of innovation, Schumpeter Ⅰ innovation and Ⅱ innovation. Schumpeter Ⅰ innovation "is created by bold attempts by new entrepreneurs who are capable and lucky enough to replace existing companies in the industry". New forces such as Wei Xiaoli in China can be attributed to this kind of innovation. They entered the automobile market in one fell swoop with the innovative form of new energy vehicles, and they also had the possibility to replace traditional car companies.

Another extreme type of innovation is Schumpeter Ⅱ innovation, which "mainly comes from large enterprises, which accumulate knowledge that is difficult to imitate in specific areas, and thus gain technological advantages that are sustainable and self-propagating". Previously, the new energy vehicle companies of China's GAC, Geely and other traditional car companies, mostly belong to this kind of innovation, these car companies have created better performance in 2022, surpassing the new power.

Toyota, as the "handle" of traditional car companies, once it decides to electrify AII in, it is more likely to create the results shown by Schumpeter's Ⅱ innovation.

The threshold for the production of electric cars is not high. Wang Xiaolin, founder of China Sailin, said that when favorable policies are introduced, electric car companies can spring up like bamboo shoots after a spring rain. "anyone can do it because it's really too easy."

Moreover, Japanese car companies have accumulated a lot in the field of electric vehicles. No matter Toyota, Honda or Nissan, the history of the development of electric vehicles is much earlier than that of domestic car companies. Moreover, the Japanese electric vehicle industry chain is quite huge, and there are giants in the core aspects of battery, motor and electric control. In terms of batteries, Panasonic's installed capacity in the world is second only to Ningde Times and LG. In terms of chips, four of the world's top ten suppliers of power semiconductors are from Japan. In terms of electric motors, Japan has Japanese electricity, which is currently providing motors to GAC Ean, Ulai, Geely and other domestic car companies.

At present, the new energy vehicle market fluctuates greatly, there are many car companies, and most of them are in a state of loss. Whether some car companies are sustainable in the future should be called into question. Therefore, Toyota and other Japanese car companies, in the field of electrification, to achieve the speed of development of new energy subsidiaries of GAC Ean and other traditional domestic car companies, there is not only theoretical support, but also the possibility of practice.

5. We have to guard against the electrification of Japanese car companies, and they may even catch up from behind, and domestic car companies must be on guard.

In 2023, for domestic new energy vehicle brands, it has been very "internal". On January 1, the state subsidy for new energy vehicles was officially cancelled, bringing cost pressure to car companies. Many car companies began to raise prices, with an increase of thousands of yuan. Coincidentally at this time, Tesla suddenly cut prices, bringing a strong earthquake to the car market.

In this regard, the January sales data of car companies have been reflected. In addition to BYD and ideal to achieve double-digit year-on-year growth, other car companies, including Ian, Xilai, Nezha, AITO, polar krypton and other brands have declined, of which zero-running cars declined the most, falling 87% from the previous month, directly falling out of the top 10 sales.

In the face of the market game brought by Tesla, elimination and reshuffle are on the way.

In response to Tesla's price reduction, Mengjie, Xiaopeng and Weilai all began to reduce prices. Before that, Li Bin, founder of Weilai, said bluntly that Weilai never cut prices, but now it has to be reduced, which is enough to show the helplessness of car companies such as Weilai.

Unlike Tesla, which has made profits, most of the domestic new energy car companies, except BYD, are not profitable and are dragged into the price war, with worrying consequences. The investment and financing capital of the new energy automobile industry is weak, and the funds in the hands of these unprofitable car companies are difficult to last for a long time. And Japanese car companies at this time All in electrification, will make the plight of these car companies even worse.

Compared with domestic car companies, Japanese car companies are good at controlling quality, Japanese electric vehicles may be more leather and durable than domestic electric vehicles in the future, and domestic models may be hoisted in terms of practicality. At present, the domestic competition for new energy vehicles has just entered the stage of practicality.

Previously, the export market, which domestic new energy car companies have high hopes for, will be more difficult if they face competition from Toyota and other Japanese motorized brands.

Regardless of Europe and the United States, in terms of Southeast Asian markets alone, Japanese car companies began to work as early as the 1970s. Japanese car brands accounted for 95% of Indonesia's market share in 2021. In 2021, SAIC GM Wuling, which has done a good job in China's exports, sold a total of 25600 cars in Indonesia, accounting for about 2.9% of the market.

According to the Japan Automobile Industry Association, in Southeast Asia, there are 22 spare parts manufacturers and about 60 vehicle factories in Southeast Asia, which have surpassed those in Japan. More importantly, relying on its geographical advantages, Japan formulated an "exclusive" preferential tax plan with Thailand, Singapore, Indonesia, Malaysia and the Philippines in 1988, which can reduce tariffs by 50% on the import of auto parts between the six countries.

Thus it can be seen that after the electrification of Japanese car companies, they may squeeze out most of their competitors, especially Chinese new energy car companies, in Southeast Asia and other overseas electric vehicle markets by virtue of their first-mover advantages, localized complete supply chain and tax advantages.

For Chinese new energy car companies, an important way to cope with the rapid electrification of Japanese cars should be intelligence. In terms of intelligence, even Toyota, the leader of the Japanese system, is not very smart. Earlier, the Tokyo Olympic Games unmanned ferry hit athletes scandal, so that Toyota and even Toyoda Akio into an intelligent embarrassment.

On the other hand, the intelligent level of the new power automobile enterprises in China is very high. Prior to this, Wang Chuanfu, chairman of BYD, said that "Chinese new energy vehicle brands have surpassed foreign enterprises in intelligent technologies such as intelligent Internet connection and intelligent cockpit." In an exclusive interview in 2022, CEO Ding Lei, founder of Chinese Express High-tech Motors, which focuses on the future intelligent transportation industry, also said that in the era of new energy intelligence, Chinese cars can surpass foreign countries. Gu Hongdi, vice chairman and president of Xiaopeng Automobile, directly said that with the continuous promotion of the development of new energy vehicles in China, many brands in China have been ahead of Tesla in technology, car-building concept and hardware, not to mention Japanese electric vehicles.

Therefore, in the face of the rapid electrification of Japanese car companies, domestic car companies need to make early plans and take differentiated competition in intelligence as an important response strategy.

[full text reference]

[1] "Tesla's net profit per car has reached 8 times that of Toyota," Nikkei Chinese website

[2] "the change of Toyota coach", Nikkei Chinese website

[3] "Babson College speech: finding your own doughnut", Akio Toyoda

[4] "the storm is electrified! Honda wield a knife to innovate itself inward at the beginning of the year. Can Japanese cars reproduce the glory of fuel cars? ", time Finance

[5] "the most electric Japanese giant: Honda ALL IN Electric is a firm bet or too hasty? Sohu Automobile

[6] "sell all shares Toyota Tesla may go to war", Automotive Business Review

[7] "Akio Toyoda gave way and the new boss suddenly took over, and Toyota came to the time when it was necessary to change."

[8] "without job-hopping for 30 years, can he change his order to Toyota from the current job to the top job? "Oh, cars and things.

[9] "the new energy car market in January is too bleak, only BYD and ideal cars are growing against the trend."

This article comes from the official account of Wechat: che Bai think Tank (ID:EV100_Plus). Author: Chen Zhongshan.

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