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

Author | Lu Shiming

Editor | Gale

Fuel saving, durability and value preservation have been Chinese consumers' impression of Japanese cars for many years, and it is with these labels that Japanese cars have been selling well in the Chinese market for decades.

However, with the rise of China's automobile industry, Japanese cars seem to be being abandoned by the times. "fuel saving" has been severely hit in the face of new energy vehicles, "durability" has also been weakened with the gradual maturity of its own brand supply chain, and the so-called "preservation of value" has gradually lost its meaning in the context of breaking its advantages. Not only that, while the positive label is broken, negative tags such as "low configuration" and "low security" are also deepening.

Japanese cars are losing their "faith" and are in decline in China. This is reflected not only in the change in consumer attitudes, but also in the declining market sales. Why did it cause such a situation? What on earth did Japanese cars do wrong?

In recent years, with the rapid development of the domestic automobile industry, Japanese car companies addicted to the comfort zone underestimate the changes in consumer demand, and the slow response leads to the missed market opportunities of intelligence and new energy. At the same time, in the technical route, hybrid, pure electricity, hydrogen power, Japanese cars pursue a large and comprehensive development strategy, resulting in unable to provide Chinese consumers with better quality and new products.

Based on this fact, under the circumstances that independent brands are full of healthy competition and are constantly recognized by domestic consumers, the decline of Japanese cars seems doomed. It can be expected that everything is just beginning, with the prosperity of domestic cars, Japanese cars in the Chinese market will usher in a real rout.

1, market sales continue to decline in the automobile market, sales volume is always the best proof of strength, but also the best communication effect of the car company "spokesman". It has been selling well in China for more than 20 years, the "golden era" of Japanese cars has long been a thing of the past, and Japanese car companies have long been on the decline.

Overall, according to data released by the China Automobile Association, sales of Japanese cars in China in 2022 were 4.092 million, down 10.3% from the same period last year, second only to the Korean series (34.7%). At the same time, the market share of Japanese brands in China is shrinking at an accelerated pace, falling below 20% in 2022, down 2.7% from the same period last year.

Last year, three Japanese brothers dropped out of the top five brands sold in China, replaced by BYD, Changan and Geely.

Source: FIFA is specific to car companies. Toyota, as a "Japanese number one", sold a total of 1.9406 million new cars in China in 2022, down 0.2 per cent from 1.944 million in 2021. But it is worth noting that this is Toyota's first year-on-year decline in sales in China in a decade, and it is the second year in a row that annual sales growth has slowed, partly indicating that Toyota has entered a stage of relatively weak growth in China.

Compared with Toyota, which has a stronger "faith" color among consumers, Honda and Nissan, the other two companies of the Japanese Big three, are declining even more.

Honda's terminal car sales in China totaled 1.3731 million in 2022, down 12.1 per cent from a year earlier. Specific to its two major joint venture brands Guangzhou Automobile Honda and Dongfeng Honda, sales at the end of 2022 both showed a certain decline, to 7277 million vehicles and 652400 vehicles respectively, down 6.19% and 17.8% respectively from the same period last year.

Nissan, which ranks third in Japan, sold only 1.0452 million new cars in China last year, a year-on-year decline of 0.1 per cent in 2019 to 22.1 per cent in 2022.

It should be pointed out that 2022 is the year when consumer attitudes really began to change, but in this process, the "belief" loss rate of Japanese cars is still in the initial stage. A year later, in the era of rapid information dissemination, consumer awareness has been "substantially" reversed, and the market situation of Japanese cars began to deteriorate at an accelerated pace in 2023.

According to official figures released by several Japanese car companies, sales of Toyota, Honda, Nissan and Mazda in China all declined in the first quarter of this year compared with the same period last year. Mazda fell the most, falling more than 60% year-on-year in the first quarter of 2023, compared with 14.57% for Toyota, 37% for Honda and 36.8% for Nissan.

Behind the sharp decline in sales is a sharp change in consumer attitudes, and the positive label of Japanese cars for many years has lost its "appeal" in the current market competition. Especially for the younger generation of consumers, it is not even "attractive".

2. The direct reason for the decline of Japanese cars in the comfort zone is undoubtedly that the products have lost their original advantages, and the obvious lack of competitiveness is also being magnified.

One car has been handed down for three generations, but the car is still there. The "durability" of Japanese cars is based on the immature production line and parts supply of domestic cars in the early years. As domestic cars also use highly automated production lines, as well as BOSCH Bosch auto parts, ZF Mobil, AISIN Aixin, etc., the quality of domestic cars has been greatly improved, so that consumers' enthusiasm for buying Japanese cars is gradually reduced.

And then there is the preservation rate. The high value preservation rate of Japanese cars in the past shows that the reputation of Japanese cars is good, and the market is big, so there is no need to worry about later maintenance, but with the continuous decline in the price of new cars, the value preservation rate of Japanese used cars is not the same as in the past.

There is also fuel consumption. "fuel saving" of Japanese cars is the "consensus" of old drivers, but it is obviously "out of date" to refer to at least five years ago.

In recent years, domestic brands have made rapid progress in engine thermal efficiency, not only the matching horsepower is increasing, but also the fuel consumption performance is remarkable. Especially with the outbreak of domestic hybrid, the fuel consumption advantage of Japanese cars almost does not exist. In the case of Toyota Corolla dual-engine and BYD Qin PLUS DM-i, the fuel consumption is about 4.7L in the case of power deficit.

Left: Carola double engine right: Qin PLUS DM-i champion version when durability, preservation of value, low fuel consumption has become a thing of the past, Japanese cars have to face a lot of "trouble". For example, the Japanese car paint surface is thin, the sheet metal is poor, the power is weak, the safety is not good, has become a "consensus" of consumers.

The product can not sell because the product has no advantage, and the product has no advantage because of the deviation of the development direction of the enterprise.

In the early years, Japanese cars once accounted for more than 30% of the domestic market share by virtue of "advanced technology," and years of best-selling made Japanese car companies fall into the comfort zone of "lying down and making money." This makes them somewhat "ignore" the technological progress of their own brands, as well as the change in market winds brought about by changes in consumer demand.

It is never too late to mend. Today, with the continuous development of the automobile industry towards intelligence and new energy, Japanese car companies are also taking "remedial" measures to truly understand the Chinese market and promote the electrification process. Unfortunately, Japanese cars have once again missed the opportunity on the technical route.

Toyota, as the world's largest car company by sales, took the lead in planning the race track on hydrogen power. Although it accounts for 48% of the world's hydrogen energy patents, storage, transportation, safety and other problems have led to the failure of hydrogen vehicles to become the "mainstream" of the market.

In addition, in terms of hybrid technology, Toyota and Honda have good hybrid technology, but BYD DMi, Geely Raytheon, Great Wall Lemon DHT, Chuanqi waves, and the hybrid technologies of various independent brands also perform well in terms of ride comfort, performance, fuel consumption, and so on.

Then there is Pure Electric. In April this year, at the "briefing on the New system and policies", Toyota's new president, Henji Sato, personally stated: "Toyota failed in the development of pure electric cars, and found a lot of problems in practice." Honda and Nissan are more backward in electrification than Toyota.

We can do all kinds of technical routes, but none of them can turn the tide. The big and comprehensive development strategy is obviously not suitable for the current Japanese car companies.

3. Domestic brands rise one after another in the world. The decline of Japanese cars comes from their own "slack", but also from the rapid progress of domestic cars.

An obvious perception is that the competition among domestic car brands has become more and more fierce in recent years. In this market atmosphere, the product power of domestic cars has been significantly improved every year. Whether in the aspects of intelligence, power or appearance design, they all understand better and better meet the needs of the Chinese people.

Especially in the field of new energy vehicles, the past three years have been the period of rapid development of domestic new energy vehicles, and 2022 is the year of the outbreak of new energy vehicles. Sales of new energy vehicles are growing rapidly, with a penetration rate of 27.6%, achieving the new energy penetration target three years ahead of schedule.

According to the data, in the past three years, domestic passenger cars sold 20.178 million, 21.482 million and 23.563 million respectively, of which the sales of new energy passenger vehicles were about 1.246 million, 333.4 and 6.5 million respectively, up 14.6%, 167.5% and 95% respectively over the same period last year.

Further breakdown, in the field of new energy vehicles, pure electric passenger vehicles accounted for nearly 80% of the share. However, the share belonging to Japanese cars is almost negligible. According to the 2022 new energy narrow passenger car manufacturers' retail sales ranking TOP15 released by the Federation of passengers, none of the Japanese joint ventures is on the list.

Not only at home, but also on the global stage, domestic cars are also challenging Japanese cars.

In the past two years, with the continuous development of the sea strategy of domestic brands, the quality and performance of domestic cars are getting more and more recognition. China exported 1.069 million new cars in the first quarter of 2023, surpassing Japan for the first time to become the world's largest car exporter, according to auto export data for the first quarter of 2023.

In the face of the menacing Chinese cars, in order to reverse the declining sales, Japanese car companies have adjusted their development direction one after another this year.

Toyota's new president, Henji Sato, has said that through the development of the bZ4X model, Toyota needs to rethink its business structure and establish a new R & D system in China to reverse the decline in the Chinese electric vehicle market. And in April, Toyota set up a new department to focus on the development and production of pure electric vehicles, with a goal of producing 1.5 million electric vehicles a year by 2026.

Honda China also adjusted its organizational structure and internal personnel at the beginning of this year. For example, the newly established electric enterprise development headquarters, aiming at the Chinese market, Honda combines the functions of production strategic planning and production technology planning to strengthen the strategic operation system in China's production field.

However, indulging in the comfort zone for many years, the process of this transformation must be painful for Japanese car companies. At the moment of the same day in the auto market, Japanese car companies are "slow" from the top down. There is no doubt that they will lose more market opportunities.

Although China has entered a period of rapid recession, and domestic cars have begun to dominate the domestic market, it is undeniable that Japanese cars still occupy an absolute advantage at the global level, so autonomous car companies should keep up their efforts to win more market share when their competitors are "at a loss."

This article comes from the official account of Wechat: zinc Finance (ID:xincaijing), author: Lu Shiming

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