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Author | Chumen Cao Tingting

The domestic price war has been fought vigorously, but the Japanese car market next door has risen prices one after another.

Honda recently announced that it will raise the prices of its six models in Japan from July 27, up to 5%.

Not only Honda, but also Japanese car companies from the Japanese Big three to Mitsubishi, Mazda and Subaru have raised the prices of their new cars to varying degrees over the past period of time.

This is completely different from the successive declines in domestic new car prices. Since the beginning of this year, both independent brands and joint venture car companies have reduced prices at the expense of profits in order to gain a firm foothold in the domestic market.

Worldwide, price wars are also inevitable. Tesla, for example, recently slashed the prices of some Model S and Model X models in the US market in order to boost sales, and gave away three years of free supercharging service.

Why can't the Japanese car handle it first?

Not only the price increase, some popular cars will stop production directly from July 26 this year, Honda will raise the price of its six models in Japan, the biggest increase is 5%. The price increases are all popular cars, such as our familiar flying, colorful wisdom, Civic and so on.

Source: Honda, the increase of Fido is between 31900 yen and 70400 yen (equivalent to 1600 yuan to 3540 yuan). Civic is 40000-50000 yen (equivalent to 2000-2500 yuan). The highest price increase was Veze, which reached 119900 yen (about 6000 yuan).

Source: Honda this is the second time Honda has adjusted the price of its models this year, and there has been a price increase of 3% of the models sold so far.

Even so, we still need to wait to pick up the car now. Honda said that in the case of capacity constraints, in addition to lengthening the delivery time, the Civic and Civic Type R have stopped taking orders at this stage, and there is even no clear waiting time for the two models.

It is worth mentioning that, according to Japanese media reports, this is the first time in Honda's history that the price of the car has been raised without upgrading. Usually, the price increases of Japanese car companies will be carried out when the models are replaced, so as to reduce consumers' resistance to price increases.

In addition to Honda, Nissan, Mitsubishi and other Japanese car companies have also raised their prices in their own countries.

In April, Nissan raised the prices of its X-Trail, Kicks and Caravan models in Japan by as much as 10 per cent.

Source: the starting price of two versions of NISSAN Qijun is adjusted to 4488000 yen (about 225000 yuan) and 5029200 yen (about 253000 yuan). At that time, Nissan's new car sales in China fell 1.5% in April from a year earlier, the ninth consecutive month of year-on-year decline.

Source: earlier in February, NISSAN, Mitsubishi announced a price increase of up to 6 per cent for two of its models in Japan. Since the beginning of this year, Toyota, Mazda, Subaru and other car companies have also raised the prices of some models one after another.

On April 20, Toyota announced that it would adjust the prices of its Pixis Van and Pixis Truck, starting from July. The price of Pixis Van trucks increased by 3500 yuan to 84374 yuan, and the price of Pixis Truck trucks increased by 3200 yuan to 3500 yuan, with the price range from 48219 yuan to 70831 yuan.

This wave of rising prices of Japanese car companies has formed a strong contrast with the domestic market.

At present, the domestic price war is far from over, and there is a growing trend in the pricing of new cars. Many new cars recently released on the market have revealed the meaning of "low pricing, make friends".

For example, the plug-in hybrid version of Great Wall's tank 500 Hi4-T, which went on sale last night, is officially priced at 335000 yuan, which is consistent with the starting price of the 3.0T fuel version, "the same price for real oil and electricity."

You know, when the 500 Hi4-T version of the tank was pre-sold at the Shanghai auto show, the pre-price also reached 360000, which was reduced by more than 20, 000 in just two months. Obviously, the executives of the Great Wall have made up their minds about the price of the new car.

And BYD, the roll king of "the same price of oil and electricity", even more, responded to the price war by launching the champion version of the dynasty series, which once pushed the price of mixed models to less than 100000.

Weilai, on the other hand, separates the service from the car price, reducing the price by 30,000. From new forces sweeping to traditional car companies, domestic auto market participants are involved in the price war.

For the price increase behavior of Japanese enterprises, many netizens said bluntly that it was "crazy" and thought that there was not enough volume in Japan's domestic market so that there was room for price increases.

However, some netizens believe that it is not a big problem just to raise prices in Japan.

02. Why should the price be reduced because of the disaster caused by raw materials?

At present, there are two reasons, one is the depreciation of the yen, and the other is the rise in raw material prices and logistics costs.

The rise in raw materials is currently the biggest problem encountered by Japanese car companies, not only steel, but also automotive aluminum, copper and lithium, nickel and cobalt, the main raw materials for on-board batteries.

In addition, as an island country, Japan is very scarce in local resources and needs to seek the supply of raw materials and pay for transportation at the same time.

In September last year, Bloomberg reported that seaborne trade prices were also soaring, according to data provided by Clarkson Research Services, the world's largest shipbroker. The daily income of cargo ships carrying cars and industrial machinery worldwide has reached about $80,000, the highest figure since 2000.

Toyota has always been the largest buyer of steel in Japan. According to Japanese media reports, Toyota has reached an agreement with automotive steel to increase the purchase price of steel by about 2000 yuan per ton, but steel prices have risen by another 20 to 30 percent in the past six months, the biggest increase in 12 years.

Source: Toyota also has a direct impact on their profits. Since the price of raw materials began to rise in 2021, Toyota expected operating profit to fall by 440 billion yen, equivalent to 18% of the expected operating profit for the current fiscal year. Honda is expected to be affected by 250 billion yen, equivalent to 38% of its expected operating profit.

Similarly, the impact on Nissan, Subaru, Mazda and Mitsubishi ranges from 37.4 billion yen to 100 billion yen.

As a matter of fact, Toyota's latest financial results for the 2023 fiscal year (April 2022 to March 2023) showed that net profit fell for the first time in four years, down 14 per cent from a year earlier to 2.45 trillion yen, driven by high prices of raw materials such as steel and aluminium.

At the end of last year, due to the rapid rise in the price of lithium carbonate, domestic new energy vehicles also started a small price rise, but soon fought a price war under the leadership of Tesla, and the price of lithium carbonate was also lowered.

At present, although the price of lithium carbonate has been reduced, it has little impact on the Japanese automobile industry, because Japan is still dominated by the oil truck market.

Japan sold 4.385 million new cars in 2022, an increase of 4.0% over the previous year, but new energy accounted for very little, less than 1.3%, and only 54500 were sold.

Source: according to Toyota, in 2022, China's total car sales reached 26.864 million, and the sales of new energy vehicles alone reached 6.887 million, far exceeding Japan's total annual sales, and the domestic new energy market share is as high as 25.6%.

In terms of scale, China's auto market is big enough and has the strength to fight a price war, and there are indeed many car brands. At present, the number of car brands, large and small, has exceeded three digits.

According to the statement of no more than five mainstream car companies in the future, if you don't reduce the share of the volume, you won't be able to get tickets for the next round.

And Chinese car companies have already rolled into the Japanese market. In January this year, BYD launched its first new car in Japan, the ATTO 3 (the domestic yuan PLUS). At that time, many Japanese exclaimed that Chinese cars had reached their doorstep. In order to study the success of BYD, Japan's largest publishing house, Nikkei BP, also specially dismantled BYD seals.

Now that the pressure from the supply chain and Chinese car companies is beginning to spread to the end market, will Japanese car owners buy it?

This article comes from the official account of Wechat: Superelectricity Lab (ID:SuperEV-Lab), author: Chumen Cao Tingting

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