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

In the Chinese auto market, sales of Japanese cars are declining at an alarming rate.

As early as 2020, one out of every four cars sold in the Chinese car market was a Japanese car. Today, however, Japanese cars have lost nearly 1/3 of their market share. Sales of Japanese car companies have also been hit in some overseas markets except China.

Why did the once-beloved Japanese car come to where it is now? Is it because Japanese car companies don't work hard?

Of course not. Among the Japanese car companies, there are many excellent car companies, whose technology has been iterated all the time, and the research and development of new models is also very fast. Toyota, in particular, has become the number one car company in the world in 2022.

As a matter of fact, there are signs of decline in Japanese cars. This paper will analyze the internal and external causes of the signs of decline of Japanese cars from the perspective of Japanese car companies, Japanese local market and global market.

Japanese car companies are in the dilemma of innovators Clayton Christensen, a famous professor at Harvard Business School in the United States, once analyzed why those good companies could not stay ahead or even fail in his book the dilemma of innovators.

For example, the famous Kodak Company, which used to be the world's largest manufacturer and supplier of imaging products and related services, operates in more than 150 countries and regions and employs about 80,000 people worldwide. However, even such a good company filed for bankruptcy protection in 2012.

The main reason is that Kodak did not realize the rapid development of digital technology, did not carry out strategic transformation in time, so that the square inch chaos, and finally fell down heavily in the face of the digital wave.

Ironically, however, the world's first digital camera was invented by Kodak camera engineer Steve Sasson in 1975. It was Kodak's own digital camera technology that eventually became the driving force behind Kodak.

The same example occurs in the computer industry. Before that, the computer industry was mainly based on mainframe computers. IBM is a well-deserved giant in the industry, but because it pays too much attention to the mainframe computer market, it ignores the rise of microcomputers.

You know, the mainframe computer at that time was a highly integrated technology product, and the price was not cheap, so it was often accompanied by a "sacrosanct" image, stored in a clean room, surrounded by smooth glass walls, and the staff were dressed in white coats, just like hospital nurses waiting on patients.

It was not until the emergence of DEC, the king of minicomputers, that people realized that there were still such small and cheap computers in the world. However, at that time, IBM did not take this little guy seriously, because its performance was so inferior to that of mainframe computers, but IBM ignored two things:

1. The performance of the computer can be continuously increased.

two。 Many companies may not need such strong performance.

In the end, General data, Prime, An Wang computer, Hewlett-Packard and other enterprises quickly joined the market, the microcomputer market was opened, and IBM also lost a lot of markets.

In turn, these companies missed the desktop PC market and eventually left the desktop PC market share to Apple, Commodore and other companies, but most of the companies focused on desktop PC were eventually defeated by emerging notebook companies.

In the above cases, digital cameras, microcomputers, desktop PC, notebook computers and so on are all destructive technologies. When they appear, even companies that are very leading in the industry cannot escape sanctions. And these companies also have one thing in common, that is, they either ignore or resist destructive technologies.

Back to the theme of this article, Japanese car companies, "the dilemma of innovators" seems to be more intuitive.

You know, there is no shortage of excellent Japanese car companies. Toyota, for example, ranks first in the world in terms of sales for several years in a row, its fuel technology is constantly upgrading, its hybrid technology is also constantly iterating, and some of its models have become synonymous with easy driving and fuel saving, no matter how you look at it. Is a very good enterprise.

However, under the sweep of the new energy wave, Toyota has also fallen into the dilemma of innovators.

As we all know, Toyota President Akio Toyoda resisted the arrival of electrification. He believed that "the ultimate outcome of many electric car companies is demise, and countless funds will be wasted." former Toyota president Takehi Uchiyamada also believes that "the era of all electric cars will not come, hybrid cars and plug-in hybrid vehicles will become the mainstream for a long time."

And other Japanese car companies, their products are mainly fuel-based, pure electric models are very few, and their technology and experience are not the slightest difference from Tesla and Chinese car companies.

The end result is clear to everyone: Chinese car companies are overtaking at the corner in the new energy sector, while Japanese cars are losing market share in China.

Thus it can be seen that the root cause of the decline of Japanese cars is not electric cars, but that Japanese car companies have failed to break through the industry shackles of "innovators' dilemma" and have lagged behind in the era of electric cars.

The market cannot be predicted. Why do Japanese car companies step into the "innovator's dilemma" like orangutans throwing darts?

In the book "Innovator's Dilemma", it summarizes five reasons why a good company will fall into an innovator's dilemma, which is also applicable to Japanese car companies.

The first point is that the distribution of enterprises' resources depends on consumers and investors.

You know, although for an enterprise, it is the executives who are responsible for decision-making, but their decision-making basis is completely inseparable from investors and consumers.

Japanese car companies, such as Toyota and Honda, have made remarkable achievements in the field of fuel vehicles, and they have countless users, and in the distribution of resources, they will try their best to meet the needs of consumers and investors. what they think about is how to improve the thermal efficiency of fuel vehicle engines, how to improve their three major technical barriers, and be responsible for the existing user market and capital market.

The second point is that large enterprises have high limitations.

Such as Toyota, Honda and other Japanese car companies, the construction of their internal automobile industry chain has been very mature, a large number of labor, cash, technology and so on are on the basic plate of fuel vehicles, which means that when opening up new markets, these enterprises have strong limitations.

Previously, the author mentioned in the article "EV parts suppliers, withered ones, employment and maintenance suppliers" compiled by the author that there are 7500 first-tier suppliers of parts directly to Japan's domestic automobile enterprises, and 10, 5000 secondary suppliers to Japan's domestic automobile enterprises.

Once the comprehensive transformation of electrification, most suppliers will lose the meaning of existence, especially as internal combustion engine enterprises and workers, will be strongly affected by electrification. In this case, it is impossible to ask Japanese car companies to give up the basic market and open up a new market.

The third point is that technology supply is not equal to market demand.

You know, almost all destructive technologies cannot meet the needs of the market at the initial stage. As mentioned earlier, the microcomputer was not recognized by too many users at the beginning, because its performance is much worse than that of mainframe computers. this has led many big companies to think that disruptive technologies are just a flash in the pan and cannot upend the entire industry.

In the field of new energy vehicles, this law is also followed. For example, Toyota, the leader of Japanese car companies, actually set up electric cars a long time ago, even earlier than we do.

As early as the 1980s, Toyota launched a small pure electric vehicle called the EV-10 to EV-40 series. However, at that time, the level of motor and battery was so poor that it was almost difficult to meet the needs of most users, so these electric vehicles were usually small and short-lasting, and could only meet the short-distance travel needs of a very small number of people.

Toyota then launched the RAV4 EV, a truly mass-produced pure electric car equipped with a 27kWh Ni-MH battery pack with a range of up to 153km and a top speed of up to 126km/h.

Although there were forward-looking configurations such as electronic air conditioners and electric brake pumps on the RAV4 EV, the car was not competitive from the point of view of consumers at that time.

First of all, there are still many problems in battery technology, such as high cost and slow charging, and secondly, the service life of its 153km is not enough at that time, short-distance travel can also be considered, and once faced with long-distance travel, its longer charging time and short battery life are doomed to miss the word "convenience".

So by 2003, only about 1900 cars had been sold, which was a far cry from Toyota's mainstream fuel vehicles and obviously could not meet the market demand.

The fourth point is that small markets cannot meet the growth needs of large enterprises.

Again, almost all destructive technologies fail to meet market demand at the initial stage, which has led to the neglect of many large enterprises.

Even the RAV4 EV, an electric car built by Toyota in the last century, did not sell well, which meant that the electric car at that time was a small market, with less than a fraction of fuel cars, and very few users were willing to pay for it, so Japanese car companies could be forgiven for neglecting electric cars.

The fifth point is that it is impossible to analyze the market that does not exist.

This is also the most important point. We usually think that giants such as Kodak, IBM, Apple and other giants will have insight into all industry winds.

However, it turns out that they are not out of the industry curse, such as Kodak ignoring digital cameras, IBM ignoring microcomputers, Apple ignoring laptops, and many other examples, such as Nokia ignoring smartphones and so on.

One of the most important reasons why these big companies ignore emerging destructive technologies is that they are simply unable to analyze markets that do not exist.

Perhaps many people will say that I have predicted many markets, and they are all good in the end. I can only say that you still predict less, even among the best venture capital companies in the world, there are many cases of investment failure. the key is that they have a huge amount of money and can bring a very high fault tolerance rate.

Because if the idea of a system is fixed, and you can analyze all variables and fully understand how variables interact with each other, then the system is of course predictable. However, the market is full of uncertainty, there are a variety of variables, and will be affected by a variety of bizarre.

The so-called prediction is to rely on the experience of analogy, after a large number of cases, found what they think of the common logic, to put it bluntly, is to gamble, or to put it bluntly, to rely on "beguiling".

In 1973, Burton Malkiel, an economist at Princeton University, made a startling conclusion in his book Walk on Wall Street: "Let a blindfolded gorilla throw darts to select stocks. Its final performance will not be inferior to the portfolio performance selected by experts."

This means that unless you are lucky enough to be the lucky one, you can never beat the market.

Seeing this, let's go back to the perspective of Japanese car companies at that time. At a time when fuel vehicles are selling heavily, fuel vehicle users are gradually increasing, and the fuel vehicle market is hot, give up their industrial chain advantages, technical advantages, and personnel advantages in the fuel vehicle market. Turn around and bet on the electric car market with short flights, slow charging, high prices and poor sales. What would you do if you were a Japanese car company? Will it be transformed unswervingly? Will you give up your existing advantages and layout a market with a success rate similar to that of "gorillas throwing darts"?

I think the answer for most people is no.

Therefore, many people on the Internet laugh at Japanese car companies, thinking that as the first batch of enterprises to layout electrification, they have moved so slowly in the electrification transformation, in fact, it is only because we stand from the perspective of God.

Perspective shift, losers become winners once Japanese car companies, ignoring the electric car market, and now, Japanese car companies are still a late group in the electrified transformation.

But the real reason is that we look at things differently from Japanese car companies.

You know, Japan has a very low rate of energy self-sufficiency due to its geographical location. For a long time, more than 80% of Japan's primary energy demand needs to be imported.

In 2019, Japan's external dependence on oil, liquefied natural gas and coal was as high as 99.7%, 97.5% and 99.3% respectively. The rate of energy self-sufficiency is extremely low and is very dependent on imports, especially supplies in the Middle East.

And Japan's overall energy structure is basically occupied by these three, as high as 89.8%. However, these three are the main sources of electricity in Japan, resulting in very expensive electricity prices in Japan. At a time of energy shortage, electricity prices in Japan are rising one after another.

According to the electricity price statistics of a website, in March 2023, the average electricity price in Japan has exceeded 1.5 yuan one degree. In China, it is less than 0.55 yuan per kilowatt-hour, which is about 1/3 of the electricity price in Japan.

This means that it is an impractical problem to vigorously develop electric cars in Japan, where electricity prices are high. Especially in the current global efforts to achieve carbon neutrality, Japan uses imported fossil fuels for energy generation, which will also cause a lot of emissions, which is also contrary to the original intention of energy saving and emission reduction of electric vehicles.

Under such circumstances, it is more appropriate for Japan to insist on fuel-efficient cars and carry out the fuel-saving route to the end. Especially nowadays, Japan has made great efforts to develop gas-electric hybrid models, which will save fuel to the extreme.

For example, the Toyota Corolla twin-engine version of the 100-kilometer comprehensive fuel consumption has been as low as 3.5L, in terms of comprehensive energy consumption, compared with the current popular mixed models.

Therefore, from the point of view of the Japanese people, gas-electric hybrid models are the real new energy they understand, while trams have nothing to do with energy conservation and emission reduction.

So you see, when the perspective changes, we will find that Japanese car companies have not lagged behind in the wave of electrification, but also found the optimal solution.

So, there is no need for Japanese car companies to develop electric cars?

Of course not. You know, after all, Japan is a small country with a small population, which simply cannot support the sales of Japanese car companies. However, the main sales of Japanese cars are still concentrated overseas.

The above picture shows the global sales of five mainstream Japanese car companies, and you will find that the share of the local market in Japan is not large, mainly in North America, Europe, China and other markets. Even if there is no strong demand for electric cars in Japan's local market, this is not the case in other markets, especially in China, the United States and Europe, where new energy penetration is increasing, and Japanese car companies obviously will not give up this huge cake.

Thus it can be seen that even after the change of perspective, the layout electrification is still the only way for Japanese car companies. Can the car company still succeed that day?

The "ant" on the "hot pot" the author believes that the layout of Japanese car companies is actually very difficult. Because with the rise of new energy car companies in China and the United States, Japanese cars with slow transformation have become "ants" on the "hot pot".

To sum up in a word, the trend of the world automobile industry is electrification. Chinese car companies, Tesla, and even Hyundai and Volkswagen are all in a radical transformation, and Japanese car companies have to change, but without technology accumulation, they can only be in a hurry.

As mentioned earlier, the main sales of Japanese car companies are concentrated overseas, and now in many overseas markets, Japanese cars are also facing a variety of shocks.

As can be seen from the above picture, among the overseas markets, the largest markets for Japanese cars are the Chinese market, the North American market and the European market. The scale of Japanese cars in this primary market exceeds 13 million, followed by the Middle East, India, ASEAN and South America. Sales in this primary market exceed 5 million.

In the first-tier market where China, the United States and Europe are located, the penetration rate of new energy is rising rapidly. Needless to say in the Chinese and American markets, Chinese car companies and Tesla have eaten up a large market share. In the European new energy market, in addition to Tesla, Volkswagen, Renault, Peugeot, Hyundai-Kia and other car companies are also very active.

The second-tier markets in the Middle East, India, ASEAN, and South America are even more popular destinations for Chinese car companies. Chang'an, Geely, Great Wall, and BYD have all begun to build factories one after another, and Tesla's new energy vehicles are also frequently exported to ASEAN. Japanese cars are obviously under great pressure.

For example, in Thailand in ASEAN, 90% of the cars in the market used to be Japanese cars, but now Chinese car companies are entering the Thai market one after another, and the share of Japanese cars has also been seriously squeezed.

For example, the Indonesian market, which also belongs to ASEAN, sold a total of 124000 electric cars in 2022, of which nearly 100000 were owned by China's Wuling.

In the case of the crazy expansion of Chinese car companies and Tesla, Volkswagen, Hyundai-Kia and other companies have followed, how much share of late-developed Japanese cars can seize in the new energy market?

What's more, the development of new energy vehicles is very clear now. Either, like the United States, they master high-tech advantages such as intelligent technology and chips, or they firmly control processing and manufacturing in their own hands, as China does, both of which constitute a complete "smile curve."

Now, the United States is frantically mending the chain, and China is building the advantage of the whole industry chain through economies of scale, moving towards both ends of the smile curve.

Let's see what's in Japan.

First of all, Japanese car companies, as the forerunner of electrification, ignored the electric vehicle market because they fell into the "innovator's dilemma". In the electrified transformation, they have been the representatives of slowness.

Secondly, the core technology of electric vehicles is not in the hands of Japan. In terms of batteries, most of the market share of the power battery market is occupied by Chinese companies, while Panasonic is the only Japanese company in the top 10 in the world. Let's take a look at China. In terms of lithium ore in the upper reaches of the power battery industry chain, China has gone out to sea early to grab ore, cathode materials, electrolytes, diaphragms and other fields, and China has all achieved the world's leading position.

In terms of intelligence, Japan has missed the Internet tide, resulting in its Internet industry is very backward, intelligent ecology is very weak, in intelligent driving, intelligent cockpits, cars and other fields have been completely opened the gap between Chinese and American car companies. In addition, its country's population and land resources are destined to fail to engage in economies of scale like China.

Thus it can be seen that with the development of electrification, Japanese cars are doomed to have a difficult time in other first-and second-tier markets, except for the solid basic market of the domestic HEV market.

The times abandon you, even the greeting will not hit the decline of a great enterprise, will not be caused by individual reasons, nor can it be clearly explained in an article. This article only talks about the author's own views.

In the first and second part of this paper, from the point of view of Japanese car enterprises, the author analyzes the reasons why Japanese car companies ignore electrification. Japanese car companies are caught in the "innovator's dilemma". We all know that an excellent enterprise can not rest on its laurels. We should always maintain a sense of crisis and take the initiative to change, but it is difficult to do it.

Take the new media industry where I work as an example. In the early years, Baidu, UC, Toutiao and many other self-media platforms were on fire, and countless enterprises made a lot of money by relying on the wool of the platform, but when the official Wechat account rose, how many enterprises really achieved the transformation and were not eliminated by the times?

When countless new media companies reached their peak by making Wechat official accounts, video platforms such as Douyin, Kuaishou and bilibili suddenly appeared again. How many companies can transform from new text media to short video media? After communicating with the former colleagues of food, emotion and entertainment new media, the author found that very few enterprises can attach importance to these "destructive technologies" at the beginning, and even fewer can complete the smooth transformation.

Many smaller "light" new media companies are still so difficult to transform in the face of "destructive technology", not to mention the "elephant" of Japanese car companies with millions of people in the industrial chain.

In the third part of this paper, from the perspective of Japan, the author analyzes the inevitability of Japanese car companies to firmly develop hybrid route, as well as the necessity of developing electrification. The above can be summarized as the internal cause of the decline of Japanese cars.

In the fourth part of this paper, from a global point of view, the author analyzes the external causes of the signs of decline of Japanese cars, that is, the rise of Chinese and American electric cars, which lays the groundwork for the decline of Japanese cars in overseas markets at all levels. Finally, it is concluded that Japanese cars will keep the basic set of local HEV, but in other primary and secondary markets, it will be difficult to fight, not as good as before.

Many people may say that even if there is a recession, sales of Japanese cars are still strong, not to mention that Toyota is the world's top-selling car company in 2022, and its fuel-fueled vehicles are the most fuel-efficient and economical in the world.

In fact, the author thinks so, but don't forget that Kodak, mentioned at the beginning of this article, was still the best film in the world on the day of bankruptcy.

Unfortunately, times have changed. When times abandon you, they often don't even know how to say hello.

The decline of Japanese cars has become inevitable. fortunately, even in the rapidly electrified Chinese market, the penetration rate of new energy vehicles is less than 40%, while other secondary markets are even slower. after all, new energy vehicles still need a good ecological environment, such as the construction of energy facilities, consumer acceptance and so on, and these can squeeze out a lot of electric development time for Japanese car companies.

We often say that "the best time to plant a tree was ten years ago, followed by now." now many Japanese car companies are also starting a transformation to cope with their struggle in the primary and secondary overseas markets.

The difference is that their transformation is indeed relatively late, but the good news is that it seems to be too late.

This article is from the official account of Wechat: automobile News Agency (ID:automobile-news), by Cheng Yu.

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