JAPAN REPORT
The Japanese market in 2022 will be greatly affected by two factors: COVID-19 in its third year and the semiconductor shortage. Despite this, companies are making steady progress in their approach to the industrial issues of the environment and safety, and in particular, the full-scale development of EV products is positioned as a major step toward the realization of carbon neutrality by 2050. The launch of EVs in the Japanese market in 2022 will be on an unprecedented scale.
Nissan will start selling its new model “ARIA” at the beginning of the year. Nissan and Mitsubishi are also jointly developing a mini-EV which they plan to launch early in 2022. Toyota and Subaru will also gradually roll out their first jointly developed SUV in Japan and overseas markets starting in mid-2022. Toyota’s “bZ4X” and Subaru’s “SOLTERRA” are the best-selling mid-size SUV EVs globally and will be the touchstone for future EV development. Honda will launch its first two Honda-brand EVs in China in the spring of 2022. These are also SUVs and will be marketed under the name “e:NS1” by Dongfeng Honda and “e:NP1” by Guangqi Honda, both of which are local joint ventures, and will be considered for export from China to global markets.
In Japan, where high-performance HVs are favored, it is still difficult to increase sales of EVs at a rapid pace. In order to break through this situation, the government is expanding the subsidies for new EVs in the FY2022 budget. The subsidy will be doubled to a maximum of 800,000 yen for models that meet certain conditions, such as having an external power supply function. These subsidy expansion measures were also included in the FY2021 supplementary budget and have already been applied.
The new car market will continue to be uncertain in 2022: the first half of the domestic new car market in 2021 (January to June) was higher than the same time in 2020, but from July onward, the market failed to reach the same level as 2020. This was due to the significant impact on parts procurement from Southeast Asian countries.
As for semiconductors, some companies believe that procurement will recover in Q1 2022. Suzuki said it does not expect to receive all of its planned supply in fiscal 2022, and some observers believe that the tightness will continue for a long time. It is becoming quite difficult to restore the new car market to the 5 million unit level in 2022.
Source: Response
PSR Analysis: Japan’s domestic auto market is already starting to shrink, and it will become more difficult to develop a growth strategy as the birthrate declines and the number of working people decreases. However, Japanese manufacturers still have a large presence outside of Japan, and I think this article is very good for understanding exactly where Japanese manufacturers are today.
For a long time, Japanese manufacturers have been regarded as lagging behind their foreign counterparts in electrification. The reason for this assessment is that Toyota has been obsessed with PHVs and has not been proactive in EVs. In this context, it was sensational that Toyota unveiled 16 EV models at once in December last year.
The highlights of the press conference:
- 8 trillion-yen investment in electrification from 2022 to 2030
- 4 trillion-yen for EVs and 2 trillion-yen for onboard batteries
- Launch 30 EV models by 2030 (16 models unveiled on the day of the press conference)
- Annual EV sales target is 3.5 million units
- All Lexus cars to be EVs by 2035
- Installation of charging facilities at 5,000 Toyota dealers in Japan by 2025
Considering Toyota’s stance to date, this is a very dramatic announcement, and 2022 may be the first year of EVs for Toyota.
Of course, not only Toyota, but other Japanese manufacturers cannot ignore this trend. The key word is collaboration with other companies. This does not only mean joint development between automakers, but also synergy with sensor manufacturers and electronics companies, otherwise it will be difficult to make up for the gap that has been opened up with foreign manufacturers.
Procurement of batteries, which we have discussed in previous articles, will also be a major issue. The market where a company’s stock price rises simply by announcing its EV strategy is over. From now on, a company will be judged on its profitability, and whether it can turn EVs into profits. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
