Japan | Power Systems Research

2025-06-22

What Will Happen in Hino, Mitsubishi Fuso Merger?

Hino Motors and Mitsubishi Fuso Truck and Bus Corporation have reached a final agreement to merge their operations in April 2026, but what will this mean? A basic agreement was initially reached in 2023, but the decision was delayed due to irregularities in Hino’s engine performance certifications. The merger will finally move forward following Hino’s settlement with U.S. authorities.

The commercial vehicle industry has undergone rapid changes over the past two years of stalled negotiations, so both companies will need to quickly demonstrate the benefits of the merger to make up for lost time. The biggest change is the tightening of environmental regulations.

In May 2024, the European Union (EU) strengthened CO₂ emission regulations for large trucks. By 2030, emissions must be reduced by 45% compared to 2019 levels. This is an increase from the previous target of 30%. By 2040, emissions must be reduced by 90%, a very strict requirement.

Categories: Commercial Vehicles, Japan, Mergers & Acquisitions, Passenger Cars, Minivans, and SUVs, Production

Office: Japan Office

South Korea’s LG Energy Withdraws Expansion Plans

Akihiro Komuro

LG Energy Solution, a major company in South Korea, has withdrawn its investment plan for a materials factory. The company cited a slowdown in the electric vehicle (EV) market and a diminishing competitive advantage in Indonesia, where nickel is widely produced, as reasons for the decision.

Battery production involves processes from material manufacturing to productization, and the withdrawn plans included the construction of a nickel smelter for the main cathode material, as well as the production of cathode precursors and other materials.

Categories: Batteries, EV, Japan, Production

Office: Japan Office

2025-05-25

Komatsu Reports $650 Million USD Impact of US Tariffs

Akihiro Komuro

Komatsu announced that its consolidated net income for the fiscal year ending March 2026 is expected to decrease by 30% year on year to 309 billion yen. This is lower than the market forecast of 403 billion yen. The U.S. administration’s tariff policy will have a negative impact of $650 Million USD (94.3 billion yen). The exchange rate assumption of 1 yen = 135 yen (compared with 152.8 yen in the previous fiscal year) is also a factor, as it reflects an appreciation of the yen by approximately 8 yen compared with the current market rate.

Of the 943 billion yen, 785 billion yen is attributable to increased production costs due to tariffs, and 158 billion yen is attributable to a decrease in sales volume due to reduced demand.

Categories: Economics, Financial, Japan, Tariff

Office: Japan Office

Japan Engine Conducts Final Tests on Ammonia Marine Engine

Akihiro Komuro

Japan Engine Corporation, a manufacturer of marine engines, says it has begun final testing of a new engine that uses a fuel mixture of ammonia and heavy fuel oil. The testing involves running the engine alone in a factory to confirm safety and to check for abnormal behavior. Testing is expected to be completed by September, with production planned to begin in October.

The large, low-speed marine engine developed by the company can burn up to 95% ammonia (by heat ratio) mixed with heavy fuel oil. The engine used in this trial will be installed in an ammonia carrier ship currently under development with Nippon Yusen and others. The ship is expected to be completed in fiscal 2026.

Categories: Alternative Power, Japan, Production

Office: Japan Office

2025-04-20

KG Motors To Mass-Produce Ultra-Compact EVs

Akihiro Komuro

KG Motors, which manufactures and sells the ultra-compact “mibot” EV, is moving toward mass production of the units. It will start mass production in October 2025 at an assembly plant it has built near its headquarters. The company plans to produce 300 units in FY2025, 3,000 units in FY2026, and 10,000 units in FY2027.

The mibot is a one-person vehicle designed for short-distance travel, with a range of 100 kilometers per charge. The planned price at the time of mass production is 1.1 million yen ($7,700 USD), including consumption tax.

The assembly plant in Higashi Hiroshima City consists of a single production line with a main line of seven processes and a subline of four processes. Since there are only a few parts, the number of processes is less than that of a normal automobile production line.

Categories: Electrification, eMobility, Japan, Passenger Cars, Minivans, and SUVs, Production

Office: Japan Office

Honda To Launch Electric Motorcycles in Vietnam

Akihiro Komuro

Honda plans to launch an electric motorcycle in Vietnam this month. The suggested retail price is less than 29 million VND (about $1183) without battery. The company is targeting the younger generation, who often use motorcycles to commute to school.

The name of the motorcycle to be sold is “ICON e:”. It will be manufactured at the company’s Binh Phuoc plant in northern Vietnam and will initially be sold through authorized dealers in seven provinces and cities. The maximum speed is 48 km/h, and it takes about 8 hours to charge the battery from zero to full. The maximum distance that can be traveled on a full charge is 71 kilometers. Because it does not require a driver’s license, which can be obtained at age 18, it is expected to be used by high school students on their way to school.

Categories: Electrification, Japan, Motorcycles, Production, Recreational Products, Vietnam

Office: Japan Office

US Tariffs Could Hurt Japan GDP

Akihiro Komuro

On April 12, as I write this, things are still in flux. There is a lot of media coverage every day, with reports on the tariffs reaching almost hysterical levels. The reciprocal tariff rate for Japan announced by the U.S. is 24%, which is an unexpectedly high level given the past relationship between the two countries.

As a result, Japan’s real GDP is expected to fall by about 0.6% in the short term (2025) and 1.8% in the medium term (2029). This will have a huge impact on Japan, which has maintained a growth rate of around 3% per year. It has been reported that Japan is currently negotiating with the Trump administration, but it is doubtful whether the current Japanese government will be able to negotiate effectively with the US. We will see whether the terms will be reconsidered after the negotiations in the future.

I would just like to point out one thing: President Trump talks about Japan’s failure to buy American cars as unfair and negligent, but this is a clear mistake. It is true that American cars do not sell well in Japan. GM is the only company with a formal dealer network in Japan, and it is even hard to find GM dealer shops in Japan. Chrysler pulled out in 2018 and Ford in 2016.

Categories: Economics, Japan, Tariff

Office: Japan Office

2025-03-20

Kubota Plans Tractor Plant in India, Doubling Production

Akihiro Komuro

Kubota plans to build a tractor factory in India, open that will be operational by 2030. The investment is expected to be in the tens of billions of yen. The annual production volume will be increased to approximately 240,000 units, double the current volume.

India accounts for about half of the global tractor market in terms of volume, but Kubota’s market share in the country is only about 25%. The company aims to increase sales by developing new products in cooperation with the local manufacturer it has acquired.

Currently, it produces about 120,000 units a year at three factories, including Escorts, which it acquired in April 2022 for about $953,020,000 USD (140 billion yen). Its production capacity is 170,000 to 180,000 units, but it is expected to fall short of that in the next five years.

Categories: Agricultural, Indian Subcontinent, Japan, Production

Office: Japan Office

2025-02-24

Kanadevia To Build Plant for Hydrogen Equipment

Akihiro Komuro

Kanadevia (formerly Hitachi Zosen) said it plans to build the first mass-production plant for water electrolysis equipment, which produces hydrogen by electrolyzing water, in Yamanashi Prefecture.

A company announcement said, “We want to develop this as an important production base that contributes to the realization of a hydrogen society. The company will invest approximately 8 billion yen ($52,000,000 USD) to build a mass production plant for water electrolysis equipment with an annual production capacity of 1 gigawatt (157,000 tons of hydrogen produced).

Construction is scheduled to begin about June 2026, with completion and operation by the end of fiscal 2028. The company plans to position this as a domestic mother plant, and in the future, it envisions gradually expanding its hydrogen production equipment manufacturing bases both in Japan and overseas.

Categories: Alternative Power, Fuel Cells, Hydrogen, Japan, Production

Office: Japan Office

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