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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.
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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.
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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.
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Tadano Electrifies World’s Largest Cranes
JAPAN REPORT
Akihiro Komuro Tadano, a major manufacturer of cranes, has converted one of its crawler cranes, which can lift up to 1600 tons, to electric power. By changing the power source from a diesel engine to an electric motor, the company has been able to maintain the performance of the existing product while reducing CO2 emissions to zero. The company converted its CC 88.1600-1 lattice boom crawler crane to electric power. This is a large crane equipped with crawlers instead of tires, and is used in plant and bridge construction, as well as wind power installation.
The electrified crane is connected by cable to the main unit and power supply equipment, and two 390-kilowatt electric motors drive the hydraulic pump. There are no CO2 emissions during operation. Compared to existing products powered by diesel engines, this crane will reduce CO2 emissions by approximately 55 tons per year. The crane itself will be manufactured in Germany, while the electrification equipment will be produced in Japan. The crane is expected to go on sale in the summer of 2025 as part of the company’s EVOLT line of electrified products.
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Thoughts About FCVs and Hydrogen Stations
Akihiro Komuro I traveled recently in the Toyosu area of Tokyo, an upscale residential area, and while there I stopped at a Hydrogen refueling station. While there, I spoke with one of the station’s staff, and I found his comments interesting.
He told me that the only FCVs on the market in Japan are the Toyota MIRAI sedan and Crown FCEV. Honda used to sell the Clarity FCV, but it has been discontinued and few are seen on the road. There are also no FCVs in trucks. There are about 80 hydrogen buses in Tokyo, but they don’t stop at this station because there is a hydrogen station is in the bus company’s office.
On weekends, maybe four or five cars come to the station each day, but on weekdays there are often days when not even one car comes. It’s very quiet. Filling up with hydrogen requires a person with a national qualification, so it’s not possible to operate it like a self-service gas station.
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Hitachi Demonstrates Ultra-Large Electric Dump Truck
JAPAN REPORT
By Akihiro Komuro, Research Analyst, Far East and Southeast Asia
Akihiro Komuro Hitachi Construction Machinery said it is demonstrating a rechargeable all-electric dump truck at a mine in Zambia. It’s the world’s first demonstration of an ultra-large machine with a payload capacity of 200 tons.
Operating conditions and battery life will be verified over a one-year period. The original plan was to have the system in operation by the end of 2024, but the company now plans to launch it in 2025 or later.
The overhead wires will be installed along the mine’s route and the battery will be recharged as it travels along the route. This system allows for more efficient operation than recharging at stops. The batteries mounted on the vehicle body will also be lighter, increasing the payload capacity of the dump truck.
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Kubota Unveils First Fuel Cell Tractor
JAPAN REPORT
Akihiro Komuro On March 28, Kubota unveiled the first prototype of a fuel cell-powered tractor. Although no release date has been set, the company will consider installing fuel cells in unmanned, automated tractors. Kubota is also developing battery-powered agricultural equipment, but the company believes that hydrogen-powered fuel cells will be effective for medium-large sized agricultural equipment.
Kubota is rushing to commercialize fuel cells because it believes demand will grow in developed countries such as Japan, Europe and the United States as a result of the trend toward decarbonization. The prototype machine has about 60 horsepower and has three hydrogen tanks installed above the cabin, which are used in Toyota’s Mirai fuel cell car. It generates electricity by reacting hydrogen with oxygen to power the engine. In the experiment, a tractor was equipped with a plowing unit to till the soil.
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Toyota and Chiyoda Develop Hydrogen Production System
JAPAN REPORT
Akihiro Komuro Toyota Motor Corporation and Chiyoda Corporation have announced the joint development of a hydrogen production system. The two companies plan to begin demonstration tests at Toyota’s main plant in fiscal 2025 and hope to begin marketing the system around fiscal 2027.
The system will produce hydrogen by electrolyzing water. It will have an output of about 5 megawatts and will be able to produce about 100 kilograms of hydrogen per hour. The new plant has a footprint of 6 meters wide by 2.5 meters deep, about half the size of a typical plant. By linking multiple plants, the production volume can be significantly increased.
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2023 Domestic MC Shipments Increase 4%
JAPAN REPORT
Domestic motorcycle shipments increased for the first time in two years to 376,720 units in 2023, up 4% from the previous year. Class 2 mopeds, which have relatively low maintenance costs, performed well, increasing 47% year-on-year. The shortage of semiconductors and the easing of logistics disruptions also contributed to the increase in shipments.
Class 1 mopeds (50cc and below) fell by 29% to 92,824 units. Class 2 mopeds (over 50cc and under 125cc) were up 47% to 149,655 units, light motorcycles (over 125cc and under 250cc) were up 16% to 66,630 units and small motorcycles (over 250cc) were down 6% to 67,611 units.
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Honda To End Mass-Produced EV “Honda e”
FAR EAST: JAPAN REPORT
Honda plans to end production of the Honda e EV by January 2024. This is the company’s first mass-produced EV, but sales have been sluggish, falling short of the annual domestic sales target of 1,000 units. Going forward, the company will focus on commercial light EVs, which will be launched in the spring of 2024, to increase the electrification rate of the vehicles it sells.
The Honda e was launched in 2020. The vehicle is priced at 4.95 million yen and has a range of 259 km (WLTC mode). Sales in Europe have already been discontinued. Sales in Japan will also be discontinued once stocks run out.
The Honda e was not originally intended to be a high-volume model, but it did not meet its sales target. The company plans to expand the model lineup, starting with the N-VAN e:, a light electric vehicle to be launched next year.
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