Will Japanese automakers be able to overcome more popular upstarts
Toyota’s enduring edge in Southeast Asia comes from its production capacity within the region, where it makes a number of petrol cars with bigger engines that are popular among local customers. Thailand and Indonesia together accounted for almost 10 percent of the some 11 million vehicles it manufactured in 2023.
And yet in Jakarta, where Toyota cars remain the most visible brand on the capital’s roads, Nissans are now almost an endangered species. Earlier this month, Nissan also reported a sharp downturn in profit fueled by an outdated lineup, elevated spending on sales incentives and a lack of hybrids in North America, leading it to slash jobs and production.
Moreover, BYD ranked as Indonesia’s no. 6 brand by sales last month, after only delivering its first batch of cars to customers in July. Staff at BYD’s flagship showroom in Jakarta said the Seal, a mid-sized electric hatchback that starts from USD40,000, is most popular, no surprise there.
So the dominance Japanese brands have enjoyed for so long is clearly threatend now. So, to fight back, Japanese brands are investing in partnerships and long-term projects to develop in-vehicle software, solid state batteries and other technologies they need to regain the upper hand. Can they, is the real question though.
Earlier this year, Toyota unveiled prototypes of a so-called carbon neutral combustion engine that could help it further improve its hybrid technology. It’s also building its own software platform to rival the luxurious features found in Chinese EVs. This is definitely an uphill battle considering how far ahead China is already.
On top of that, Honda, Nissan and Mitsubishi are all still ironing out a partnership formed this year to collaborate on software and EV infrastructure. Given hoe Toyota has been somewhat hesitant to go EV and instead was banking on bybrids for so long, the fact that these other 3 brands disagree is alarming, but if you can’t beat them, join them I guess.
The strategy is paying off, at least for now, in North America, where a downturn in EV growth over the past two years has seen a resurgence in the popularity of hybrids, a technology pioneered by Nissan and Toyota. However, here in Asia, ehere Indonesia and Malaysia happen to be, the EV craze is still alive and well.
Strangely, in China, the EV capital of the world, that approach is costing them dearly. Much like the West, the EV fad is over and people are finally seeing the unspoken problems all EVs seem to entail and would rather stick with the devil they know, that being ICE and hybrids since they are far less problematic and cheaper in the long run too.
