Japanese cars, heading for suicide?

True behind closed doors.

Wen 丨 Hua Shang Tao Li Liu Zhongyuan

The Japanese car, which was once the world's number one, is losing this world.

In China, the two major markets in the United States, Japanese cars have lost their dominance; in the struggle between new energy and fuel vehicles, the Japanese auto industry is facing a terrible industrial replacement.

In the 1980s, how to defeat Japan was a prominent example of the American auto industry. But this discipline has been replaced by another discipline: why japanese cars have failed.

【01】

The signs came in 2016.

That year, in the Chinese market, which has always been soaring, the total sales volume of Toyota, Nissan and Honda, the top three Japanese companies, was less than that of Volkswagen in Germany.

The japanese brand has since begun, not only in China, the United States, but even in Japan.

In 2021, during the peak sales season of the "Golden Nine and Silver Ten", Japanese car brands lost in the Sino-US and Japanese markets at the same time.

In Japan, Honda's sales fell by nearly 50% in October 2021, and Toyota, the strongest, fell by 42.2%.

In the Chinese market, from August to October, Toyota fell by 11.9%, 35.9% and 19% respectively. Honda's sales also fell by more than 30%.

Many people attribute the decline in Sales of Japanese cars to an across-the-board decline caused by a global shortage of automotive chips. But the data doesn't support this: while Car sales in Japan are falling, sales of new energy vehicles continue to grow in the Chinese market, up 141% year-on-year in October, with Tesla the most ferocious of them.

Tesla Model Y sales in China surpass all fuel vehicles in the same price class. The models it produced in Shanghai were exported to Japan and Europe, which was originally the land of Japanese cars.

On the track of new energy vehicles, Japan is also a loser. Throughout 2020, Toyota, which swept the world in the era of fuel vehicles, only sold 11,000 electric vehicles, accounting for less than 0.6% of the world.

By 2021, in the January-November China new energy car sales rankings, there is not a single Japanese car in the top 20.

Tesla's attack, accompanied by the heavy blows and even annihilation of Japanese cars - in March 2022, Honda's Acura completely withdrew from the Chinese market.

From the world's greatest to the most out of the world, what has happened to Japanese cars?

【02】

The earliest rival of Japanese cars was the United States. The attack and subversion of the US auto industry was first initiated by Toyota.

Toyota struggled in Ford's shadow at a time when Ford's management philosophy was in vogue, and 1950 was its life-and-death year.

This year, Toyota Eiji was sent to Ford for a three-month expedition. Returning to Nagoya, Eiji Toyoda discussed a question with Aiko ono, a talented engineer who would later develop: How will Japan produce cars?

As a result of the discussion, Japan needs a small batch of multi-variety production methods compared to the operation method of the Ford assembly line in the United States.

As a result, Ōno Started Toyota's Production Method. The essence of Toyota's emphasis on lean, automated, and standardized production lies in reengineering processes and reshaping supply chains, lean operations.

Compared to Ford's big industrial philosophy, this is a management advance. There is an image of this mode of production - "wring out the last drop of water on the towel".

In addition to the improvement of management philosophy, Toyota also has a background of the times as a boost: the outbreak of the Korean and Vietnam wars, creating a war market that requires huge resources. The United States, as the general purchaser of global industrial supply chains, helped Japan quickly regain its industrial base.

Within Japan, the government has promoted mandatory auto tariff support and circulation restrictions, and also in the form of infant industrial protection, so that Toyota and other companies in the same industry have obtained a good development environment.

The Americans miscalculated an account and gave orders to Japan, which could indeed improve overall efficiency and reduce costs, but also cultivated a terrible opponent for themselves.

The general managers of the U.S. auto industry soon discovered that Toyota and other car companies that had completed their development had driven the battlefield to the United States.

In terms of product path, Japanese cars are not simply American copycats, but make a big fuss about the handling, power and economy of the car.

The emphasis on high-horsepower "muscle violence" has always been the general aesthetic of American car companies. But the high horsepower brings a large displacement, and the resulting exhaust emissions and the consumption of gasoline have caused a big wave in American society. For a time, there was also a great discussion about the truth about whether the automobile is the main source of pollution in the city.

After photochemical smog incidents, air-water experiments against exhaust gases, and government legislation, cars are finally regarded as the number one public enemy of the environment.

However, the auto giants in the United States are not willing to accept this conclusion, nor are they willing to invest resources in re-research and development of the engine, and they have no ability and no way to reduce costs and increase efficiency in the manufacturing process of automobiles, and promote the competitiveness of products in terms of cost performance.

This gives the Best Chance for Japanese Cars.

Japanese car companies quickly followed the US environmental protection policy and formulated the strictest pollution standards in the world at that time, and used this to formulate product modifications and replacements.

In 1976, the U.S. government enacted stringent emission standards that included provisions to control nitrogen oxides. The U.S. auto industry immediately protested, and the giants also used their strong influence in politics to exert pressure.

Under pressure, the US government postponed the implementation of the standard, which seems to make the US car companies breathe a sigh of relief, but gave the Japanese car a big gift - the Japanese car strictly implemented the 1976 standard, and finally led the way in exhaust emissions.

At the same time, Japanese cars have grabbed the design concept of driving comfort and cost performance, which can win consumers, and in order to improve fuel economy as a means, under the superposition of the oil crisis, the large-displacement American cars will quickly squeeze to the edge of the market.

Behind these strategies, it is inseparable from Toyota's "twisting towel philosophy" and the flexibility, efficiency and quality leanness brought about by Toyota's production methods.

This is the moment when Japanese cars shine in the brightest light.

【03】

"How to defeat Japan" was the goal of American entrepreneurs in the 1980s.

Compared with the opponent's "twisted towel philosophy", the Ford-style management that the United States was once proud of, the fine granularity was seriously insufficient. But in the midst of a chorus of lamentations, one man stepped forward and pointed out an underlying fact.

This man's name was Michael Porter, and his future well-known title was a professor at Harvard Business School in the United States and recognized as the "father of competitive strategy" in business management.

What is Japan's competitiveness shortcoming?

After careful study, Porter made a discovery from behind the Japanese miracle - most Japanese companies emphasize efficiency, but there is no clear positioning. In other words, the Japanese were tactically good and hardworking, but strategically unattractive.

Porter believes that there are only two sources of performance for companies, either doing things right (operational efficiency) or doing the right things (positioning). But the positioning is 1, and operational efficiency is the back 0, and if there is no 1, then 0 is neither sustainable nor meaningful.

In Porter's view, the competitiveness of many Japanese companies comes only from operational efficiency, that is, doing the same thing, always doing better, lower costs, and more efficient than competitors. He wrote these realizations into an optimistic report that, in a word, that Japan's competitiveness is unsustainable.

Potter's discovery revealed a corner of the mystery of Japanese industry. The Japanese also have a famous reflection on this issue: Galapagosianization.

The Galapagos is a Pacific archipelago isolated on the South American continent, which has evolved an independent and unique ecosystem due to its long-term isolation.

In Japan's automobile industry, there is a huge problem: after choosing an industry, it is eager to eat the technology in it, and eat the entire industrial chain in terms of control and profit distribution.

This style of play, of course, has advantages, and it can bring a system-wide leadership over competitors. But the corresponding disadvantages are also obvious, it is easy to go to self-closure.

A major harm to the Japanese automotive industry caused by the Galapagos-style ecology is the solidified thinking of indulging in lean, clinging to the ultimate in hardware, and emphasizing control.

In a company like Toyota, R&D and manufacturing can spend decades polishing and perfecting a product, such as the classic Toyota Corolla.

As a successful product, Corolla has brought huge benefits to Toyota, but the entire industrial chain it serves needs to comply with strict rules in order to share the pre-determined profits in the supply and sales system.

This solid and solid interest group is both closed and exclusive, but also strictly internal, and the various enterprises in the link have become fixed screws and migrant workers. As the "chain chief", Toyota has pinched the most patents, while enjoying the most lucrative profits and the greatest right to speak.

This control of the chain is actually a double-edged sword.

On the one hand, the stronger the control, the more difficult it is to give up the existing position and be unwilling to change the pattern; on the other hand, if it is strong enough, no one is willing to participate in this chain.

This kind of thinking of "only wanting to eat meat by yourself and not letting others drink soup" is vividly revealed in the competition for new energy vehicles.

【04】

Almost everyone has forgotten one thing, on the road to new energy, Japan is the technology leader.

As early as 1997, Toyota mass-produced the world's first hybrid sedan. Launched in 2010, the Nissan Leaf has also been the world's best-selling electric car.

To this day, Toyota still holds the world's largest number of patents for electric vehicles, far ahead of Tesla.

Not only that, Japanese car companies led by Toyota have almost monopolized technologies such as gasoline-electric hybrids and hydrogen energy vehicles, and they are also strong in the field of power batteries. Even for autopilot patents, Toyota ranks second in the world after General Motors.

However, Japan, which has strong technological reserves, has not been able to transform this technological advantage into an industrial advantage.

When someone proposed a zero-emission pure electric vehicle, the first reaction of the Japanese automotive industry was: "Do we really need pure electric vehicles?" The hybrid Toyota Prius requires a minimum fuel consumption of 4.7L. ”

Toyota has the world's largest number of electric vehicle patents, but it is also very negative about the construction of electric vehicles, as the president, Toyoda Akio even publicly shelled electric vehicles many times.

As an old automobile practitioner, Akio Toyoda will never be unaware of the possible advantages of electric vehicles. An important reason for this attitude is that Toyota's advantages in fuel vehicles and hybrids are too obvious.

More importantly, Akio Toyoda and even the whole of Japan still have a wishful thinking - gambling on hydrogen energy.

Japan's fascination with hydrogen energy dates back to the oil crisis of the 1970s.

Japan, which has scarce resources, has long had a long-cherished wish to build a hydrogen-based society, and has invested a lot of money in this regard.

Unfortunately, hydrogen energy technology is still immature. On the other hand, the fact that the Japanese hold 60 percent of the world's patents on hydrogen fuel technology has largely deterred other players.

In the end, China, the United States, Europe, the world's three major markets, Qi Brush chose the electric vehicle route, leaving Japan aside.

Toyota, which holds the world's largest number of hydrogen fuel technology patents, has been keeping secrets for a long time, until 2019, seeing that electric vehicles are about to change the world, it hastily announced open technology patents.

At this time, it has been exactly 5 years since Tesla opened the patent for electric vehicles.

Although Toyota senior vice president Bob Carter has said: "At Toyota, we believe that when good ideas are shared, great things happen." ”

But at this time, electric vehicles have become a trend.

When Musk uses ICT rules + new energy to change the traditional automobile industry, what can the Japanese auto industry do?

The collapse of the electronics industry chain in the 1990s, and the resulting innate deficiency of the networking industry, it is difficult for Japanese auto dealers to have the advantage of intelligent networking. Even if you catch up, you will be powerless due to the lack of technical precipitation and the lack of code talent.

In the past few decades, Japanese cars have built a seemingly insurmountable moat with the advantages of the industrial chain accumulated by engines, gearboxes and mechanical transmissions.

However, in the era of electric vehicles, key components such as batteries, motors, and electronic controls have become weapons for the flanking attacks on fuel vehicles, and the industrial chain foundation of these components is highly consistent with the industrial trend in recent years.

When software begins to define products, rapid iteration replaces lean manufacturing. In the past, the industry iteration cycle was as short as a few years and as long as decades. Nowadays, it's only a year or two, or even a few months.

The change in the rules of the game has fundamentally changed the competitive landscape.

In the era of hardware, the U.S. auto industry was overwhelmed by Japan. But they are also blessed by misfortune, paying more attention to software development and system openness. Finally, in the internet era, which emphasizes openness and rapid iteration, there is an epic reversal.

For opening up, Ren Zhengfei has a saying: "Everything must be done by yourself, except for farmers, others should not have this kind of thinking." ”

The Japanese auto industry has caught up after World War II, had the glory of the 80s, and has had the decline of the last decade. For auto practitioners around the world, the Japanese auto industry has a strong "anatomical value", and it is probably more meaningful for China's "new forces" that have just emerged in the field of new energy car manufacturing.

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