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Frightened by the Chinese car, the Japanese conspired to save themselves

Frightened by the Chinese car, the Japanese conspired to save themselves

Frightened by the Chinese car, the Japanese conspired to save themselves

Lead

Introduction

Reducing production capacity is to retreat, holding joint ventures is to advance, and between one advance and one retreat, the Japanese began a journey of "self-help" in China.

Author丨Li Sijia

Editor-in-charge丨Cui Liwen

Editor丨He Zengrong

The disputes in the automobile market have always been a process of ups and downs, spiraling and alternating. When everyone is watching independent brands stir up the market anytime and anywhere, joint ventures and foreign brands will not sit and watch the clouds roll in the sky without being shocked.

On March 13, it was reported that two Japanese automakers plan to reduce production in China. Among them, Nissan Motor is considering reducing its production capacity in China by up to 500,000 units, equivalent to 30% of its annual production capacity in China, while Honda Motor intends to reduce its production capacity by 20% to about 1.2 million units.

On March 14, Nissan and Honda, which have just announced the adjustment of production capacity in China, said that they are considering cooperation in the field of electric vehicles, and if the cooperation is successfully reached, the two parties will jointly procure and jointly design and develop an electric vehicle sharing platform. According to foreign media reports, Nissan will also announce the signing of a memorandum of understanding with Mitsubishi Corporation to jointly explore the use of electric vehicles.

We all know that reducing excess capacity will effectively reduce the leverage ratio of enterprises, which plays an important role in optimizing resource allocation and improving economic returns, while the joint venture model can realize the merger of capital, technology, human resources and other resources, so as to achieve resource sharing and complementary advantages, so as to enhance the overall strength and competitiveness.

Frightened by the Chinese car, the Japanese conspired to save themselves

Nissan, Honda, and Mitsubishi have taken measures to reduce production capacity and huddle together for heating, and the goal is undoubtedly the same.

In the face of the increasingly fierce competition in the Chinese market, especially the increasingly mature new energy track, Japanese manufacturers are now facing a strong impact from local manufacturers led by BYD, Chery and Geely. Chinese brands have successfully broken through the red line of 50% market share by lifting their own camp with the wind of new energy development, while Japanese brands are facing a dangerous situation of declining sales and market share in China.

Reducing production capacity is for retreat, and joint ventures are for advancement. On the one hand, it is to reduce excess capacity, reduce costs and increase efficiency, and on the other hand, it is to plan for the future with a group of heating, and the Japanese represented by Nissan and Honda are starting their "self-help" journey in China in the way of "one advance and one retreat".

The share has dropped sharply, and the Japanese should panic

Last year, China's auto market exceeded 30 million units for the first time in the bloody competition for prices, creating a record high. Among them, the market share of self-owned brand passenger cars was 56%, an increase of 6.1 percentage points over the same period of the previous year. This is also the first time that the annual market share of own-brand passenger cars has exceeded 50%.

Compared with the situation of independent brands, the overall performance of Japanese brands in China is not optimistic.

According to the data, in 2023, about 3.7 million Japanese cars will be retailed in China, a year-on-year decrease of 9.9%, and the sales share will decline for three consecutive years, falling to 17.7%, reaching a historical freezing point. You must know that four years ago in 2020, Japanese cars accounted for 24.1% of the Chinese market, which was the most popular in the market at that time, including small cars and B-segment cars.

Time has passed, but the dominance of Japanese cars in the global market is still the same, whether it is a 35.5% share of the North American market or a nearly 25% share of the global market, which is the best proof. However, on the yellow sand of the Chinese market, Japanese cars represented by Toyota, Honda, and Nissan, the "top three" of Japanese cars, have gradually gone downhill, and the scenery is no longer good.

Frightened by the Chinese car, the Japanese conspired to save themselves

Among them, Toyota will sell 1.908 million units in China in 2023, down 1.7% year-on-year, Honda will sell 1.234 million units in China, down 10.1% year-on-year, and Nissan will sell 794,000 units, down 16.1% year-on-year.

Even small cars and B-segment cars, which once had obvious advantages, have begun to decline their dominance, especially the corresponding market share of related new energy vehicles. For example, in the 100,000-yuan sedan market, the annual sales of Sylphy and Corolla fell by 15% and 31% respectively, and instead the Qin PLUS champion will stir up the market in 2023.

Among the three companies, Honda and Nissan both saw sales declines of more than double digits.

Not only that, the achievement of 794,000 units has allowed Nissan to fall out of the annual sales million club for the first time after eight consecutive years of domestic sales exceeding one million units, and the sales volume is only about half of the peak of 1.56 million units in 2018; Honda has reached a peak of 1.627 million units in China in 2020, and has begun to decline one after another; although Toyota's share has declined low, such phenomena as Lexus's price increase and Highlander's dominance no longer exist.

In addition to the decline in market performance, the problem of overcapacity is rampant.

Nissan operates eight plants in China with an annual production capacity of about 1.6 million vehicles through a joint venture, while Honda operates seven plants with an annual production capacity of about 1.5 million vehicles, according to the Nihon Keizai Shimbun.

Therefore, in the face of declining sales performance, excess capacity will become an obstacle to the development of enterprises. How to re-evaluate and effectively deal with excess capacity has become an unavoidable issue for companies such as Honda and Nissan.

Prior to this, both Mitsubishi and Mazda had already taken action on production capacity.

In October 2023, Mitsubishi Motors announced its withdrawal from the Chinese market, and the related plants will also be operated by GAC Aion. Mazda's two joint ventures in China merged in 2021, and last year it announced a comprehensive overhaul of its strategy in China and accelerated the pace of electrification. Now, this chill has been transmitted to the more mainstream Japanese Big Three.

Japanese cars, which have always been eaten and drunk in the Chinese market, have begun to decline, not to mention other car companies.

Frightened by the Chinese car, the Japanese conspired to save themselves

According to the statistics of McColleais Information Consulting, a research company, the share of passenger car brands by country fell by 6.4 percentage points to 17.8% by German companies, 7.9% to 7.9% for U.S. cars, and 1.6% for Korean companies...... Most of them have overcapacity issues, and have discussed or even sold capacity assets to a greater or lesser extent.

It can be seen that the tide of new energy is becoming more and more surging, while encouraging independent new energy vehicle companies, while slapping all traditional fuel car companies, resulting in many changes in various subdivisions of the mainland passenger car market in the past two years. At the time of the breaking of the old pattern and the establishment of new business formats, under the encroachment of new energy vehicles, the overcapacity of fuel vehicles is almost a foregone conclusion.

As early as 2022, Zhu Huarong, chairman of Changan Automobile, predicted that in the next 3-5 years, 80% of Chinese fuel vehicle brands will face a situation of "shutdown and transfer" (i.e., closure, suspension of production, merger, and transformation). In the past two years, many smaller brands have been forced to withdraw, and the news of idle production capacity has been constantly spreading, which has once again confirmed this judgment.

Some analysts said, "Behind the superficial prosperity in 2023, the deep problem of overcapacity still exists and needs to be solved urgently." "The Japanese began to adjust their production capacity in China, which is also a big step to deal with the decline in share and influence, and the adjustment of production capacity is the first step to retreat, and more measures will be rolled out to the big drama of Japan's "self-help".

Huddle together for warmth, whether it can be successful

In fact, in the face of the continuous decline in sales in China, Japanese car companies have made some plans in advance.

In the second half of last year, Nissan CEO Makoto Uchida made two decisions: one is to admit that the decline is a price war in the Chinese market and the growth in demand for electric vehicles, and the other is to lower the original sales target of 1.13 million units for the whole year of 2023 to 800,000 units.

In Makoto Uchida's two decisions, it is not difficult to see that the share of Nissan and even Japanese cars in China has declined, mainly because the share of the main fuel vehicle market is declining, but it has not kept up with the rising share of the new energy market.

Frightened by the Chinese car, the Japanese conspired to save themselves

According to the data, in 2023, 13.82 million fuel vehicles will be sold in the Chinese market, with a market share of 62%, which is in a year-on-year decline. In contrast, NEV production and sales totaled 9.587 million units and 9.495 million units, up 35.8% and 37.9% y/y, respectively, with a market share of 31.6%.

Under this general trend, a number of Chinese car companies have successfully changed lanes and overtaken, and BYD even ranked among the world's 10th largest car companies with a sales performance of more than 3.02 million units. The heat of the new energy market is catalyzing the chemical reaction of Chinese brands towards the future.

On the other hand, the decline in sales of Japanese brands is due to the difficulty of the new energy transition to keep up with the pace of the Chinese market.

The related new energy vehicles launched by it have high pricing, low intelligence, and slow launch speed, resulting in poor sales. Whether it's Toyota's bZ4x, bZ3, Nissan's ARIYA, or Honda's e:NS1, they all struggle to match the strength of their competitors and become marginal players. Even the ARIYA, which performed well, will only sell 2,707 units in 2023.

Based on this, the Japanese company's strategy is not to accelerate the pace of electrification in China, but to adjust its business in China by reducing production capacity and focus more on the North American and Southeast Asian markets, where it has advantages. Last year, Masashi Matsuyama, Nissan's general manager in China, said that Nissan was considering exporting existing internal combustion engine vehicles produced in China, as well as upcoming electric vehicles, overseas.

Frightened by the Chinese car, the Japanese conspired to save themselves

For the Chinese market, it is to seek the future in the way of group heating.

Although the cooperation between Nissan and Honda is still in the preliminary stage, the specific scope of the cooperation has not yet been determined. However, according to the memorandum, Nissan and Honda's cooperation in the field of electric vehicles will involve the joint development of automotive software platforms, new modular electric axles (e-axles), and joint adoption of key components and shared electric vehicle components.

In the future, it remains to be seen whether Nissan, Honda, and Mitsubishi Corporation will be able to strengthen their position in the Chinese market through cooperation in the field of electric vehicles. But what is certain is that as the new energy track continues to run wildly, the Japanese will face more and more pressure in the Chinese market, and the Japanese will not face the collapse of Mount Tai and let it go.

On March 6, GAC Toyota's new ninth-generation Camry will be officially launched, and what people didn't expect is that GAC Honda, which is also a Japanese joint venture, also posted on Weibo, wishing the ninth-generation Camry a big sale.

Frightened by the Chinese car, the Japanese conspired to save themselves

Guangqi Honda posted on Weibo: "Brother, wait for you '9'. The all-new Accord wishes the 9th-generation Camry a successful launch!" At the same time, Guangqi Honda also released a promotional poster of the new Accord, which reads: "There is a road before the car reaches the mountain, and the electric hybrid is driven to a new height." This reminds people of Toyota's slogan that "there must be a road before the car reaches the mountain, and there must be a Toyota car when there is a road".

As old rivals in the B-segment car market, the Accord and Camry began to congratulate each other on their big sales, which also reflected the scene of Japanese brands beginning to choose to huddle.

It is true that Japanese cars are still strong in the Chinese market, and their market share of 17.7% will not collapse in a day, and the brand reputation, technology and quality assurance accumulated for a long time are still recognized by many consumers, which is the advantage of Japanese cars in the Chinese market.

But at present, the Japanese system must take action to "save itself", especially in terms of investment in new energy, otherwise, under the coercion of the general trend, it will only be more difficult. The current "one advance and one retreat" is only the beginning of "self-help", if you want to return to the glorious years in China, you need to continue to explore in the future.

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