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Economy

Why Japan's Auto Industry Can't Keep Pace With The Electric Vehicle Revolution

The "Made in Japan" label used to be a mark of progress, but Japanese manufacturing has declined rapidly. Now, the automobile industry, the last bastion of the country's technology, has fallen behind in the transition to electric vehicles.

Photo of a Japanese car manufacturer in Japan assembling parts

A staff worker of car manufacturer Mitsubishi Fuso works on a large truck in Kawasaki, Japan

Daisuke Kondo

TOKYO — From semiconductors, TVs, and computers to mobile phones, Japan was once the world’s leading manufacturer, and it swept the world with all these products. But since entering the twenty-first century, “Made in Japan has declined so fast that certain Japanese brands have simply disappeared.


Recently, the automobile manufacturing industry, known as the “last bastion” of Japanese technology, is beginning to notice an alarming situation.

The Big Three

Called the “Big Three,” Japan's Toyota, Nissan, and Honda still enjoy an unshakable global status in the field of fueled vehicles. Among them, Toyota Motor Corporation is the largest company in Japan. Last year, Toyota alone sold 10.5 million vehicles worldwide, topping the global auto sales leader board for the last two consecutive years.

It’s also worth mentioning that, last year, Toyota sold 2.3 million cars in the United States, surpassing General Motors to top the U.S. car sales ranking. In 1931, General Motors overtook Ford to become the No. 1 selling car brand in the U.S. and it has gone undefeated for 90 consecutive years until it unwillingly passed the crown to Toyota.

Last year, Nissan-Renault sold 2.6 million vehicles worldwide. It was during Carlos Ghosn’s leadership that Nissan and France's Renault joined forces and established a strong presence in the European market.

As for Honda, its global sales last year were 4.5 million cars. The company has absolute confidence in its own engine technology. At the finale of the 2021 World Formula One Championship (F1) held in the United Arab Emirates last December, the drivers of the Red Bull and Toro Rosso teams, which have deep cooperation with Honda, won the driver’s championship and the third place respectively.

EVs after the rest

Nevertheless, a kind of pessimism has emerged in one after another of Japan’s carmakers.

The reason lies in the fact that the global auto industry is rapidly shifting from fueled vehicles to electric vehicles (EVs). Yet, compared with companies in other countries, Japan's “big three” automakers are lagging far behind in their conversion to EVs. Only 21,139 electric vehicles were sold in Japan in 2021.

By 2025, our first electric car will be developed and sold.

Meanwhile, Chinese car makers are eyeing up the global market. Last year, BYD Auto Company sold 320,810 electric vehicles. At the United Nations COP26 climate summit held in Glasgow last fall, a BYD electric vehicle was identified as the official vehicle for the meetings.

Also late last year, the Keihan Bus Company in Kyoto officially put into use four BYD J6 electric buses. A J6 costs about 30% of the price of a comparable Nissan vehicle and has more performance. This is reminiscent of when Japanese cars entered the U.S. market half a century ago.

Photo of man testing out Suzuki Motor flying car

The era of “flying cars” will follow the driverless era.

Cover Images/ZUMA

Sony and Honda team up

So, is the “last bastion” of Japanese technology going to collapse sooner or later? Amid this deepening sense of crisis, Japanese manufacturers have rolled out new initiatives this year.

For example, Sony has entered the arena of EVs. On Jan. 4, at the CES technology exhibition held in Las Vegas, Kenichiro Yoshida, chairman and CEO of Sony Group, announced the establishment of a new company “Sony Mobility” to commercialize electric vehicles.

“In order to enter the EV sector, we have set up Sony Mobility. It aims to launch electric vehicles that combine sensor technology, cloud service technology, 5G technology, entertainment and content technology. Sony Group has been deeply involved in each of the above areas and with these technologies, we believe that Sony is in an advantageous position to redefine mobility.” Driven by the news, Sony's share price rose 5% in one trading day.

Two months later, on March 4, Kenichiro Yoshida and Honda President & CEO Toshihiro Mibu held a joint press conference to announce “Sony and Honda have reached a strategic alliance agreement to jointly create a new era of future mobile technology and services. Within this year, the two companies will establish a joint venture together. It is expected that by 2025, our first electric car will be developed and sold.”

Japanese technology in the 21st century

In fact, Masaru Ibuka, the founder of Sony, and Soichiro Honda, the founder of Honda, were lifelong friends. Not only had they felt very proud of their own technologies as well as abilities, they also dreamed of cooperating together one day. The two, however, did not fulfill this wish in their lifetimes. Many years after their passing, the companies they founded are finally hand in hand.

Flying cars will follow the driverless era.

The irony is that the two companies have decided to work together because they haven’t had a clear perspective of the future. This is particularly true for Honda because in the EV world, the “World’s No. 1 engine technology” is not needed.

Currently, Sony is developing image sensor that can accurately capture signs and objects up to 450 meters away. And in gaming, Sony is developing an artificial intelligence system that drives a car at high speed while avoiding contacts. It is said that Honda believes that these Sony technologies will play a huge role in the future era of driverless cars.

What’s more, the era of “flying cars” will follow the driverless era. SkyDrive, founded by former Toyota technical engineer Chihiro Fukuzawa in Aichi Prefecture in 2018, has attracted much attention. In terms of “flying car” technology, the SkyDrive is one of the world's leaders. Certain people even hold high hopes that it may become the new “Toyota” of the 21st century.

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