In the six months to September this year, Japanese automakers’ global production fell for the first time in four years due to Toyota Motor Group’s compliance scandal and tougher competition from Chinese rivals.
Industry data released on October 30 showed that Japan’s eight passenger car manufacturers produced a total of 11.87 million vehicles in the April-September period this year, down 6% from the same period last year and basically unchanged from the same period in 2022, but the automotive supply chain in 2022 was disrupted by a shortage of semiconductors and other parts.
This means that as Japanese automakers strive to regain lost ground in the electric vehicle field, their global production may be peaking.
Among them, Toyota Motor had the largest production drop among the eight major automakers, at 7%, and produced a total of 4.7 million vehicles, accounting for about 40% of Japanese automakers’ global production. The production decline was mainly due to the certification test scandal and the North American recall incident. Toyota once faced suspension of production in Japan.
In China, the world’s largest auto market, Japanese automakers’ main fuel vehicle business has also lost its advantage in the competition with local electric vehicles. Among them, Honda’s production in China fell the most, down 34% year-on-year to 385,146 units, marking the fourth consecutive year of decline. This production level is 60% lower than Honda’s peak production in China in 2020, and production in September alone fell 58%.
Nissan’s production in China fell 9% year-on-year to 312,316 units, down 62% from its peak production in China in 2020. Toyota’s production in China fell 17% year-on-year to 734,854 units, the lowest level in the same period since 2019.
Faced with increasingly fierce price competition from Chinese competitors, Japanese automakers are cutting production capacity in the Chinese market. Honda cut its annual production capacity of gasoline vehicles in China by 500,000 units from 1.49 million units; in June this year, Nissan closed its plant in Jiangsu Province; Mitsubishi Motors also withdrew from production and sales in the Chinese market last year.
Chinese automakers are also currently making inroads into Southeast Asia, which was once considered the base camp for Japanese car manufacturing. China’s auto exports to Southeast Asia are close to 5 million units in 2023, surpassing Japan.
Japanese automakers’ overseas production fell 6% year-on-year to 7.99 million vehicles in the April-September period this year. Mitsubishi Motors’ sales in Thailand fell the most, by 16% to 215,145 units.
“Fierce price competition has made Japanese automakers more cautious about inventory and they are curbing production,” said Seiji Sugiura, senior analyst at Tokai Tokyo Intelligence Laboratory.