Southeast Asia was once dominated by Japanese cars.
According to data released by Japan itself, the proportion of Japanese cars in Southeast Asia in 2021 has reached as high as 76%. If you include some local Southeast Asian car brands controlled by Japanese companies, such as Malaysia's Perodua, then the share of Japanese cars has exceeded 80%. It is no exaggeration to say that Southeast Asia is the back garden of Japanese cars.
But now, this back garden is on the verge of being lost.
Get there first
Most Southeast Asian countries are small in area and have a mainly hot and humid climate. They are relatively underdeveloped economically and their urban construction is relatively lagging behind. The demand for cars is mainly cheap, practical and economical. This happens to be the main feature of Japanese cars. Japanese cars are compact and flexible, economical and durable, worry-free, not easy to break, resistant to humidity and heat, and have powerful air-conditioning functions, making them popular in Southeast Asia.
In the 1970s, Japanese cars took the lead in entering the mainstream market in Southeast Asia due to their fuel-saving characteristics. Governments of various countries also encouraged Japanese car companies to build local factories in order to obtain preferential policies such as exemption from purchase tax. This has led Japanese car companies to start building assembly plants in Southeast Asia. The Japanese government also provides assistance in building roads, bridges and other infrastructure in Southeast Asia in exchange for the Southeast Asian government's support and special care for Japanese cars. In addition, Japanese companies have also adopted low down payment financial policies and developed customized models for Southeast Asia to further occupy the market.
In the era of fuel vehicles, targeted efforts to meet the needs of the Southeast Asian market have won a good reputation for Japanese cars in the region. The good reputation has also contributed to the further increase in sales of Japanese cars, thus forming a positive cycle and a solid barrier. This is something that European and American brands, which mainly focus on large-displacement vehicles, and Chinese brands with relatively backward technology in the past and lack of reputation overseas are unable to match.
A turning point occurs
The turning point should be after 2015.
Independent brands in China's domestic market have begun to rise, gradually forming a three-legged rivalry with German and Japanese brands. Subsequently, the pace of independent brands going overseas began to accelerate, not only exporting products, but also beginning to expand overseas territory through acquisitions or building factories.
In Southeast Asia, the most iconic one is Geely's acquisition of Malaysia's largest local car brand Proton, which was on the verge of bankruptcy, helping the latter start to catch up with the number one Perodua in market share.
Afterwards, Chinese brands took advantage of the momentum of new energy and began to enter Southeast Asia strongly. Wuling entered the Indonesian market. BYD, SAIC, and Great Wall began to build factories in Thailand. The barriers to Japanese cars finally appeared. Data shows that in the past five years, the share of Chinese automobile brands in the ASEAN market has increased from less than 1% to more than 6%. In 2022, it will account for 26% of the total automobile imports of ASEAN countries, and it will still maintain rapid growth this year.
In the past, the most common models in Jakarta, the capital of Indonesia, were Japanese cars such as Toyota, Honda and Suzuki. The "Wuling Magic Car" that is now talked about by netizens has become a new "street car" on the roads of Jakarta. According to data from the Indonesian Automobile Industry Association (Gaikindo), China's Wuling Motors will account for 78% of Indonesia's electric vehicle market share in 2022. In Thailand, the largest car market in Southeast Asia, BYD Atto 3, Nezha V, and Euler Haomao are firmly at the forefront of sales. The share of Chinese brands in the pure electric market is expected to reach 85% this year.
In terms of policies, Vietnam has formulated a preferential promotion draft for pure electric EVs in 2022; Singapore has exempted pure electric EVs from registration fees of up to tens of thousands of Singapore dollars; Malaysia has exempted pure electric EV import taxes and will no longer be levied as road tax. tax object. The entire Southeast Asia region has begun to vigorously promote new energy vehicles, giving Chinese brands the opportunity to overtake Japanese brands.
Roll or not?is a problem
New energy is the most obvious shortcoming of Japanese car companies, but it is not the whole problem.
In the first half of 2023, due to stagnation in the field of electric vehicles, Japan's market share in China has plummeted from 20% last year to 14.9%. In July, the retail share of Japanese brands in China was 15.8%, down another 5 percentage points year-on-year. The downward trend has not yet bottomed out. This reminds people of the experiences of brands such as Hyundai and Ford in China around 2016. The Southeast Asian market seems to be repeating this scene now.
Lagging decision-making on transformation and insufficient investment in electrification and intelligence. These problems are only problems of the Japanese brands themselves. The larger background is an increasingly "volume" market. Today's Chinese new energy vehicle companies are just like the Japanese brands that entered Southeast Asia 30 years ago. Chinese new energy vehicles have not missed any of the advantages that Japanese cars had back then, and they can do better. Chinese car companies, which already have a complete new energy industry chain, are able to go even further than the extreme in terms of scale and cost. Japanese car companies, which have been enjoying themselves in Southeast Asia for 30 years, have never encountered such a challenge and are not ready to face such a challenge.
While competitors from China are already eager to fight you hand-to-hand and see blood, Japanese cars are still struggling with whether their feathers will be stained. This battle may be over before the Japanese can figure out how to fight it.
Write at the end:
The transformation of new energy is undoubtedly an industry revolution, and it is obviously unrealistic to complete the revolution without bloodshed. The Chinese have already had this awareness, but as the challenged Japanese, they have not yet understood this truth. The Southeast Asian market is closely connected with markets such as the Middle East, Australia, New Zealand, and Africa. In many cases, both suffer losses and prosper. If the Southeast Asian market is finally lost, the only thing Japan can rely on is its domestic and North American markets. By then, Japanese cars will not even have the last bit of capital to show off. (Text/Youshi Automobile Veteran)
Note: The pictures come from the Internet, and the rights belong to the original author. Thanks! This article only represents the author’s personal views and does not represent the position of UTV Automotive.
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