According to media reports, the global production of Japanese automakers saw its first decline in four years for the six months ending in September. This drop has been attributed to a compliance scandal involving Toyota Motor Corporation and increased competition from Chinese rivals.
Industry data released on October 30 showed that from April to September, Japan's eight passenger vehicle manufacturers produced a total of 11.87 million vehicles. This represents a 6% decrease from the same period last year and is roughly level with 2022, a year when automotive supply chains were disrupted due to shortages of semiconductors and other parts.
This trend indicates that as Japanese automakers strive to regain ground in the electric vehicle sector, their global production may be reaching its peak.
Toyota saw the largest production decline among the eight automakers, with a 7% drop to a total of 4.7 million vehicles, which accounts for around 40% of Japanese automakers' global production. The decrease was primarily due to a certification test scandal and recalls in North America, which led to production halts in Japan.
In China, the world's largest automotive market, Japanese automakers' traditional gasoline-powered business has also struggled against the competitive rise of local electric vehicles. Honda's production in China saw the largest decline, falling 34% year-on-year to 385,146 vehicles. This marked the fourth consecutive year of decline, with production levels now 60% lower than its 2020 peak in China. In September alone, Honda's production in China dropped by 58%.
Nissan's production in China declined 9% year-on-year to 312,316 units, marking a 62% drop from its 2020 production peak. Toyota's production in China also fell by 17% to 734,854 units, the lowest level for this period since 2019.
Facing fierce price competition from Chinese automakers, Japanese manufacturers are cutting production capacity in China. Honda reduced its annual gasoline vehicle production capacity in China from 1.49 million to 1 million units. In June, Nissan closed a plant in Jiangsu Province, and Mitsubishi exited production and sales in China last year.
Chinese automakers are now expanding into Southeast Asia, traditionally a stronghold for Japanese car manufacturers. In 2023, China's vehicle exports to Southeast Asia approached 5 million units, surpassing those from Japan.
From April to September, Japanese automakers' overseas production dropped 6% year-on-year to 7.99 million units. Mitsubishi's sales in Thailand saw the largest decline, down 16% to 215,145 units.
Seiji Sugiura, a senior analyst at Tokai Tokyo Intelligence Laboratory, commented, "Intense price competition has made Japanese automakers more cautious about inventory, leading them to curb production."
