New Delhi: The recent joint announcement by Honda and Nissan to explore working together marks yet another step forward in the consolidation of Japan’s auto industry. According to industry sources, it is a clear acknowledgement of today’s global realities where the Chinese are forging ahead in the electric vehicle arena. “Japan has been a laggard in comparison and this move by Honda and Nissan to team up for electrification is proof of this fact,” says an auto sector official. In his view, forming deep relationships is the only way out for automakers to stay afloat in this competitive era of manufacturing EVs, more so when they are up against a formidable opponent like China. The country has already signalled its intent to ship out its range to a host of countries in South America and ASEAN with Europe and the UK also on its radar. The killer combination of top- end features and an affordable price tag are enough to draw buyers from across the world to Chinese EVs. It is precisely for this reason that Europe is already under pressure from its carmakers to impose tariffs on EVs imported from China with the US likely to follow suit for Chinese car brands that could be shipped out from their facilities in Mexico. Japan vs. China In this backdrop, it is now getting increasingly apparent that Japan’s dominant position in the automobile industry is under even greater pressure thanks to the EV blitzkrieg emanating from China. Sure, Toyota continues to be the world’s largest carmaker but going solo is not the answer if it means standing up to the challenges of tomorrow. This also puts in context why Toyota has been at the forefront in sewingup some key alliances as part of the effort to stay ahead of the race. In2017, it announced a partnership with Suzuki Motor Corporation with aneye on India and other emerging markets like Africa and Latin America.Suzuki is the market leader in India and Toyota has not been able tomake much of a dent there except for one successful brand in the formof Innova. However, over the past six years since this alliance came into being, boththe companies have been collaborating on key areas like productdevelopment and ushering in cleaner fuel options for the Indian market.There could be some even bigger developments in the near future likeglobal products and other technological breakthroughs which will putthe Toyota-Suzuki partnership on a strong wicket. Toyota also has a stake in another Japanese brand, Mazda, where theidea is to grow in North America which is clearly among its mostimportant markets. Then there is Daihatsu, another Toyota groupcompany, whose prowess will be leveraged for the ASEAN region. Renault alliance In the case of Honda and Nissan, it is still not clear how this will pan outin terms of a strategic roadmap. The latter has had a strong partnershipof over two decades with Renault of France even while the structure haschanged in recent times with Nissan now having a greater say than in thepast. Honda had entered into an agreement with General Motors to produceelectric vehicles but the two called it off last October since it did notlook too viable. Perhaps this prompted the Japanese carmaker to joinhands with Nissan and, in the process, take the consolidation script inJapan to the next level. It perhaps needs to be mentioned here thatNissan also has a stake in Mitsubishi, acquired in 2016 when the latterwas literally down and out. Incidentally, there was a time when the Japanese automakers like Suzukiwere in global partnerships which were working quite well. The alliancewith GM, for instance, was coming along nicely till the two decided tocall it quits and the next big ticket brand Suzuki opted for wasVolkswagen where the script just went horribly wrong. The parting of ways was not pleasant and it was at this point in time thatToyota stepped into the picture. The alliance has had no glitches thus farand this is also owing to the fact that there is a greater level of culturalconvergence and mutual respect among Japanese companies. Case for unity Nissan and Renault also had a successful relationship even though it wasnot exactly on even terms. This is what raised the former’s hackles whichthen led to a series of dramatic developments starting with the arrest ofCarlos Ghosn, Chairman of Renault-Nissan, followed by more upheavalsat the leadership level and finally a restructuring of the alliance. With Honda now as its partner for EVs, there will be obvious questionson the relevance of the Renault partnership going forward. Will Hondaalso play a role here along with Mitsubishi? These are early days yet toseek answers but, from the viewpoint of Japan’s auto industry, thepragmatic solution is that in unity lies strength. A section of industry observers believes that the Japanese governmenthas been pushing for greater consolidation among its automakersfraternity since this is the only way to stand up now competitionemerging in the form of the Chinese. Even in the two-wheeler arena.Honda and Yamaha which were bitter foes for decades teamed up in 2016for joint development of 50cc scooters which is a niche segment inJapan. While this may not have seemed too significant, it still marked abeginning in building new bonds between two erstwhile rivals who hadlittle love lost for each other during the fierce days of the ‘H-Y war inthe early 1980s. Burying the hatchet The global CEO of Yamaha then, Hiroyuki Yanagi, had told this writerduring a visit to India, “All this happened over 30 years ago. That wasduring the old generation management but we represent a newgeneration that thinks differently” Apart from working together in the 50cc scooter space, the twocompanies were tipped to explore the possibility of collaborating inelectric motorcycles and in areas relating to range, charging time,performance and cost, Yanagi said electric bikes represented animportant mobility initiative for the future. “However, in the case of e-motorcycles, there are technologicaldifficulties compared to four-wheelers. We will try and make a goodalliance with Honda as each of us has some know-how in this space. If wecan put that together, there will be better technology in the process,” hesaid. Since then, nothing much has really come about in terms of joint productdevelopment from Honda and Yamaha but, as industry observers say,there is no telling what the future has in store. In any case, there isalready a two-wheeler battery consortium in Japan comprising Honda,Yamaha, Kawasaki and Suzuki which may well build up to somethingbigger globally.

Smart technology such as autonomous parking systems and the wide availability of superfast battery charging infrastructure will drive a boom in electric vehicle (EV) sales in China over the next five years, according to two of the segment’s leading manufacturers. Xpeng’s Brian Gu told a panel on “The Innovation Boom Coming from China’s Greater Bay Area” at the Milken Institute’s inaugural Global Investors’ Symposium in Hong Kong on Tuesday that smart driving technology will become as “prevalent” as smartphones are today. Meanwhile, BYD’s Stella Li pointed out that even traditional energy firms were investing in battery charging infrastructure. Both firms are based in the Greater Bay Area development zone. “In five years, EVs and these [smart-driving] technologies will be just like [how] iPhones and smartphone technologies are prevalent nowadays,” said Gu, vice-chairman and president of Guangzhou-based Chinese smart EV maker Xpeng.     Almost all EVs will be equipped with smart driving technologies such as autonomous parking and navigation systems by 2029, he said. And by that time, battery-powered vehicles will dominate car sales and superfast charging technology will have greatly shortened the time required for charging EVs, on par with gas stations. Gu’s comments came after Guangzhou-based Xpeng last week reported a 153 per cent increase in its revenue for last year’s fourth quarter, narrowing its net loss by 40 per cent year on year. Moreover, He Xiaopeng, Xpeng’s founder, was bullish about the company’s strategy of developing autonomous driving technology and making it affordable and accessible for “a much broader customer base”. Last year, China, the world’s biggest automotive and EV market, recorded the sales of about 30.1 million cars, of which about 35 per cent were pure battery EVs and plug-in hybrids.     Gu forecast that China’s EV sales will surpass 50 per cent of new car sales in 2024, and touch 80 to 90 per cent in five years. Currently, only about 10 per cent of China’s premium EV models have advanced driving technologies, he said. “We are still far way from robotaxis, and driverless cars will probably take more than five years to be commercialised, but most of the cars in five years will be smart driving cars,” Gu said. Superfast EV battery charging technology will also see rapid development in the next five years, coupled with advancements in battery technologies, he said. “In five years, I think superfast charging of EVs will become the predominant form, and the user experience will be very similar to today’s gas station visit,” Gu added. The wide use of EVs will greatly drive up the demand for charging infrastructure, which will create more opportunities for companies in the charging business, said Li, executive vice-president at Shenzhen-based BYD, the world’s biggest EV maker. Last year, BYD partnered with global oil giant Shell to open the British energy giant’s largest EV charging station globally. Located near the Shenzhen airport, the charging station features 258 public fast-charging points. Rooftop solar panels have been installed to supply clean electricity for charging. The two companies have extended their partnership to overseas markets including Mexico and Brazil, Li said at the event. “I think China built a very good example for every country to learn from,” she said, referring to the Chinese government’s policy support and subsidies at an early stage, which incentivised EV purchases and adoption, and later policies on charging infrastructure deployment. “Once there are more people driving [EVs], then you need more charging stations,” she said. “Even traditional gas companies now are putting a lot of money” into the future of transport, which is EVs, Li added.