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Weak yen gives Japan's automakers temporary relief from China pain

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By Daniel Leussink

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© Thomson Reuters 2023.

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even Chinese EVs are miles better than Japanese EV.

Excluding Teslas, this is ^^^ gaslighting extreme!!!

Chinese EVs on paper are much more inefficient than everyone else's, they can't or too stingy to cut helical gears so driveline noise and inefficiency is a baked in characteristic. They tried to buy Jatco for know how, but Jatco owners won't sell.

Now as for engineering prowess, they can hardly figure out how to use threaded fasteners, do you want to trust them with your family?

https://youtu.be/aBdQQxgxDrY

Torqued to yield hundreds of times over the life time of the bolt? LOL.

Now, let's not get the Chinese pouch battery fire truth started either. BMW (and its Samsung prismatic battery) has shipped over 2 hundred thousands i3 and i8 without a single incident. Tesla and its cylindrical cells, millions cars without incidents. How many Nissan EV incidents? NIL

Chinese supplied pouch to Euro battery makers has set 2 ships on fire so far. Even if it didn't start the fire, the fact the EVs fires destroyed the ship should be cause for concerns.

The Chinese are successful because of heavy subsidies and price point to market. There's no other technical prowess that the Chinese can claim.

9 ( +11 / -2 )

For these reasons China will dominate

Yes, very much so. Japan CAN do something about it, but won't. Japan has been in this position before, ie producing to a price point to gain/restore/preserve market share.

Why won't Japan Autos do something about the Chinese, they're too busy making record profits from ICE vehicles, the shortage of, and the withdrawal of offerings from others. It's a typical lazy balance sheet that has dominated Japanese conglomerates since the low interest rate environment started. Why innovate when you can vacate and still earn a decent profit?

IMHO, Japan Autos should now think about the long term future and produce to a price point so as to snuff out the incoming Chinese onslaught before they are entranced in the competitive landscape.

7 ( +10 / -3 )

For these reasons China will dominate

China will dominate its home market (as it does for everything, through unfair government policies), but for the rest of the world I'm not so sure. With so many countries actively blocking China due to Xi's aggression, China will find that it can't access markets in the way it once did, and many countries are also wary of Chinese EVs due to the data they collect being accessible by the government.

China may also, like Japan did a while back, find that its business is undercut by cheaper regional rivals. Vietnam is the most likely candidate:

https://www.bbc.com/news/business-66517549

"Investors are continuing to believe that the future is in electric and that a low-cost East Asian country will emerge as a competitor in the US," said Bill Russo, Founder and CEO of Shanghai-based Automobility.

"The markets believe that given geopolitics that Vietnam, not China, will be that country."

7 ( +7 / -0 )

The dollar was trading at 1435.23 yen on Friday.

Might want to check those numbers again ;-)

Moderator: It has been corrected. Thanks for pointing it out.

6 ( +7 / -1 )

China became the world no.1 automobiles exporter this year. The weak Yen won't help much for Japan's auto industry exports, she will meet tough competitions from China cars!

Yes, but how long can the CCP prop up China's EV industry when everything else is crumbling. Don't forget, OVERNIGHT Chinese can suddenly become uncompetitive because other nations can band together and impose fair trade tariffs on 'heavily subsidised' Chinese cars.

The world is at a point where it is no longer scared or worried about Chinese punishment. Fair trade and climate repair is the new cool, that means China isn't.

6 ( +10 / -4 )

Automakers are the last remaining large scale manufacturing business that Japan hasn't lost to SK and China. BOJ is working hard to keep them alive at the expense of the global purchasing power of the Japanese people but they should just rip the band aid and let them fight on equal grounds on the global market. The ones that survive will be healthier and can guarantee sustainable profitability for the foreseeable future without relying on the decimation the value of JPY. The ones that don't should be acquired by the highest bidder. No more protectionism against foreign buyers.

5 ( +11 / -6 )

Oh and let's not forget that Japanese automakers have factories overseas, that are not directly affected by the yen/dollar rate, so this is rather misleading as well.

5 ( +8 / -3 )

I think the eventual move to ev is kind is inevitable. Sure there will be some legacy vehicle manufacturers left to make collection pieces or whatever, but it feels a bit like its adapt or die. I just hope Japanese automakers make the right decisions before its too late. Without them, the Japanese economy is going to be in a very tight spot

4 ( +7 / -3 )

I live now in an area of the US with some dealers who sell the most cars in the country, e.g., #1 Mercedes, Audi.

The large Toyota dealer has not a single new car on its huge lot, only pickup trucks made in the US because of the US tariff of 50% on pickups.

They are either sold out of cars or can’t get inventory. I don’t know which.

3 ( +3 / -0 )

This Deflating Exports and Inflating Imports policy will only work for a while and for the benefits of the FEW. The majority of Japanese are suffering due to the fact that their salaries did NOT increase to catch up with inflation. So this policy will backfire IF wages are not increased

2 ( +8 / -6 )

China became the world no.1 automobiles exporter this year.

Because it can export to Russia.

0 ( +4 / -4 )

Separated at birth? Acura and Cadillac’s first production EVs share an awful lot under the skin.

Toyota on the other hand is insisting on "All Japan" EV strategy, where the every component is made by Japanese companies.

Maybe that is why, Honda ev is getting bad reviews:

 

I drove Honda’s new EV… it’s too expensive,

 

https://www.thesun.co.uk/motors/23519327/honda-electric-vehicle-eny1/

0 ( +4 / -4 )

Start creating, start keeping it fresh, get rid of the dinosaurs and let the young minds shine.........

THEN, Japan will no longer worry about anyone else, they can just lead the way.

BUT of course................................this is complacent Japan.

 

 

Who owns the most battery patents?

The study found that Toyota Motor is by far the leading holder of solid-state battery patents with 1,331 known patents. Panasonic Holdings is a distant second with 445 patents. Idemitsu Kosan holds 272 patents. Fourth-place Samsung Electronics was the only non-Japanese company to enter the top five.7 Jul 2022

 

 

 

But of course, you knew that , before you posted the above right?

0 ( +2 / -2 )

Are you sure? Korean EVs are light years ahead of Japanese EVs and even Chinese EVs are miles better than Japanese EV.

 Really?

Nikkei study finds Toyota with huge lead in solid-state battery patents

ttps://www.greencarcongress.com/2022/07/20220707-nikkei.html#:~:text=07%20July%202022&text=The%20study%20found%20that%20Toyota,to%20enter

The above says it all.

0 ( +3 / -3 )

I don't know where the 40% figure came from, and is the exchange a financial exchange?

In other words, since Toyota makes money from foreign exchange transactions, does that mean that it has nothing to do with car sales?

Are you saying that product prices are irrelevant because all other companies also make money from foreign exchange trading?

In your opinion, the cost of raw materials has risen and the selling price has risen, but you are only making money because you are doing foreign exchange transactions. Is it like this?

Are you serious?

0 ( +0 / -0 )

Q? why aren't Chinese Electric automobiles being sold in Japan?

-1 ( +6 / -7 )

Big deal. So what? The Japanese consumers on the other hand have no relief from their pain. In fact, the pain is increasing. And THAT will have long lasting effects on the economy.

No kidding, and with gasoline hovering around 170 to the liter, it's just going to get worse too!

All you ever hear is about the export economy, but Japan literally is surviving on an import economy, it is nowhere near self-sufficient in any area, and with an ever weakening yen, consumer costs keep skyrocketing.

-1 ( +8 / -9 )

All you ever hear is about the export economy, but Japan literally is surviving on an import economy, it is nowhere near self-sufficient in any area, and with an ever weakening yen, consumer costs keep skyrocketing.

 

Japan has no natural resources. It has to import. It is called trade.

-1 ( +4 / -5 )

You know the US bailed out GM and Ford and Chrysler?

The US is not a rolemodel. These US legacy automakers should also be left to die.

-1 ( +3 / -4 )

As usual, there are many mistakes and lies, so I will write only the facts.

In terms of exchange rates, a weaker yen naturally sells more goods overseas.

If the yen continues to depreciate, it will be more profitable for the Japanese economy. Conversely, when the yen was in the 80 yen range, the Japanese economy was in shambles.

The Tokyo Stock Exchange average stock price was below $100. The number of bankruptcies and suicides was also higher than now.

Simply put, Japan has been importing raw materials, processing and selling them for many years. A weak yen invites soaring prices of raw materials, but the selling price of products can be kept low, so profits can be made.

If the quantitative easing policy by the Bank of Japan continues, it will be possible to maintain the yen's depreciation further. So far, unlike countries such as South Korea, Japan has no reason to raise interest rates.

China is the world's number one producer of automobiles, but the number of export sales abroad is one million units, which is still a long way off for an export country. Chinese cars are mostly sold in China.

The top exporting country in 2022 will be France with 4.09 million units, Japan with 3.74 million units, and the United States with 2.37 million units.

In terms of the number of new cars sold, Toyota ranked first for the third consecutive year (1,048,3042 units), vw ranked second (8,262,800 units), and Hyundai ranked third (6,848,198 units).

Koreans often said Japan was destroyed! Toyota is dead! Sony is dead! This is the Korean people's desire, but unfortunately the reality and the facts are not like that.

To say that the only manufacturing industry that makes a decent living in Japan is cars, I have to say that either you don't know the economy or you have a fairly narrow view of the economy.

Honda's partnership with LG will fail. There is nothing that a Japanese company has done successfully in partnership with a Korean company.

Even Soichiro Honda, the founder of Honda, warned in his book not to get involved with South Korea. The fourth-generation Fit, which used Korean designers, was a failure.

You'll regret it after seeing the failures of GM and LG.

https://www.reuters.com/technology/gm-lg-energy-drop-plan-fourth-us-jv-battery-plant-2023-01-20/

-1 ( +1 / -2 )

Meanwhile the average family can get stuffed, so long as big business gets their chop.

-1 ( +2 / -3 )

It is known that EVs in China and South Korea burn very well, but there are still no countries with a well-developed charging infrastructure.

In fact, hybrids and ordinary cars are still selling well, and EV cars are still in the future. (EV sales in 2022 will exceed 10 million units worldwide for the first time.)

There are various reasons why Japanese companies will not sell a large number of EV vehicles immediately, such as safety, batteries, and charging infrastructure. It's just a wish to judge that it's because there's no technology.

Japanese manufacturers cannot sell cremation cars like Chinese or Korean cars.

Koreans have the misunderstanding that technology is strong if it sells a lot, but patents give a different perspective.

By the way, Koreans are proud of semiconductors, but they cannot be made without Japanese materials and manufacturing equipment. That's why South Korea's import deficit from Japan never falls below $10 billion every year.

It doesn't make sense to boycott beer or Uniqlo.

In fact, the total semiconductor sales in 2022 are 55 billion dollars in South Korea and 50 billion dollars in Japan, which is not much difference.

In the future, the United States will tighten regulations on China's semiconductors, and the tightening will be even more severe, but the most affected will be South Korea, which has a large-scale factory in China.

Taiwan is building the latest semiconductor factories in Japan and the United States, and the United States is expanding Japanese semiconductor factories and reorganizing supply chains, but South Korea is not included in this movement. (Samsung is building a factory in the United States, but there is no prospect of completion.)

South Korea, which has been too close to China, may be on the verge of being shut out of the semiconductor market by incurring the wrath of the United States.

-1 ( +1 / -2 )

If there is a reason other than the decline in sales prices overseas due to the weaker yen, please provide a specific example.

Toyota operates in many currencies internationally, not only yen.

On the exchange you get a 40% more yen for your dollar... that's why its revenue looks 40% higher although the sales are the same.

-1 ( +1 / -2 )

Weak yen gives Japan's automakers temporary relief from China pain

And their kicking ass everywhere else.

-2 ( +3 / -5 )

BOJ is working hard to keep them alive at the expense of the global purchasing power of the Japanese people but they should just rip the band aid and let them fight on equal grounds on the global market.

 

You know the US bailed out GM and Ford and Chrysler?

-2 ( +2 / -4 )

In fact, the total semiconductor sales in 2022 are 55 billion dollars in South Korea and 50 billion dollars in Japan, which is not much difference.

Both Japan and Korea are negligible in the global semiconductor market.

In fact, the total semiconductor sales in 2022 are 185.5 billion dollars in China and 142.7 billion dollars in America.

-2 ( +1 / -3 )

lunatic

If the raw materials get more expensive, products become more expensive too.

So why is the Japanese automobile industry profitable due to the weak yen?

Japan's GDP is rising more than expected, as many companies in other export industries are also making profits across the board.

If there is a reason other than the decline in sales prices overseas due to the weaker yen, please provide a specific example.

Soichiro Honda generously conveyed his motorcycle technology to Taiwan and South Korea.

Then, each country became able to make motorcycles, but unlike Taiwan, the reaction in South Korea was unacceptable to Soichiro Honda, who provided the technology. His reason for not getting involved with South Korea is not a problem that can be easily described as racism. Judging only on the surface will lead to a misunderstanding of the true nature of things.

-2 ( +1 / -3 )

Sorry, but Honda & Toyota need more than a weak yen to get an edge over Chinese automakers. EV is the future and China is Pressing ahead, and if these two Dinosaurs don't evolve they will become local businesses for sure.

-3 ( +12 / -15 )

"They are struggling in the Chinese market,

And how are other non -Chinese Cars makers doing?

Stellantis CEO Says Volkswagen, GM ‘Under Pressure’ in China

https://www.bloomberg.com/news/articles/2023-07-26/stellantis-ceo-says-volkswagen-gm-under-pressure-in-china#xj4y7vzkg

 

It looks like they are having the same problem

 

And Toyota is doing well in China.

Toyota profits surge as carmaker holds its own in China

Sales increase in all key markets despite Japanese group’s slow electric transition

https://www.ft.com/content/f0b174b6-7b2a-4baf-b545-95a090b31022

-3 ( +1 / -4 )

Japanese economy never got out of stagnation.

Japan GDP grew 6%, easily beating expectations on robust exports

https://www.cnbc.com/2023/08/15/japan-q2-gdp.html

-3 ( +3 / -6 )

A weak yen invites soaring prices of raw materials, but the selling price of products can be kept low, so profits can be made.

This point is wrong.

If the raw materials get more expensive, products become more expensive too.

Even Soichiro Honda, the founder of Honda, warned in his book not to get involved with South Korea.

That's pretty racist. No wonder Japan and Korea ain't getting along.

-3 ( +2 / -5 )

 temporary relief

Are they really excited about this?

The problem isn't China or any other country.

It's Japan that is the problem.

No longer at the top of the game.

No innovation, no new ideas, no nothing.

All they do now, is follow.

Start creating, start keeping it fresh, get rid of the dinosaurs and let the young minds shine.........

THEN, Japan will no longer worry about anyone else, they can just lead the way.

BUT of course................................this is complacent Japan.

-4 ( +7 / -11 )

Are you sure? Korean EVs are light years ahead of Japanese EVs and even Chinese EVs are miles better than Japanese EV.

 

 

Please explain the following:

With The 745-mile Solid-state Battery, Toyota Just Became A Force To Reckon With

https://www.topspeed.com/toyota-745-mile-solid-state-battery/

-4 ( +3 / -7 )

Yubaru- Exactly. Agree 100%

-5 ( +5 / -10 )

The solid-state battery is so past.

The Chinese CATL battery is the new thing now.

-5 ( +2 / -7 )

The Chinese are currently looking to export more vehicles.

They produce at way under the cost of a European or American made model and let’s not forget where the battery materials come from.

For these reasons China will dominate

-6 ( +5 / -11 )

China became the world no.1 automobiles exporter this year. The weak Yen won't help much for Japan's auto industry exports, she will meet tough competitions from China cars!

-9 ( +7 / -16 )

@Yubaru

Oh and let's not forget that Japanese automakers have factories overseas, that are not directly affected by the yen/dollar rate, so this is rather misleading as well.

Yea, but the part shipment to overseas Japanese transplants and profit remittance back to Japan is affected by exchange rate.

-10 ( +2 / -12 )

At least Honda realizes Japan has fallen behind and is willing to adopt superior foreign(Korean) EV technology to stay competitive. The same isn't true of Toyota.

https://global.honda/newsroom/news/2023/c230301eng.html

LG Energy Solution and Honda Break Ground for New Joint Venture EV Battery Plant in Ohio

March 1, 2023

Local and state officials join global Honda and LGES executives in groundbreaking event

EV batteries from the facility, over 2 million sq. ft. in size, to be provided exclusively to Honda auto plants to produce EVs to be sold in North America

JEFFERSONVILLE, Ohio, February 28, 2023 – Honda and LG Energy Solution (LGES; KRX: 373220) today held the official groundbreaking ceremony for a new joint venture EV battery plant over 2 million square feet in size, to be located in Fayette County, near Jeffersonville, Ohio.

-10 ( +4 / -14 )

Japan’s auto industry will be decimated this decade-the Chinese are already beginning to dominate in Europe.

The yen needs to go way lower but the Chinese yuan can do the same…

-11 ( +7 / -18 )

Weak yen gives Japan's automakers temporary relief from China pain

Big deal. So what? The Japanese consumers on the other hand have no relief from their pain. In fact, the pain is increasing. And THAT will have long lasting effects on the economy.

Automakers are the last remaining large scale manufacturing business that Japan hasn't lost to SK and China. BOJ is working hard to keep them alive at the expense of the global purchasing power of the Japanese people but they should just rip the band aid and let them fight on equal grounds on the global market. The ones that survive will be healthier and can guarantee sustainable profitability for the foreseeable future without relying on the decimation the value of JPY. The ones that don't should be acquired by the highest bidder. No more protectionism against foreign buyers.

Well said! But failure to do the above is the exact reason why the whole Japanese economy never got out of stagnation.

-12 ( +12 / -24 )

@Chabbawanga

I just hope Japanese automakers make the right decisions before its too late.

It's already too late. Japan's auto industry will follow the footsteps of Japan's electronics and semiconductor industry.

Without them, the Japanese economy is going to be in a very tight spot

Japan is already switching to a service-based economy driven by finances and hospitality/tourism.

@antifun

Automakers are the last remaining large scale manufacturing business that Japan hasn't lost to SK and China.

Are you sure? Korean EVs are light years ahead of Japanese EVs and even Chinese EVs are miles better than Japanese EV.

@elephant200

The weak Yen won't help much for Japan's auto industry exports, she will meet tough competitions from China cars!

Most of Chinese auto exports are Teslas.

@Mark

these two Dinosaurs don't evolve they will become local businesses for sure.

Actually Honda is moving ahead by adopting GM/LG's Ultium EV platform.

The initial wave of North American Honda EVs will be Honda badged GM EVs assembled by GM(Honda Prologue is a Chevrolet Blazer EV while Acura ZDX is Cadillac Lyriq) , but Honda will be assembling GM platform based vehicles on its own lines down the road. Basically almost nothing inside Honda's first US market EVs will have Japanese component.

https://www.motortrend.com/news/2024-acura-zdx-vs-2024-cadillac-lyriq-ev-suv-spec-comparison/

2024 Acura ZDX vs 2024 Cadillac Lyriq: Attack of the Luxury EV SUV Clones

Separated at birth? Acura and Cadillac’s first production EVs share an awful lot under the skin.

Toyota on the other hand is insisting on "All Japan" EV strategy, where the every component is made by Japanese companies.

-13 ( +4 / -17 )

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