Japan Mobility Show returns, as industry faces turning point

Tokyo's auto show is back for the first time in four years and rebranded for the electric vehicle era, in a marketing overhaul that may be more reflective of industry aspirations than Japanese automakers' lagging battery-powered lineup.

The Japan Mobility Show, which opened on Thursday, comes at a critical moment for the domestic industry.

Toyota, the world's top-selling automaker, this year announced a strategic pivot to battery EVs, including plans to commercialize advanced batteries and adopt die-casting technology pioneered by Tesla.

Toyota's shift has helped silence criticism that it was too slow to embrace battery EVs. But the outlook is gloomier for some of its smaller rivals like Subaru, Mazda and Mitsubishi that may face a more daunting challenge in rolling out EVs, analysts say.

Meanwhile, China's top automaker BYD is the first Chinese carmaker to exhibit models at the show, and one of just three non-Japanese auto manufacturers to do so, along with German brands Mercedes-Benz and BMW.

And unlike many of the Japanese companies, who will be displaying concept cars, the three automakers all have shown battery EVs that are in production or are going to be in production.

There seems to be a "growing gap" between Japan's stronger automakers, such as Toyota and Honda that are producing record profits, and weaker players, said Koji Endo, head of equity research at SBI Securities.

Japan's auto industry is also facing pressure from high input costs and slumping sales in China, where Japanese brands such as Nissan and Mitsubishi have been hit harder than other non-Chinese manufacturers.

Toyota is displaying various battery-powered concept models at the show, including a sport utility vehicle, mid-sized pickup truck and a sports car.

The world's biggest automaker by sales has long advocated for a multipronged approach to reduce carbon emissions, which includes other electrified and alternative energy options besides battery EVs.

The company is showing new models of its Century and Crown luxury sedans, which it had earlier unveiled as plug-in hybrid and hybrid vehicles.

Nissan is displaying the battery-powered Ariya and Leaf crossovers and the compact Sakura, in addition to new battery EV concept models such as a luxury minivan.

The biennial show was not held in 2021 because of the pandemic. This year, it features a range of mobility technologies including autonomous vehicles, motorbikes, trucks and so-called "flying cars".

Yet despite the bid to appeal to a wider audience, Japanese automakers are grappling with growing pressure from a rapidly ageing and declining population that has fewer young people to buy cars, pressuring auto sales.

New registrations for passenger cars in 2022 hit their lowest annual level on record, according to data from the Japan Automobile Manufacturers Association that goes back to 1993.

Registrations declined 6.2 percent in 2022 from 2021 to 3.4 million vehicles.

Nearly a third of Japan's population of 124 million people was aged 65 or older as of May 1, according to government data.

2022 was the third consecutive year that new car sales stayed below 4 million, though they were hit by the fallout from a post-pandemic chip shortage, which disrupted auto production and supply.

In contrast to the darkening outlook in Japan, data from the ASEAN Automotive Federation shows that the auto market in Southeast Asia has been growing.

Passenger vehicle sales in seven Southeast Asian countries jumped 24 percent year-on-year to 2.2 million in 2022, the data showed, though Japanese automakers are battling against Chinese EV upstarts to maintain a share in key markets like Thailand.

Reuters