The Second Largest Automakers in Japan Join Forces
Honda and Nissan, the second largest automakers in Japan after Toyota, have decided to collaborate on electric vehicles (EVs). But why are these two giant names taking this step? To understand the answer to this question, it's enough to look at the major changes happening in the Chinese automotive market.
Significant Changes in the Chinese Market
Nissan's sales in China dropped from 1,182,000 in 2019 to 794,000 in 2023. Similarly, Honda's sales declined from 1,656,000 in 2020 to 1,234,000 in 2023. Hyundai-Kia sold 1,800,000 vehicles in China in 2016, but only 310,000 vehicles in 2023. These dramatic declines clearly show that foreign automakers are losing their market share in China. Brands like VW and Mercedes have tried to prevent market loss by offering incredible price cuts.
Why Electric Vehicles?
One of the main reasons foreign manufacturers are experiencing market losses in China is the lack of sufficient electric vehicle models. However, the bigger problem is the scale of production that China has achieved and the cost advantage it brings. No country in history has reached a production capacity of 30 million vehicles. This massive scale in China has reduced costs and provided a competitive advantage. Therefore, brands like Nissan and Honda have to collaborate; if they can't stop this trend in China, they will take a significant hit in other markets as well.
Wrong Decisions and Solutions
Wrong Decisions: Some decisions made in the past were flawed. It would have been more logical to initially promote hybrid vehicles and allocate significant resources for electric vehicles to catch up with China and then transition.
Anti-Car Movements: Anti-car movements that started in European cities initially sounded appealing; however, it was later realized that these movements would hit luxury German cars the hardest.
Segment Limitations: Confining cars to only A and B segments in Europe has led to German manufacturers not being able to make a profit. Additionally, anti-SUV movements have threatened the future of the German automotive industry.
E-Fuel Solution: E-fuel, a logical solution, had been in the pipeline for a long time, and it has now been understood that it's time to implement this solution.
Success of Electric Vehicles: These decisions do not show that electric vehicles have failed, but rather that Europe needs time to adapt to this change.
Conclusion
Honda and Nissan's collaboration on electric vehicles is of great importance not only in the Chinese market but also globally. China's massive production capacity and cost advantage force other manufacturers to develop more competitive strategies. While wrong decisions and anti-car movements in Europe challenge manufacturers, these problems can be overcome with logical solutions. Electric vehicles and alternative fuels will continue to be the cornerstones of the automotive industry in the future.
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