Japanese Prime Minister Fumio Kishida: Japan will formulate a 10-year strategic

2024-03-16

Japanese Prime Minister Fumio Kishida said on Thursday that Japan and Southeast Asia will formulate a 10-year strategic plan to take a leading position in the next-generation automotive industry.

Recently, Japanese Prime Minister Fumio Kishida stated that Japan and Southeast Asia will develop a 10-year strategic plan to secure a leading position in the next-generation automotive industry, which is currently undergoing a revolutionary transformation. The next decade will be crucial in determining who can come out on top in this competition. He revealed that Japan will announce a 10-year automotive strategy this autumn, extending to 2035. Kishida emphasized that the automotive industry is a symbol of the long-term economic partnership between Japan and ASEAN countries, and this strategy aims to ensure that ASEAN can maintain its core position in the global new generation of the automotive industry. Japan will collaborate with the ASEAN-ERIA (Economic Research Institute for ASEAN and East Asia) to propose the prospects of the automotive industry over the next 10 years and the strategy to become a hub for hybrid vehicles, electric vehicles, and other environmentally friendly vehicles.

This strategy will be developed in cooperation with the ASEAN and East Asia Economic Research Institute, headquartered in Jakarta. The ASEAN group includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Japan and ASEAN have a long history of cooperation in fields such as semiconductors and automobiles.

According to media reports, to cope with the increasingly fierce competition in the electric vehicle market, Japan is said to be planning to establish its first alliance with ASEAN for automobile production and sales in the Southeast Asian region.

Advertisement

As reported by the Japanese Nikkei newspaper, the two sides plan to hold a meeting of economic ministers as early as September this year and formulate a provisional joint strategy that will last until around 2035. The strategy is expected to cover multiple areas, including personnel training, decarbonization, mineral resource procurement, and biofuels.

Japan is said to be allocating 140 billion yen (about 900 million US dollars) from the Ministry of Economy, Trade and Industry's budget to help the ASEAN market train a new generation of automotive workers with new technologies.Additionally, Japan will promote its carbon dioxide emission measurement technology to facilitate the automotive industry's transition to renewable energy. Japan and ASEAN will also consider joint procurement of rare materials for the production of electric vehicle batteries and cooperate in battery recycling. Both sides are currently considering the development of biofuels made from waste cooking oil to promote the high environmental standards of vehicles within the Japan-ASEAN alliance.

"With the rise of Chinese electric vehicles in Southeast Asia, Japan intends to join ASEAN in formulating the first joint strategy for automobile production and sales in the region." For many years, Japanese car manufacturers such as Toyota and Honda have established factories in ASEAN, with an annual production of over 3 million vehicles, accounting for 80% of the total production within the ASEAN region.

This joint strategy between Japan and ASEAN includes the following four points. First, to improve the overall level of the automotive industry by cultivating talent, the funding for talent cultivation mainly comes from the 140 billion yen (approximately 6.5 billion yuan) subsidy confirmed by the Japanese Ministry of Economy, Trade and Industry in the 2023 supplementary budget, including digital education for employees of factories and parts supply chain enterprises. Second, to achieve decarbonization of the automotive manufacturing process, mainly by visualizing the carbon dioxide emissions of factories using Japanese technology and promoting the use of renewable energy in the manufacturing process. Third, to ensure investment in new fields such as mineral resources and biofuel development, including joint procurement of rare minerals needed for new energy batteries and research on battery recycling, as well as research and development of biofuels using waste oil. Fourth, Japan and ASEAN will share information with the outside world.

ASEAN is one of the important industrial layouts globally and is also the location of factories for many Japanese car manufacturers. Japanese car manufacturers assemble over 3 million vehicles in ASEAN each year, accounting for about 80% of the total output, most of which are exported to the Middle East and other regions.

So far, the strategy of Japanese car manufacturers in ASEAN has been carried out independently. However, with the intensification of electric vehicle market competition, the Japanese government seems to have made up its mind to intervene in the market to achieve a united front.

According to a senior executive of an automobile manufacturer, due to factors such as rising interest rates, the overall demand for cars in Southeast Asia is showing a downward trend, but the local car subsidies are very generous. Unfortunately, many car manufacturers have not been able to seize these favorable conditions.

The constantly changing market has intensified the sense of urgency for several Japanese car manufacturers. Last week, Honda of Japan promised to double its investment in electrification and software by 2030, reaching about 65 billion US dollars. Toyota announced an increase in its fiscal year hybrid car sales target to 1 million vehicles and will increase production capacity to 2 million vehicles per year.

Honda CEO Toshihiro Mibe said at a press conference that although the demand for electric vehicles among consumers seems to be stabilizing recently, "we have not changed our view that electric vehicles are the best solution (to achieve carbon neutrality). In the long run, we are confident that the transition to electric vehicles will make progress."

Leave a comment

Submit