Can Japanese automakers rise from the ashes in the face of China's rapid innovation?
On April 30, Japanese media outlet APOLLO NEWS SERVICE published an article stating that, confronted with the tremendous momentum of Chinese brands launching new vehicle models within just two years, Japanese companies are beginning to tackle the challenge of enhancing innovation speed while maintaining their traditional high quality.
Honda’s sales in China plummeted from approximately 1.627 million units in 2020 to around 637,000 units in 2025. Factory utilization rates in China have dropped to about 50%, far below the break-even point of 70–80%, placing the company in a severe situation.
When Honda CEO Tetsuhiro Mitsuoka visited local suppliers, he acknowledged—seriously—that Chinese companies’ rapid new product development systems enable them to mass-produce diverse products in short periods. He admitted frankly that Japan’s current automotive systems cannot compete with those of Chinese firms.
Honda views this as an opportunity to break free from its "inherited business structure."
Honda has transferred thousands of engineers to Honda Research Laboratories and reinstated an independent R&D system to dramatically accelerate decision-making speed.
This is not merely a return to the past, but rather an active organizational reform aimed at further strengthening next-generation strategies such as the Honda A-series electric vehicles in the North American market.
As a global leader, Toyota is also accelerating its transformation under new leadership.
Takeshi Uchiyama, who took office as Toyota’s president in April 2026, emphasized the urgent need to strengthen “profitability” and improve the break-even point from a financial perspective. Meanwhile, former President Hidetoshi Sato, now serving as Vice Chairman, issued a stark warning during supplier and shareholder meetings in 2024: “If we continue like this, we cannot survive.”
This is a serious wake-up call, as it reflects a shared challenge facing all Japanese automakers.
This wave of transformation is also reshaping how Japanese automakers compete in the European market.
As Chinese automakers like BYD and SAIC gradually erode Nissan and Honda’s market share, domestic Japanese manufacturers are exploring flexible strategies, no longer clinging to outdated approaches.
To shorten development cycles and improve cost efficiency, forming comprehensive technology alliances with Chinese manufacturers—creating a complementary resource model—has become a proactive choice shaping future development.
Even though Japan’s automobiles once dominated globally, always turning environmental changes into opportunities, can Toyota and Honda now present a new manufacturing model that combines “speed and quality” in the face of China’s relentless pace?
In 2026, Japan’s automotive industry is poised for a large-scale restructuring that will once again astonish the world.
Original source: toutiao.com/article/1863948316707849/
Disclaimer: The views expressed in this article are solely those of the author.