Japanese carmakers join hands as they play catch-up

Strategy expected to boost efficiency of industry’s electric-vehicle development

- Walter Sim

Japan's car industry, which has stalled in the development of electric vehicles (EVs) amid what it often describes as a "once-in-a-century industry transformation", has now consolidated into two broad camps as it aims to make up ground lost to China.

In one camp is the world's largest carmaker, Toyota, whose group includes companies such as Daihatsu, Suzuki, Subaru and Mazda.

Total group sales in the year ended March came to 16.6 million vehicles, helped by its hitherto dominance in hybrid vehicles and combustion-fuel cars.

In the other camp are long-time competitors Nissan and Honda, which set aside their rivalry and joined hands in March, with Mitsubishi entering their alliance in August. The three companies had combined sales of 8.3 million units in the year ended March.

The partnership aims to leverage the economies of scale that will come with jointly developing technology and cross-optimising parts across their brands, as well as sharing supply chains and resources.

But they will still produce their own vehicle models.