EDITOR: | July 21st, 2014

Hybrid and electric cars to help Japan fight way back into Chinese market

| July 21, 2014 | No Comments

Japan is fighting to regain market share in China’s automobile sector with hybrid and electric cars being in the forefront of the effort. Nissan Motor has launched a demonstration test of its 300 electric vehicles in three Chinese cities ahead of the release of the EVs in China this autumn. And, in a research development, 3-D printing is coming to the electric car business.

According to a report in China Daily, Japanese carmakers jointly held a market share of 19.4% in 2011. At their peak in 2008, they had more than 30%. For the past two years market share was down to 16.4%. The collapse was due to the diplomatic row over the disputed islands – the same dispute over the Senkaku Islands, a group of small uninhabited islets known as the Diaoyu Islands in China, that saw China freeze rare earth exports to Japan.

But in the first half of 2014 Japanese brands sold about 1.46 million cars in the first half, up 15.5% from the same period last year. Nissan, Toyota, Honda, Suzuki and Mazda all reported a year-on-year increase of more than 10% in the first six months, the newspaper reported. Volkswagen and Hyundai both developed a number of new variants based on the same model, a strategy that proved to be very successful in China because local customers are keen on new products.

Chinese observers believe some Japanese carmakers expect to make a breakthrough by localizing the production of gasoline-electric hybrid vehicles and key parts. Toyota is currently producing the Prius and a hybrid version of the Camry in China but the core parts are imported. China Daily says Toyota opened an R&D center in Changshu, Jiangsu province, in 2013 to prepare for local production of hybrid powertrains next year that will lower the price. Honda is also to begin making hybrids in China (it currently imports them from Japan), promoting its Accord, Vezel and Fit models at its local plants in two years.

“Unlike the European carmakers that focus on plugin hybrids and pure electric cars, Japanese carmakers are making a big bet on gasoline hybrid vehicles,” the newspaper reports. “Those are still fueled by gasoline with electric motors as auxiliary power, while plug-in hybrids use a combustion engine only to recharge batteries.”

Here’s the key for the Japanese: China offers incentives for plug-in hybrid and pure electric cars, which of course apply to all makers, Chinese and foreign, but not for gasoline hybrid machines. Japanese automakers clearly believe the last category is where they have a distinct competitive edge.

But now the Japanese are also looking to raise their profile in pure electric cars. Nissan’s test 300 vehicle program is, according to the Nikkei news service, the company’s attempt to catch up with its European rivals in the Chinese market, where worsening air pollution is increasing demand for EVs and other eco-friendly vehicles. Then there are those incentives: the Chinese government plans to promote a total of 500,000 EVs and plug-in hybrid vehicles by 2015.

The competition will be keen: Tesla Motors and Daimler plan to unveil high-end EVs to sell for over 6 million yen ($58,445), that price even after subsidies for eco-friendly car purchases provided by Chinese local governments But Nissan’s strategy is to market low-priced EVs in Guangzhou city which was the place chosen as a test ground for promoting EVs, and Nissan signed an EV supply deal with the city in 2011. The price for the Nissan e30 has not been disclosed. But the Venucia R30 new subcompact from the Japanese car maker is priced at less than 50,000 yuan ($8,059).

Meanwhile Shanghai has issued 1,436 free licence plates to electric car buyers as of June as a way to encourage people to use new-energy cars. The Shanghai municipal government has set a target to put 13,000 green vehicles into use by the end of next year, and among them more than 30% will be brands out of Shanghai. A total of 1,800 charging spots will be installed around Shanghai by the end of 2014. And, in another move, China’s state council, or cabinet, said last week that buyers of new energy vehicles — fully electric, hybrid and fuel cell cars — would not have to pay the purchase tax, which is 10% of a vehicle’s net value, from September to the end of 2017.

And two new technology developments:

One, students at Shanghai’s Tongji University, have built their own pure electric car. They designed about 30% of the parts and components using 3-D printing technology, which helped them cut the car weight by 65% and saved 90% on materials compared with traditional technology, according to Chinese press reports.

Two, GLM, a Kyoto-based developer of electric vehicles, has received government safety certification for its sports car, the Tommy Kaira ZZ, enabling it to launch Japanese production and European exports this year. The company aims for 3 billion yen ($29 million) in sales for the fiscal year ending March 31, 2016. The vehicle can accelerate from zero to 100kph in 3.9 seconds and travel 120km on a single charge.


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