Japan and ASEAN seek to join forces in the face of Chinese strength in electric vehicles

Japan and the Association of Southeast Asian Nations (ASEAN) They would be developing a joint strategy for the manufacture and sale of automobiles with the intention of joining forces in the face of the strength of Chinese automobile manufacturers. electric vehicles, according to the Japanese newspaper Nikkei.

The strategy would be projected until 2035 and could be announced in September of this year, at a meeting of the economic ministers of the countries involved, according to what the aforementioned financial newspaper reported on Monday.

The project comes as Chinese electric vehicle companies such as BYD and SAIC Motor gain ground in Japan, Southeast Asia and the rest of the world.

Japan and ASEAN would be considering cooperating in personnel training, decarbonization of production, acquisition of mineral resources, investment in new generation fields such as biofuels and the development of an information campaign on vehicles produced in their territories.

From the agreement, it is expected that Japan’s positioning in technological development will benefit ASEAN.

The growth of Chinese manufacturers poses a challenge to their Japanese competitors, including Toyota Motor and Honda Motor, with plants located in multiple Southeast Asian countries, where they manufacture more than three million vehicles a year, representing around 80% of total production in ASEAN.

An executive at a vehicle manufacturing company told Nikkei: “Demand for cars as a whole declined in Southeast Asia due to rising interest rates and other factors.””, before adding that the Chinese actors knew how to take advantage of the momentum of the “generous subsidies” to electric vehicles.

Thailand, for example, offers tax benefits to automakers that produce electric vehicles in the country, a program that Chinese firms such as BYD take advantage of and that led to the 85% of the electric vehicles sold there in 2023 were made in China, Nikkei reported.

Until now, Japanese automobile brands carried out their business in ASEAN on their own, but the strengthening of the presence of Chinese automobile companies in the region motivated the intervention of the Government of Japan to develop a joint strategy.

For personnel training, the country would be thinking of using the 140 billion yen (about 826 million euros or 900 million dollars) that its Ministry of Economy, Commerce and Industry contemplates in its budget for assistance to the Global South, a measure that seeks strengthen links with growing and resource-rich economies.

In the fields cataloged as ““new generation”, both parties consider acquiring materials used in electric vehicle batteries and exploring their recycling. Among the projects contemplated is the production of biofuels from used cooking oil.

Additionally, Japan and ASEAN will collaborate on analyzing the global automotive market in a bid to boost automobile exports.

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