Japan, Former Car Powerhouse, Surpassed by India in New Car Sales Last Year, Ranking 4th

Japan's New Car Sales Drop to 4th Place Globally
GM Regains 1st Place in US Market, Surpassing Toyota
New Car Production Disrupted by Vehicle Semiconductor Shortage
Seeking Competitiveness Through Electric Vehicle Launches

Toyota Motor Corporation. [Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Japan, once boasting the world's third-largest new car sales volume, was surpassed by India in new car sales last year. Toyota also recorded poor performance, losing its top spot to General Motors (GM) in the U.S. market. Analysts suggest that Japanese automakers' competitiveness is declining as global semiconductor supply shortages disrupt new car production.

◆ Japan Falls Behind India in Global New Car Sales... GM Surpasses Toyota in U.S. Market

On the 6th, Nihon Keizai Shimbun reported that India recorded at least 4.25 million new car sales last year, surpassing Japan's approximately 4.201 million units and claiming the world's third position. As in 2021, China and the United States remained the top two countries with the highest new car sales globally last year. Meanwhile, Japan, which ranked third in 2021 with 4.44 million new cars sold, dropped to fourth place in last year's sales rankings.

Japanese automakers also posted poor results individually. Toyota, which had maintained the top position in the U.S. market, fell to second place after being overtaken by GM within a year. According to The Wall Street Journal (WSJ), GM sold 2,258,283 new cars in the U.S. market last year, a 2.5% increase from the previous year. Toyota's sales, however, dropped 9.6% year-on-year to 2,108,455 units.

◆ Semiconductor Supply Shortage Disrupts New Car Production... Struggles in Domestic Market

Nissan's electric car 'Sakura' launched in June last year [Image source: Screenshot from Nissan homepage]

The reason Japanese automakers struggled with new car sales last year was due to production disruptions caused by semiconductor shortages. After COVID-19, semiconductor manufacturers reduced operating rates anticipating a decline in vehicle demand, which led to decreased semiconductor production. However, contrary to expectations, automobile demand quickly recovered, resulting in a severe supply shortage.

As a result, Nissan halted orders for its electric vehicle 'Sakura' just four months after its launch in October last year. Some models from Toyota and Honda are also reported to require more than six months from order to delivery due to semiconductor shortages.

Due to production disruptions stemming from semiconductor shortages, new car sales by Japanese automakers in the domestic market also plummeted. According to statistics from the Japan Automobile Dealers Association, sales of Japanese automakers' vehicles excluding kei cars dropped 8.3% year-on-year to approximately 2.56 million units. This is the lowest record in 54 years since the statistics began in 1968.

In contrast, Indian automakers focused on low-cost vehicles that use fewer automotive semiconductors instead of hybrid models, resulting in fewer production disruptions compared to Japanese companies.

◆ Japanese Automakers in a Dilemma... Seeking Competitiveness Recovery through Electric Vehicles

Electric vehicle 'Apilla' launched by SHM, a joint venture between Honda and Sony [Image source: SHM official website screenshot]

Japanese automakers, which have experienced a slump due to poor performance, are drawing up plans to regain competitiveness through electric vehicles. Honda partnered with Japan's leading IT company Sony to establish the joint venture Sony-Honda Mobility (SHM) and unveiled the electric vehicle Afeela for the first time at the world's largest information technology expo on the 4th.

SHM plans to start pre-orders in 2025 and sell mass-produced vehicles in the North American market in 2026. Honda intends to leverage Sony's software strengths by integrating the PlayStation gaming console into the vehicle and creating new cars with entertainment features.

Nikkei explained, "Going forward, software capabilities in vehicles will become a key competitive area in the electric vehicle industry," adding, "Honda's new car is distinctly different from existing models that emphasize fuel efficiency and driving performance."

This content was produced with the assistance of AI translation services.