What is the state of the global automobile market? What kind of management strategy is required of Japanese companies today?

The automotive industry is currently undergoing a period of major change on a global scale, with markets and technologies changing rapidly. Innovative advances such as electric vehicles (EVs) and self-driving technology are creating a paradigm shift in the industry, with Tesla’s breakthrough and the rise of Chinese EV makers transforming the automotive market, impacting traditional automakers and intensifying competition throughout the industry.

The global BEV market has lost momentum and growth is slowing, and some automakers that had been aiming to shift to a BEV-only business have switched to a strategy of coexisting hybrid vehicles (HEV/PHEV), such as Japanese automakers. In the U.S., the second Trump administration will take office in January 2025, casting a dark cloud over the decarbonization of mobility.

However, despite the uncertain outlook, the challenges that the automotive industry must tackle are clear. To meet the climate-neutral goals of the Paris Agreement, a technology-neutral approach is required that mobilizes all possible technologies, including not only BEVs, but also engine-powered vehicles, hybrid vehicles, hydrogen, eFuel, and biofuels.

In addition, with growing concern about environmental issues, a shift to EVs is inevitable as the world moves in the direction of a decarbonized society, and the development of electrification and automated driving technologies is a pressing issue for all automakers. In this context, understanding the global market and developing a competitive strategy that does not get left behind in the industry-wide transformation are key.