Japanese Carmakers Surge As Hybrid Cars Gain Ground

May 14, 2024 00:55

Japanese carmakers are among the major GDP growth contributors of the Japanese economy. Although the Japanese car industry suffered as consequence of the local economy’s struggles in previous decades, things seem to change.

Despite the onslaught of electric vehicles (EV), coming from the US such as Tesla or China such as BYD, in the last few years, Toyota, Nissan and other Japanese top carmakers seem to have found ways to respond.

In this article you will have the opportunity to read how some Japan’s car brands have performed and what could be expected in the next months.

Hybrid Cars: The Electric Vehicle (EV) Nemesis?

For many years, various car makers produced prototypes of electric vehicles, showing them off in car expos. Tesla, Elon Musk’s company, was the first to design and mass produce models that could be used without issues finding consumer audience among car enthusiasts and gadget users. Being able to sell electric vehicles equipped with the latest technology like autopilot driving features made Tesla grow exponentially, climbing to top market level.

Mercedes, BMW, Stellantis Group, Ford and others were slower to adopt, losing valuable ground. As electric vehicles use different types of tech than regular internal combustion engine (ICE) cars, especially batteries, major changes were needed in their infrastructure and suppliers. The cost and the fierce competition from Tesla and Chinese companies, such as BYD, have brought them in a difficult position as they struggle to adjust their range of models to the new reality.

At first, Japanese car makers seemed to be caught by surprise as they also didn’t seem to forecast the electric vehicle market’s upward trajectory. However, few expected that Toyota, for example, could utilise its knowledge on  hybrid technology and gain even more share in global car sales as it offered cheaper solutions than electric vehicles to drivers that would like to protect the environment. On the back of hybrid tech, Japanese car makers seem to stage a comeback after many years of staying in the sidelines of the car industry.

Toyota: Profit Jump in Jan.-Mar. quarter, Investments To Weigh On Profit This Year

Toyota is leading the way, boosting the comeback of Japanese manufacturers. In a report published on May 8th, Toyota executives noted that operating profit rose 78% in the January-March quarter. For the full year, it totalled 5.35 trillion yen ($34.5 billion), which according to analysts, it has been the first time for a Japanese company to top 5 trillion yen. The weaker Japanese yen that records all-time lows against the US dollar in the few last months and the reduced demand for electric vehicles in some of the strongest markets including the US provided support to Toyota’s surging hybrid vehicle sales.


Toyota’s CEO, Koji Sato, suggested that “we’ll make investments in order to firmly protect the supply chain from a perspective of sustainable growth. The latest results show that our efforts have borne fruit, but we need [to] keep growing with the vision to become a mobility company.

Nissan Strengthens, Warns Over Inflation And Increased Competition

On May 9th, Nissan published its financial results for the full year of 2023 and the fourth quarter of fiscal year 2023, ending March 31, 2024. The report showed profit for the fiscal year through March jumped 92% to 426.6 billion yen ($2.7 billion) as sales grew in all major global markets except China.

Commenting on the results, Nissan president and CEO Makoto Uchida said: “Through our Nissan NEXT initiatives, we have been working to strengthen our business foundation. From fiscal year 2024, we have launched a new business plan, ’The Arc’. We aim to achieve sustainable, profitable growth while providing high value to customers. We will do this step by step with a balanced product portfolio and by implementing optimal business strategies in response to market conditions and customer needs.”

“The Arc” business plan focuses on a broad-based product offensive, increased electrification, new approaches to engineering and manufacturing and includes the launch of 30 new models by 2026, including 16 electric vehicles.

Honda To Focus On Investments As Profit Booms In Past Fiscal Year

Honda, one of Japan’s largest car manufacturers, reported increased profits for the fiscal year through March on the back of the weak Japanese yen and strong vehicle demand in the US market.

According to Honda’s report, the company sold 2.8 million vehicles globally, half a million more than the previous year. However, the profit boost is unlikely to continue as Honda’s executives noted that the company would increase its investments on research and development that could lead to an around 10% profit decline.

Honda’s CEO, Toshihiro Mibe, said that “we aim to produce 2 million hybrids by 2030 and use that cash for electrification. Hybrids are our original weapon, and we will keep using that in our business.”

Just a few days ago, Mibe had said that he was seeing “good progress” in talks with Nissan  executives over a possible partnership to collaborate on producing EV components.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Miltos Skemperis
Miltos Skemperis Financial Content Writer

Miltos Skemperis’ background is in journalism and business management. He has worked as a reporter on various TV news channels and newspapers. Miltos has been working as a financial content writer for the last seven years.