TOKYO -- The Japanese auto industry saw extensive realignment in 2016 as carmakers joined hands to sharpen their edge in a global race demanding the adoption of myriad new technologies. How these partnerships fare will be a focal point in the new year.
One of the major consolidation steps was Nissan Motor's investment in Mitsubishi Motors, which admitted in April to falsifying fuel-economy tests. CEO Carlos Ghosn and other Nissan managers closed on the 237.3 billion yen ($2.01 billion at current rates) purchase of a 34% stake in Mitsubishi within a month after the scandal surfaced.
The unusually speedy move was no coincidence. The two automakers had cultivated good relations since their 2011 alliance in the minicar business. Ghosn, who also serves as CEO of Renault, indicated that the capital partnership was bound to happen as a result of mutual considerations, although the fuel-economy issue did accelerate the talks.
Nissan and Mitsubishi aim to take advantage of greater scale to raise efficiency via joint procurement and shared use of production facilities. They also seek to share the platforms and parts of electric vehicles -- a strength of Nissan -- to cut costs. Their rivals apparently include Germany's Volkswagen, which has been on the offensive in electric vehicles.
For fiscal 2016, the research and development spending of seven major Japanese carmakers is seen totaling a record 2.8 trillion yen or so. Next-generation vehicles demand a variety of new technologies, such as artificial intelligence and electric drivetrains. It is increasingly difficult for smaller automakers to survive on their own.
Old ways no more
Suzuki Motor, which enjoys the top share in the major market of India, is no exception. The company said in October it will negotiate a partnership with Toyota Motor. Chairman Osamu Suzuki told a press conference then that the company would stall even in its strongholds of Japan and India if it just continued its tradition of making good, affordable cars.
Even for an industry titan like Toyota, having allies like Suzuki means a great deal because foreign rivals are ahead of the game in setting standards of next-generation technologies such as autonomous driving.
To promote adoption of new technologies, Toyota formed a comprehensive partnership with Mazda Motor in 2015 and it turned minicar unit Daihatsu Motor into a wholly owned subsidiary last August.
Even Honda Motor, conventionally known to prefer working on its own, is shifting gears. The company in December began considering joint research with Google's self-driving arm, Waymo.
Now, the Japanese auto industry has just three major camps: one led by Toyota; the Nissan-Mitsubishi collaboration which is tied to France's Renault; and Honda. This year, drawing up concrete collaboration ideas will be the focus of competition.