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Japan and ASEAN Unite Against China: Joint Auto Strategy in the Works

Daniel Kim Views  

Japanese Prime Minister Fumio Kishida is delivering a speech at the Japan-ASEAN (Association of Southeast Asian Nations) Friendly Cooperation 50th Anniversary Luncheon held at the Japan Keidanren (Japan Business Federation) in Tokyo, Japan, on December 18, 2023./Reuters-Yonhap News

According to a report by the Nikkei, a Japanese-language daily newspaper, on the 20th, Japan and the Association of Southeast Asian Nations (ASEAN) will establish the first joint strategy for automobile manufacturing and sales within ASEAN.

Nikkei reported that the aim is to summarize the joint strategy for 2035 at the Japan-ASEAN Economic Ministers’ Meeting, which will be held on the 9th. This strategy includes estimating the global automobile market outlook, including emerging countries, by 2035.

According to Nikkei, the joint strategy encompasses specific cooperation issues, including elevating the overall industry through talent development, decarbonizing manufacturing processes, investing in next-generation fields such as securing mineral resources and developing biofuels, and disseminating information jointly outside Japan and ASEAN.

Nikkei explained that Japanese automakers plan to secure a defensive line in ASEAN, where Chinese electric vehicles are emerging, by promoting decarbonization (carbon neutrality), technology cooperation, and talent development using subsidies from the Japanese government according to this strategy.

Japan’s and ASEAN’s joint strategy mainly targets Chinese vehicles, but it is also expected to affect Hyundai and Kia Motors, which are active in securing markets in ASEAN.

Japanese car manufacturers such as Toyota and Honda have long built factories in ASEAN. They produce more than 3 million units annually, which accounts for 80% of the region’s automobile production, and export them to the Middle East and elsewhere.

Nikkei analyzed that while Japanese car manufacturers have been independently promoting their businesses in ASEAN, the need to establish a joint strategy at the government level has increased due to the recent expansion of Chinese vehicle companies such as BYD and Shanghai Auto Group affiliates. ASEAN also expects to benefit from cooperating with a trustworthy Japan for technology and talent development.

Thailand has a subsidy and tax-cut support system for automakers producing electric vehicles. According to Nikkei, Chinese companies such as BYD have utilized this system, accounting for 85% of electric vehicle sales in Thailand last year.

In response, Mitsubishi Motors is considering cooperating with PTT, the Thai state oil company, to produce, sell, and export electric vehicles. Toyota is collaborating with Thailand’s largest conglomerate, CP Group, to promote a demonstration of carbon dioxide reduction through the electric vehicle model of its flagship pickup truck, the Hilux, and the production of hydrogen-based biogas as a raw material, Nikkei reported.

Daniel Kim
content@viewusglobal.com

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