Everyone is learning from China Speed, and the local alliance of Japanese automakers is likely to disintegrate.

The once highly stable Japanese automotive alliance is now facing the crisis of disintegration.

For a long time, the relationships between Japanese automakers have been closely linked through complex capital interweaving, the "Keiretsu" supply chain structure, and crisscrossed alliances.

As is known to all, in the traditional landscape of Japan's automotive industry, this ecosystem that integrates both cohesion and competition is mainly divided into two major camps. One is the huge ecosystem centered on Toyota, which connects brands such as Subaru, Mazda and Suzuki through shareholding. The other is an alliance formed by Nissan, Mitsubishi, and later Honda.

In addition, driven strongly by the Japan Automobile Manufacturers Association (JAMA), the seven traditionally competitive Japanese automakers are moving towards full standardization of non-competitive components. They are trying to break down past barriers to jointly develop and procure invisible general parts for consumers such as wiring harnesses, hoses and fasteners to cope with external challenges.

However, in the face of the sweeping transformation of the global automotive industry, especially the "China Speed" that is completely reshaping the competition pattern of the global automotive industry, this traditional pattern that has been maintained for many years is undergoing drastic evolution. The local alliance of Japanese automakers that was once unshakable in the international market is now facing unprecedented disintegration pressure.

Last year, Chinese automakers overtook their Japanese rivals in global car sales and ranked first in the world for the first time. A large part of the reason lies in the extremely fast speed of Chinese automakers in developing new models, which gives them huge competitive advantages. It only takes two to three years to complete the R&D of a new model, while Japanese automakers usually need three to four years.

Therefore, some analysts said that reducing the development time of new models has become one of the top priorities for Japanese automakers at present. Most importantly, the shortened intelligent iteration cycle of Chinese electric vehicles has forced traditional Japanese automakers to break their previous closed and slow development mode, and even begin to learn from their Chinese counterparts in reverse.

Catching up by learning from the China Speed

Recently, Subaru announced that it will build electric vehicle prototypes in half the time to meet the challenges in the Chinese market. It is worth noting that Subaru has no production bases in China, and it only sold 2,000 vehicles in China in the fiscal year ending March 31. However, Subaru regards the faster and cheaper planning and production methods in China as the new global benchmark.

In October this year, at a test track north of Tokyo, Subaru displayed the test vehicle of its next-generation electric vehicle prototype, which is equipped with a brand-new electric architecture inside. This marks that the automaker intends to get rid of its dependence on Toyota and strive to catch up with the ultra-high-speed R&D pace of Chinese competitors.

Thanks to active digital modeling, overlapping planning phases and early coordination with suppliers, Subaru's engineering executive said at a press conference on October 18 that these technologies can cut the time Subaru needs to develop and verify vehicles by half, and reduce the overall time to production by up to 40%.

Coincidentally, in September this year, Suzuki Motor said it plans to halve the development time of new models to catch up with the rapid changes in the automotive industry led by China. For vehicles adopting standardized platforms, Suzuki aims to shorten the previous 40 to 48-month development cycle to 24 months by 2030.

In Japan, Suzuki Motor has always been strong in the field of light vehicles. As competition in this segment becomes increasingly fierce, including the entry of BYD this year, Suzuki describes its model as "a just-right electric vehicle that fully considers how customers use cars in their daily lives and the challenges they face, which can only be understood with Suzuki's expertise in manufacturing and improving light vehicles."

Leaders of Suzuki explained that Suzuki will change its car development method from a sequential process to synchronous parallel development, so that planning, design, production, quality and procurement all work towards the same goal from the very beginning. "This is not just a matter of improving efficiency or reducing costs. When we think about what Japan needs to do to keep up with the pace of Chinese automakers, I think we need to take measures to speed up."

The same goes for Mitsubishi Motors. Recently, Mitsubishi Motors has increased the number of models developed independently of Nissan. The next-generation Outlander SUV, which is expected to be launched around 2028, will adopt a self-developed platform. The Outlander used to be the flagship model of the cooperation between the two sides, sharing most of the main components with Nissan, but Mitsubishi Motors finally believes that independent development can bring higher profitability.

Since Nissan's investment, Mitsubishi Motors' strategy has often been aligned with Nissan, but the deterioration of Nissan's own financial situation has reduced its support capacity. At Mitsubishi Motors' annual general meeting of shareholders in June, insiders of the company served as chairman and president for the first time, which means that the relationship between the two companies is gradually shifting from a parent-subsidiary relationship to a loose cooperative relationship while pursuing their own independent development.

In fact, back in August, Honda also stated that it has begun to use artificial intelligence to help design its car bodies. Honda's policy is to halve R&D costs, R&D time and R&D working hours by 2025. Its goal is to halve the R&D cycle of minor facelift models starting from FY2026, and halve the R&D cycle of full facelift models starting from 2028.

There is also Nissan, which draws on the agile development experience of Dongfeng-Nissan and uses AI technology and digital simulation to optimize the testing and design phases. Nissan plans to drastically shorten the development cycle of mainstream models from 50 months to 30 months, and the development cycle of its latest-generation iconic Skyline series has even been compressed to 26 months.

It can be clearly seen that in the past few decades, Japanese automakers have achieved extremely high quality control and profit monopoly by relying on close internal alliances. However, in the face of the China Speed, this closed alliance with the core of working slowly to produce fine products is disintegrating from the inside. Some people say that the stable alliance that Japanese automakers have long been proud of is turning into a Nokia moment that hinders survival in front of the rapid iteration of the intelligent electric era.

The China Speed is only a superficial phenomenon

Only 20 years ago, Chinese cars were mainly regarded as cheap imitations of European or Japanese cars. Local manufacturers lagged far behind global automakers in technology, design, safety and quality, while Volkswagen, General Motors, Toyota and other foreign companies dominated the Chinese market.

Over the years, global automakers have established joint ventures with local Chinese partners. For Volkswagen, General Motors and other automakers, this is the price to enter the huge market, but at the same time, China has also gained manufacturing experience, well-trained engineers, suppliers and technologies.

It is worth noting that European and Japanese companies have accumulated decades of experience in the production of gasoline and diesel engines. Toyota, Honda, Mercedes-Benz, BMW and Volkswagen have advanced technologies, patents, manufacturing processes and huge supplier networks that are difficult for other companies to catch up with. However, the real turning point came when the world began to shift from internal combustion engine vehicles to electric vehicles.

Electric vehicles offset this advantage to a certain extent, as they no longer contain complex gasoline engines, traditional transmissions or a large number of mechanical components. Instead, batteries, motors, power electronics, software and vehicle control systems have become key components. China has started to build a new automotive industry based on these technologies, and has formed a huge ecosystem.

Factories for automobiles, batteries, displays, electronic components, sensors, motors, metal parts and software all operate in the same production environment. Automakers can almost quickly find suppliers for any component in the domestic market, and usually even find them in the same industrial zone. This not only saves costs, but also greatly speeds up the development of new models.

At the same time, Chinese enterprises are no longer limited to exporting complete vehicles, but have started to build factories overseas. This allows them to avoid some tariffs, reduce logistics costs, create local jobs, and position cars as products manufactured specifically for specific markets, rather than imports from China.

Southeast Asia has become the largest region for Chinese automakers to build overseas factories. According to the forecast of the International Energy Agency, this region will account for more than half of China's total overseas automotive production capacity by 2025. And this is just the beginning. China's top ten automakers have announced their goal of selling more than 7 million vehicles to overseas markets by 2026, almost twice the plan of the previous year.

Some people say that the challenge posed by Chinese automakers to traditional automakers is structural and systematic, not just product-based. Simply launching another electric vehicle will not work, because traditional automakers operate in a completely different business model from their Chinese competitors.

This year we can see that historic reversals have taken place in the Chinese joint ventures of Japanese automakers such as Honda, Toyota, Nissan and Mazda. They have all chosen to fully delegate the rights of product definition, intelligent platform and component procurement to local Chinese teams or partners, with the Japanese headquarters only retaining brand and quality control.

In fact, almost all foreign automakers operating in China are facing the same dilemma. Due to falling behind in software, batteries and vehicle platforms, foreign brands have turned to their Chinese partners to continue to stay in the market. However, even with Chinese technologies, there is no guarantee that they can compete with local competitors in speed, execution or consumer appeal.

This actually shows that launching new electric vehicles is nothing more than putting a new shell on the old business model. The expansion of Chinese automobiles is forcing traditional automakers to completely abandon their old business models. They not only need to change their product lines, but also are forced to transform into software companies, energy suppliers and vertically integrated technology manufacturers to maintain competitiveness.

This article is from the WeChat Official Account "Auto Community" (ID: iAUTO2010), written by Yang Jing, published with authorization from 36Kr.