Core Insights - The competitiveness of Japanese automakers is gradually weakening, primarily due to the rise of Chinese electric vehicles, particularly BYD, which has surpassed Honda and Nissan in global sales and is now targeting Toyota [1][4] - Japanese automakers are lagging in the development speed of new models and high-tech electric vehicles, leading to a loss of market share in China and Southeast Asia [1][4] - The market share of Japanese automakers in Southeast Asia has decreased from 73% in 2021 to 64% in 2024, with further decline to 62% in the first half of this year [4][5] Industry Trends - The global automotive market saw total sales of 95 million units last year, with hybrid models accounting for 6.6 million units, indicating a significant market share opportunity for Japanese automakers in this segment [3] - The transition from internal combustion engines to electric vehicles poses a severe challenge to Japan's automotive industry, which is a key pillar of the economy [1][4] - Analysts suggest that the entry of Chinese electric vehicle manufacturers signals the end of Japan's dominance in Southeast Asia, a market that was previously considered secure for Japanese companies [5] Competitive Landscape - Japanese automakers face fundamental issues in new vehicle development cycles, estimated at 6 to 7 years, compared to just 18 months for some Chinese companies [4] - Despite challenges, Japanese automakers have stable markets in the U.S., India, and their domestic market, with strong demand for hybrid models [6][7] - Toyota remains the most profitable company in the automotive industry, with a net profit of 4.8 trillion yen (approximately 230 billion RMB) last fiscal year, although its market valuation is less than a quarter of Tesla's [7] Future Outlook - The potential for industry consolidation is seen as a hopeful avenue for Japanese automakers, as the number of manufacturers is considered excessive, limiting scale advantages [7] - The ability of electric vehicles to maintain attractiveness in the market, especially as subsidies decrease, will be a critical factor in future sales growth [5]