TOKYO, Feb. 2, 2019 – At 45 percent selling 1.56 million cars in calendar 2018, Toyota Motor Corp. commands an uncontested domestic Japanese automobile market share, outdistancing by wide margins Nissan Motor Co. and Honda Motor Co. in that order (excludes mini vehicles with engine size smaller than 0.66 liter as it gets too complicated). The Toyota share, even though it shrank 1.7 percentage point from 2017, is an impressive number that should make its Japanese and foreign rival manufacturers envious but give them breathing space.
But 45 percent is not 50 percent that had eluded Toyota by the early 2010s and sustain for sound sleep during 2020 nights. It may well be the reason why Toyota officials, led by CEO Akio Toyoda, these days do not sound confident about what they are doing. Akio often says – and he reiterated at a 2019 New Year speech – that the auto industry is confronted by ‘once in a century’ sea change.
Toyota clearly recognizes the significance of achieving and retaining a 50 percent market share and once surrendering it, it would be next to impossible to regain it. Japanese electric and electronics manufacturers garnered far higher than 50 percent shares for their audio products in the 1980s, such as Sony’s Walkman, in most global markets but they now are minor domestic suppliers for smart phone headsets and other audio goods giving up the once glamorous posts to Taiwanese, Korean and Chinese. Like those Japanese makers, Apple’s iPhones’ global market share has never reached 50 percent and it is poised to slip further over coming years amid growing competition. In the 1990s, Toyota’s Indonesian market share exceeded 50 percent but now, it is less than 40 percent, even though Toyota’s share there is the largest.
The Japanese domestic automobile market has been undergoing an evolution in favor of imports over the past few decades: Imported cars account for about 1/10th of total domestic sales, at 366,000 of 3.347 million total domestic car sales (again, excludes mini cars) in 2018. Ten years earlier, in 2008, imports totaled 219,000 out of total yearly sales of 3.15 million, or not even 7 percent. The 2018 year-on-year import sales were up 4.3 percent while 2018 domestic overall sales including imports were down 1.3 percent from 2017, so this graphically illustrates imports penetration into the Japanese market and the reason why Toyota and Japanese automakers cannot be complacent.
Toyota surely is seeing more competition globally – American. European, South Korea, and probably Chinese in a couple of years would release low-end gas-powered and electric vehicles. That’s why it is developing MONET on-demand and ride-share joint projects with Japan’s Softbank Corp., Panasonic Corp. for batteries, and many more.
‘Toyota is feeling nervous’ about what comes next’ in terms of consumer demand for motor vehicles and next-gen technology, a former Toyota official told me recently. It’s the reason why Toyota is dabbling into areas previously unbeknown to it by shooting future targets blindfolded.
It’s risky if Toyota relegates its core vehicle features (known as rather boring) of safety and quality (durability, environmental friendliness, ease of maintenance and repair to the dashboard glitz, automated driving and racing performances. After all, the bottomline of a car is to drive you from point A to B safely and securely.
–Toshio Aritake