[SmartCat]

Originally Posted by slamnos

Japanese business model is often misunderstood. This formula hasn't changed for them in decades and they still rule the business across many functions with the same formula.

Originally Posted by govindremesh

Sure, there's some catch up for the Japs to do, but they've not lost the plot - either in Automobiles or electronics. So I wouldn't call the Japanese auto/consumer electronics era dead.

One can get some idea abut Japan's prowess in R&D when we look at their patent applications per year (2022 global ranking):

Originally Posted by shortbread

Here in the UK, there's a lot of chat about EVs among our friends circle whenever the car topic comes up and by default people talk Teslas. It's almost like the 'Bisleri' syndrome. The women say the Tesla looks impressive without an iota of information about it's technical specifications (again I am talking from personal experience here and not trying to sound sexist). My better half also says Tesla, and me mentioning things like the ioniq5 usually gets a 'mmeh' in response.

Interesting anecdote! I guess it is similar to iPhone marketshare in certain countries like US/Japan etc. All Android devices put together have less than 50% share in some countries.

[DriverLess]

World changed after Japan had their era of success with consumer electronics. Software started to play a vital role with the introduction of smartphones, 4G+, connected tech and app based streaming, subscription services. Japanese companies failed to successfully transition to this economy. But not because of lack of trying.

Many leaders/CEOs of Japanese companies have expressed that hardware engineers (electrical/electronics/mechanical..) are valued in the company culture and are at the top positions due to long service tenure.. Younger software engineers do not have the same level of credibility within the society or their organization (this could be changing, I don’t claim to understand cultural shifts). Their software market is mostly focused on serving the local market, whereas USA/Koreans were able to build products for export (mobiles, smart-everything, internet enabled services etc).

But with the world transitioning again to an AI / integrated future in the next decade, Japanese might find the environment suitable for their strengths. They were the pioneers in AI/humanoids etc and they can benefit from this transition.

This is a cautionary tale for the Indian software industry. We have very little expertise on the hardware side. I see some investments around semiconductor manufacturing, but we need innovation beyond doing OEM manufacturing. Next generation of STEM students should not just focus on software, which I believe will get highly commoditized because of AI.

[ChristComesSoon]

I think Akio Toyoda was right in not jumping head first into the EV craze.
The fact is that EVs, so far, are only good as a 2nd car for running errands within 20 km radius ; Not as a primary car due to the various practicality concerns.

For any serious load/work - EVs are just not practical. (Anyone see the recent review of JerryRigEverything & the road trip with the cybertruck? Range anxiety, charging time, charger availability - are real concerns.)

Akio Toyoda stepped down a year ago, since he said he believed in an "old-fashioned," reserved, cautious approach to going all out into EV production.

I think in these few years since the EV craze - he has been proved right.

If we leave it open to free-market capitalism rather than subsidizing cost of EVs - the truth of ownership/maintenance of EVs will quickly come out.

A huge element of the EV push is the climate-change narrative. Anyone notice? It was earlier called "Global warming" ; now, "Climate change" - to account for any eventuality....


Here are the quotes from the article ; link below:

• In December, Toyoda said he was standing up for a “silent majority" in the auto industry that questions whether it is right to make EVs the sole option for car buyers.
• Akio Toyoda has advocated what he calls a more practical approach that entails offering many types of environmentally friendly vehicles.
• Under Toyoda’s leadership, Toyota is “sending a signal of resistance to the climate transition," Lander said.

Source: https://www.livemint.com/companies/p...593929315.html

[invidious]

This is all cyclical. In the 1950s it was the Japanese which were looked down upon till they proved their mettle. Americans could compete in automotive space because they adapted while the British died out. French clung on because of Govt support. British engineering wasn’t the problem - their products and solutions were. Till the iPod came along, the Walkman and the Discman ruled the roost. This really wasn’t that long ago. Samsung literally aspired to be the 2nd most recognised consumer brand after Sony. Perceptions change as the spending power of generations change

[ellip5i5]

I think it’s deeper introspection as a country, society that is needed for Japan. Automotive and Consumer Electronics sales are a reflection of the innovation drive and ecosystem and today they are behind the curve.

Can they catch up? Sure , they’ve been resilient in the past and have shown historically to make those shifts. So i remain optimistic and look forward as in this world, the more the merrier

[OffRoadFun]

Originally Posted by SmartCat

There is no "catching up" for Japanese companies to do. They are no longer competiting with Chinese/Koreans - instead they are supply high-tech components to them. Eg: Sony camera sensors

The real profits are NEVER in supplying components, the real profits are in selling the product, up in the value chain.

That's the reason Apple makes HUGE profits, not the component suppliers. That's a low margin business (relatively) and mired in competition. Bosch and many others supply components to German car makers, they never make big profits. Many car buyers may not have even heard about them.

The fact you mentioned they have become high tech component supplier itself is a reflection of the fact that they have been relegated to lower position in value chain and end of the dominance, a loss, however one wants to put it.


Who wants to buy a Sony Camcorder or a Sony Phone or a CD man today? Or for that matter, no one vies for ANY meaningful consumer electronics product today (TVs may be) from SONY or even other Japanese brands. There was a time when these were hot items for consumers and Sony was at the top for these products.

[SmartCat]

Originally Posted by OffRoadFun

The real profits are NEVER in supplying components, the real profits are in selling the product, up in the value chain. That's the reason Apple makes HUGE profits, not the component suppliers. That's a low margin business (relatively) and mired in competition.

Do look up net profit margins of Xiaomi (Redmi/Poco) or BBK Electronics (Oppo/Vivo/OnePlus/Realme) - it is just 4% to 6%. The rest of the Android smartphone makers are probably making losses (as a standalone entity) or swinging between profits and losses every other year.

We should not look at Apple/Tesla, make assumptions and then extrapolate for the entire industry. Because they are outliers. Meanwhile, Samsung/Huawei are conglomerates with multiple businesses, including supply of smartphone components.

On the flip side, many of the component makers & contract manufacturers are monopoly/duopoly in this business. And it is quite likely that they make consistent stable profits year on year. Examples: TSMC, Corning, Foxconn/winstron, sony camera sensors, Qualcomm/Mediatek etc.

[VwRabbit]

The battle between countries in terms of tech and cars is not relevant nowadays with technology sharing being the norm it’s really not the fight between nations anymore and hence one can’t isolate Japan, i have two OLED’s at home one from Sony and one from LG,Sony uses the same OLED panel from LG but if one asks me between the two which is more fuss free and robust that’s Sony all the way and yes it is more expensive than the other and it uses a Google OS but still.
Similar case with cars Toyota revived the legendary Supra using the underpinnings from a BMW Z4 but if given an option i will take the Supra over the Beemer any day because my perception will always be that Toyota can handle way more abuse than a German ever can and most people will have similar mindset, that’s their motto keep everything simple but robust and sometimes that might mean it has to be a bit old school but in today’s scenario if one company needs help and they are willing to pay or share tech they can surely get the help they need regardless of whichever country their origins are from.
Similar case with EV’s, Japan might be lagging in that front but Toyota is the only company that could make a successful hybrid combo in their cars without pricing it exorbitantly and it works, pure EV is definitely not the future hybrids are because EV’s will never be as durable in the long run and will only create more environmental problems because of mining for the lithium-ion and old battery recycling difficulites.

[gururajrv]

I agree tech field is now leveled up with Japanese when you pit it against India, China. However, there's one crucial trait what India and China lack, is the lack of Discipline and Finesse in terms of providing durable & reliable products as against Japs. They're still way ahead in terms of maintaining quality. This is where we need to pick ourselves up. Else, world will start to miss the finesse levels. This is purely from an automobile standpoint.

[GutsyGibbon]

Originally Posted by VwRabbit

.
Similar case with EV’s, Japan might be lagging in that front but Toyota is the only company that could make a successful hybrid combo in their cars without pricing it exorbitantly and it works, pure EV is definitely not the future hybrids are because EV’s will never be as durable in the long run.

Toyota sold its Fremont factory to Tesla for $42M in 2010. They bought pre ipo stock of Tesla, had the RAV4 EV with Tesla batteries. They walked away from all of this.

Toyotas investors ask tough questions when they look at EV investments again. To make EVs at the price point of Tesla and BYD, they need giga factories or huge deals. But, they just don't see a EV future.

So far, it's all been double talk and distraction. The Subaru cars with tiny battery packs that cost more than a Tesla are not selling. It's game over for Toyota in the West. Byd, cherry, Nio, xpeng, are ready to ship superior products today.

[Raskolnikov.R]

Originally Posted by SmartCat

One can get some idea abut Japan's prowess in R&D when we look at their patent applications per year (2022 global ranking):

I went through the entire write-up to check for this particular metric. For an economist, this maybe the most relevant of them all. Not profitability or market cap. Godforbid, definitely not turnover.

The ratio of R&D expenditure to GDP is a time-honored principle of understanding a country's progress.

I attach a few for your perusal:

Japan:

Results of the Survey of Research and Development 2022
R&D Expenditure
Japan's total expenditure on R&D during fiscal year (FY) 2021 stood at 19.74 trillion yen, a 2.6 percent increase from the previous fiscal year. This is the first increase in two years.

Expenditure on R&D as a percentage of GDP was 3.59 percent, a 0.01 percentage point increase from the previous fiscal year.

https://www.stat.go.jp/english/data/...0fiscal%20year.

US:

The ratio of U.S. research and development (R&D) to gross domestic product (GDP), at 3.40% in 2021

I believe the above is federally funded share. In this regard, I'll leave this open to interpretation.

https://ncses.nsf.gov/pubs/nsf23339#...mestic%20R%26D.

EU:

In 2022, EU research and development expenditure relative to GDP stood at 2.23 %, lower than in the previous year when it recorded 2.27 %.
In 2022, the EU spent €354 billion on research and development; R&D expenditure as a percentage of GDP stood at 2.23 % in 2022, compared with 2.08 % in 2012.

https://ec.europa.eu/eurostat/statis...e&oldid=551418

China:

Research and development expenditure (% of GDP) - 2021 2.43

India:

Research and development expenditure (% of GDP) - 2020 0.65

https://data.worldbank.org/indicator...ocations=CN-IN

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While it is true that Japan lost its domination in certain scientific domains, that's also because of the democratization of technology and the migration of production facilities to low-cost countries.

Japan, for the longest period, set the technological benchmarks for many of the technologies we take for granted today. However, that's not the case today.

That's because of what the Japanese refer to as the 'Lost Decades.'

Deflation devastated Japan.

The Asian Currency Crisis had a lasting effect on the Japanese electronics domain, where the marketcap of many Y2K technology companies were completely eroded. It left behind an era where investments refused to flow into the same domains for a really long time.

In my humble opinion, one of the greatest disappointments I've noticed is Japan's strong and ardent belief in being homogenous. The Japanese don't want to collaborate.

Look at the patent winner names in the US and EU - mostly migrants. China - people who emigrate back to the home country after long stints in the West.

Japan is struggling to get more people involved in R&D, an area of core competence for the proud nation.

Forget Toyota taking over the rest of the world and winning, show me a single Western automobile organization - two or four wheeled - who have been able to sell more than an handful of vehicles in a year.

The Japanese will export technology, but are resistant to import the latest, and to improve on it.

But it would be too early to write them off.

They are working in some highly critical areas where the payoffs will be massive if the technology is widely adopted.

Case in point:

1) Solid State Batteries - while the technology has been around for long, I hope and trust it will be a Japanese company which will be able to commercialize the technology at scale.

This article is a good reference point - https://www.reuters.com/business/aut...la-2022-10-24/ - though its not related to batteries directly.

2) Nuclear Fusion - As a resource starved nation, Japan is at the forefront of nuclear fusion. The tragedy is that, rarely do we hear about their scientific advancements.

https://www.theguardian.com/world/20...nched-in-japan

Japanese superiority is not merely in coming up with the cassette or the CD, but in their ability to commercialize the technology. And more importantly, to manufacture it.

Its true that China has stolen a march in the domain, and the US and EU are pouring a lot of resources in the next-gen technologies. However, I expect Japan to have a remarkable say in how the rest of 2030s-40s-50s evolve technologically.

Thank you!

[am1m]

Originally Posted by Raskolnikov.R

As a resource starved nation, Japan is at the forefront of nuclear fusion. The tragedy is that, rarely do we hear about their scientific advancements.

Not specific to Japan or Nuclear Fusion, but in general, reporting about core scientific advances has gone south, in favour of consumer electronics reporting. That's because it's easier to package and digest, demands less engagement and mental effort from readers/viewers, requires far less effort from reporters (just take whatever the consumer electronics company PR person gives you!), gets more eyeballs, and is easier to slip in marketing/advertorials.

As a result, it would be easier for the general public to think a certain region is ahead just because they produce faster laptops or sleeker mobile phones or cars. But those are mature technologies and probably now standardized assembly-line outputs.

I'd think a nation would be truly 'ahead' if they are doing some research into something ground-breaking and that will change something fundamentally in the future.

Again, I don't know if Japan is- this is just about the relative reduction in 'core' scientific reporting. Take the way even PC magazines used to be in the 90s, focusing on code and fundamental breakthroughs/computing concepts. To the same magazines now, mainly reviews and comparos of gaming consoles.

So unless one is making an attempt to seek out information from journals and conferences, I think it will be pretty hard to judge where exactly a nation stands in terms of scientific advances just based on mainstream media reporting.

[avishar]

Toyota is not dead. Despite the doom-gloom predictions from a few years back.

Their record revenue and profit figures in this year, say otherwise.

How many manufacturers in India would like to have a hybrid in their portfolio today? Suddenly seems to be the hottest thing. To the point where Tata is already lobbying with the government to not reduce GST on hybrids.

I would say it is wrong to write-off the Japanese. If we look at it from an automotive point-of-view, Toyota might actually have the last laugh. The days of lavish growth in EVs is drying up. Look at the sales figures across the world, growth rates in "EV Mature" markets are slowing down. And what is actually ramping up, is the sales of plug-in hybrids.

The RAV4 Hybrid has a months long waiting period in the USA, while EV inventories has piled upto a record high (Source)

And I say this as a pretty big fan of EVs. But the truth is, the dynamics of the market has changed. And in this new world, none of the Japanese carmarkers are actually doing badly. Even if we look at the smaller independent manufacturers like a Mazda or a Subaru (the most at risk from a transition), they are actually reporting their highest sales figures this year, even with negligible EVs in their portfolio. Mazda's bet of developing highly fuel-efficient engines is paying off.

Meanwhile GM has delayed plans of mass production of their Silverado EVs, Ford has stalled work on their electric megaplants and the Germans including Volkswagen is sweating bullets look at the declining growth of EVs in Europe.

The problem with banking on EVs was that the initial growth phase driven by enthusiastic adopters, while today the market needs more general buyers to convert to EVs. And they are finding it hard to find buyers. This is because EVs are still too expensive compared to ICE/Hybrid vehicles and with the days of zero-interest money getting over (along with subsidies), these vehicles suddenly look very expensive. Another factor is EV sales were also driven by the leasing market, which is facing its own problems as corporate leasing has slowed down and leasing rates have increased.

But can we say Toyota was the ultimate sooth-sayer and they predicted all this to happen? I don't think so, and they were genuinely caught out by the growth. But they stuck to their strategy of waiting till they can make these EVs work at prices that they are used to selling. I think they are waiting till solid-state batteries are more common and then they will get serious about EVs.

Japan as a whole is a country which is still extremely important when it comes to playing a part in future technologies. They are constantly innovating and they still at the bleeding edge. An example is that they have also realised their dependence on Korea and Taiwan for high-end chip fabrication and right now they have 2-3 fabs under construction in the country. There is a company called Rapidus which is a consortium consisting of heavyweights like Toyota, Denso, Sony & Softbank and they are building a 2nm-node fab in Japan.

I was listening to this podcast on breakthrough Japanese products and they are capable of being total disruptors, and then they themselves shy away from it.

Examples being the Shinkasen, the original 100 series train in early 60s, the Walkman, the Lexus LS400, Honda's F1 triumph in the 80s, VHS, PLaystation, Asimo and more recently the Mitsubishi regional jet. Japanese conglomerates somehow see breakthrough triumphs as a one-off and do not wish to build on it aggressively for marketshare.

Take for instance the Lexus LFA. Incredible car. But they never did anything of it. They never expanded the model range, never followed up on it, never took technology from it, they just created a technological showpiece and left it as it is. Its like Ferrari building the F40 and then forgetting all about it.

The one company that might give the Japanese a problem is BYD. This is because this is the first time someone is beating them in their own game and at their strongholds, like Southeast Asia and the mass-commuter segments in China. And I think companies like BYD, Apple, Nvidia are making the Japanese currently rethink their posiiton in the world and making them move faster.

As far as Toyota goes, I think they have nothing to worry about.

[Raskolnikov.R]

Originally Posted by am1m

Not specific to Japan or Nuclear Fusion, but in general, reporting about core scientific advances has gone south, in favour of consumer electronics reporting. That's because it's easier to package and digest, demands less engagement and mental effort from readers/viewers, requires far less effort from reporters (just take whatever the consumer electronics company PR person gives you!), gets more eyeballs, and is easier to slip in marketing/advertorials.

Spot on!

Two decades ago, who would have thought that the largest organizations on Earth would be social media companies, and the ancillary ecosystem!

And, to me, that's where Japan, and Germany, failed to capitalize on the slow and steady migration away from traditional industries.

A simple question, a Japanese investment company, Softbank Co., invested in Alibaba, China, for a rather paltry $10 million. However, they don't have a single success story of the same weightage from Japan.

The Japanese corporate world is going through a period of reflection. Recently, they've began the process of untangling the crossholding mess they deliberately created, ostensibly to thwart outside influence by way of activist investors. But a lot more need to be done.

Japan is possibly the only country to continue with its sub-zero interest rate regime. Money is available in abundance. Corporate debt levels are manageable, but people still won't borrow to expand. Because, the output doesn't have a market.

The recent success behind Japanese firms export numbers and profitability isn't efficiency, but the weakening of the Japanese Yen. Today, it's trading in the range of 147.

For much of the beginning of last decade, it was around Yen 107, if memory serves me right.

At a level beneath Yen 110, most companies won't find it profitable.

Japan has capital, but rarely the platforms to deploy it.

The island nation lacks one critical element - vision.

Politically, it's taking a beating from having to align itself with the US whether it wants to or otherwise. The threat of China seems to broaden by the day.

And internally, there's not a single Japanese politician who can be termed a visionary. Almost all are technocrats who's ability to imagine is almost nonexistent.

My words may sound harsh. However, the assessment can't be anything but damniing.

Today, Japan needs to kickstart an industrial revolution that's not limited to the manufacturing industry.

For long the Japanese carmakers have claimed Hydrogen to be the magic fuel. And yet, even inside Japan, the sales of such vehicles is miniscule.

They need to stop betting against BEVs and to do one better by commercializing SSB.

Its true that they came up with the Bullet Train, Walkman, and many other advancements.

But, the fastest trains today are run in China and Spain.

Japan, sadly, has grown old, with little demographic dividend to interest international firms to bet and invest in.

For your sake and mine, I truly hope Japanese car manufacturers stop seeing themselves as manufacturers exclusively, and begin thinking of their cars as an ecosystem that interacts with people in more ways than transportation. The kind of stuff the Chinese EVs are capable of is mindboggling.

In a way, Chinese EV market is the erstwhile Japanese consumer electronics industry. Innovate. Improvise. Improve. Constantly.

Japan needs to reinvent the wheel if it wants to remain relevant.

The old country has to overcome many challenges. Car manufacturing is the least of its issues. It needs a wholesale change to its culture and work philosophy.

It needs to open up.

The time to be the greatest export economy (besides, Germany) has passed.

The writing is on the wall.

Invent. Invent. Invent.

But hold on to the inventions. And grow rich from the royalty payments. And invest in R&D.

A reminder - LED and Bluetooth when invented by the Japanese in the 80s and 90s had almost no immediate application. Today, we cannot imagine a world without these technologies.

Japan can remain the hotbed of R&D by channelizing resources more effectively. With vision!

Thank you!

[UNSC117]

People hate the Prius all over the world. Still, even with the new Prius, I feel it's simply a great looking car with slow engine and a slow hybrid motor. Toyota should seriously focus on EVs and their rise. The lord knows that the Japanese are really not having a great time in the Indian market (except MSIL of course) Nissan is seemingly dead now with their Magnite, Honda only has a few models, Toyota keeps screaming at the face of the govt. about taxes. However sad it may be, feels like the rise of Japanese companies is coming.