Prof. Michiaki Tanaka of the Graduate School of Business at Rikkyo University discussed the future course of the automobile manufacturing industry during an interview with The Yomiuri Shimbun. The following are excerpts of what he said.
--Aiming for CASE
The Yomiuri Shimbun: What will become of the automobile industry following the new coronavirus outbreak?
Tanaka: Based on the lessons from economic impacts caused by global depressions and the collapse of Lehman Brothers, I believe changes that have already been made will be accelerated.
The automotive industry has also suffered greatly from the coronavirus pandemic. But in fact, the so-called 3Cs [closed spaces, crowded places and close-contact settings] can be avoided most easily when you ride in private cars. Car sales are currently down 20% to 30%, but the effect on the auto industry has been the lightest among transportation-related industries.
Further efforts will be made, on the other hand, to promote CASE, an acronym consisting of connected, autonomous, shared and electric.
"Connected" means that cars will be able to be equipped with communication functions to be connected with homes [smart homes], city functions [smart cities] and use such services as online payments. Digitization and online systematization, which sustain connecting functions, have made remarkable progress.
This year was predicted to be the first to see self-driving put into practical use for small buses in major countries. Practical uses of autonomous driving technologies are planned in various places of China. If the Tokyo Olympics and Paralympics had been held as scheduled, autonomous cars would have been scheduled to run in specific areas of Tokyo, too.
A manpower shortage is conspicuous in the distribution industry. This accelerates the practical use of self-driving technology in small commercial vehicles. It may take time for such vehicles to run with persons aboard, but something like small robots capable of carrying things will make progress.
The concept of sharing has been brought to somewhat of a standstill amid the tendency to avoid contact with other people, but this will expand from a long-term perspective.
Electrification is represented by electric vehicles and involves the global environment issue. The coronavirus pandemic has given some momentum to considerations for the environment.
A good case in point is EV maker Tesla, Inc. of the United States. Tesla has ascertained the prospects of making the EV business profitable and achieving mass-production ahead of other carmakers. If the technology advances, its EVs will be able to be self-driving. The EV maker is trying to establish an ecosystem for clean energy. Tesla has a high potential to become something like a platform for autonomous driving and overall clean energy development.
--Japanese makers lag behind
Q: Then how are Japanese carmakers doing?
A: Toyota Motor Corp. President Akio Toyoda unveiled the EV prototype e-Palette at the Consumer Electronics Show in the United States two years ago. This likely reflected Toyota's strong sense of crisis that it lagged behind other major carmakers, including General Motors Corp. Toyota has acted quickly since then. In the latest move, Toyota announced a huge MaaS (Mobility as a Service) project in Yokohama connecting information technology with transportation means and other mobility services.
To our chagrin, however, many companies in Japan have been undertaking development of MaaS apps separately. So, it is hard to make them join hands and scale up the development. I think a certain degree of state involvement is required.
Nissan Motor Corp.'s management strayed off course and its raison d'etre was called into question before discussing its efforts to tackle CASE. Honda Motor Co., just as expected, is also struggling to find its raison d'etre as an automotive firm.
If these Japanese carmakers can rally behind Toyota, it will become possible for Toyota ― which lagged behind other competitors ― to play a leading role in the global auto industry. In fact, only Toyota has a possibility to find a way out. Tesla's market capitalization surpassed that of Toyota on July 1 and even exceeded the combined total of nine Japanese automobile producers 12 days later, reflecting eloquently the market evaluation of Japanese carmakers.
Sense of values change amid pandemic
Q: How will motorized society change?
A: For example, if big businesses declare that they will switch their company cars to EVs by taking into consideration the issue of global environment, others will follow suit. Such a change could happen at any time.
It is said to take several years before EVs will be on par with the current gasoline-powered cars in terms of economic rationality and technology. But entering an era of "living with coronavirus," sustainability has begun to be recognized. With abnormal weather having hit various countries one after another, people the world over will ask whether it is all right to leave the situation as it is.
In that case, the people who consider "EVs are favorable for the global environment" will outnumber those in favor of economic rationality. The automotive industry, for its part, should not aim for growth as they did in the past, and instead seek to create corporate entities and organizations that can contribute to make the entire society sustainable.
The momentum for introducing ride-share systems will grow as many people consider that now is not the time for every individual to purchase their own cars. Private cars are very convenient, but many people will change their values in that direction.
It can be said that the coronavirus pandemic has brought about the chance for new sense of values to emerge among us.
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