CNA Explains: Honda-Nissan merger talks – why Japan’s automakers are scrambling to catch Chinese rivals

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Why has Japan been slow to embrace electric vehicles?

There are a few aspects. One is the country’s passion for petrol-electric variants. Asian automakers have placed a lot of weight on hybrid cars, and profits there are projected to continue to rise until 2027.

Toyota, a market leader and a force of nature, has been slow to adopt Batteries, and everyone else has followed suit.

Second, Japan has fewer incentives to go fully energy than other nations, despite their green policies that strongly subsidize EVs.

According to a new study by Greenpeace, Toyota, Honda, and Nissan are among the least environmentally conscious automakers in the world.

Japan’s GDP is on the verge of a collapse if it doesn’t switch to producing EVs, as auto manufacturing accounts for nearly a fifth of its exports, according to a statement from the Climate Group non-profit. If the automobile sector is in decline, this could also lead to significant job losses.

Asian automakers are now attempting to reclaim their position in the world of electric vehicles by investing more in solid-state batteries that demand more quickly and last longer than those made by China.

In March, Nissan and Honda had previously agreed to study the viability of a proper agreement in making EV vehicles and systems, to cut costs and improve profitability.

Nissan and Honda then announced in August that they would work together to develop self-driving software and introduce an electric vehicle ( EV ) by 2030.

The company’s strategy includes Mitsubishi Motors, of which Nissan is the largest investor and holds a 27 % interest.

The three companies may have a combined monthly production of about 8 million cars.

Though Japan’s automakers have to get up in areas like power prices and vehicles design,” they are not much behind”, said Mr Vivek Vaidya, associate companion at the Frost &amp, Sullivan firm.

” China did not produce the first commercially successful EV. It was manufactured by Nissan- the Nissan Leaf”, he pointed out to CNA’s East Asia Now.

If the consolidation is successful, Nissan will have the financial resources of a bigger mate and be able to “bring in better designs at a cheaper and better rate,” he added. Honda may also have access to a company with an EV and a device. ” This is a win-win situation for both”.

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ASEAN aims to boost intra-regional trade through better transport connectivity

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TAPPING EACH OTHER’S Capabilities

Thailand has stated that it is enthusiastic about enhancing communication between nations.

For starters, it is expanding to a twin track rail system. &nbsp,

Additionally, it is pushing for the construction of a land bridge that connects the Thai Gulf and the Andaman Sea in southwestern Thailand.

The premier job, scheduled to be prepared by 2028, aims to create a new global trade route and reduce travel occasion for vessels, said Thai Deputy Prime Minister and Transport Minister Suriya Juangroongruangkit. &nbsp,

There is now” a lot of overcrowding” in the Malacca Straits, he noted. &nbsp,” We foresee that in the future, a lot of transport lines will have to rush and lane. But if there is a property bridge, it is ( be used as an alternative )”.

But system alone is not enough, market players noted.

” The key question now is, can they get it ( to be ) seamless, can they get it ( to be ) affordable”? said Westports ‘ executive president Ruben Emir Gnanalingam, &nbsp, who runs the largest mentioned port operator in Malaysia.

” Because then you didn’t promote it, you can’t showcase it as an opportunity, because it’s going to cost you more”.

Southeast Asian nations must work up, according to experts, in order to benefit from financial connectivity.

” When you look at ASEAN member states, yes, they are unified. Yes, ( there is ) ASEAN importance. But they’re generally competing with each other”, said Mr Chris Humphrey, executive chairman of the Singapore-based EU-ASEAN Business Council. &nbsp,

” They’re competing with each other for FDI ( foreign direct investment ) flows. They’re competing with each other for business. We need to make sure that rather than competing, we do perform to each other’s advantages”.

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Malaysia deepens economic ties with a Russia shunned over Ukraine invasion

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However, industry players said some companies may not want to get into business with Russia out of fear they would face trade obstacles given the ongoing sanctions.

For instance, the United States’ latest sanctions sought to further curtail Russia’s use of the international financial system.

Standardising currency used in business with Russia may therefore emerge as a challenge, noted chairman of the Small and Medium Enterprises Association of Malaysia William Ng.

Also, while Russia may have developed its own state-of-the-art software and information technology applications, they would be a hard-sell in Southeast Asia, he added. 

“We have been reliant on the American (and) European vendors for many years. To now shift the reliance to Russia as an option will take a bit of learning,” he said. 

“At the end of the day, we know what is the elephant in the room: That is the issue of Ukraine. Until and unless Russia solves it – and only Russia can solve this issue – everybody else will be at risk (of sanctions),” he added.

RELATIONS BETWEEN ASEAN AND RUSSIA

Still, Malaysia, which will take on the leadership of ASEAN next year, is eager to engage with Russia and BRICS member countries to diversify from its traditional markets, while maintaining ASEAN centrality amid intense superpower rivalries.

Already, ASEAN has benefitted from its trade ties with Russia.

In 2023, Russia’s trade turnover with ASEAN grew by 15 per cent from the previous year. 

The BRICS grouping, which was formed to act as a counterweight to the West and originally comprised Brazil, Russia, India, China and South Africa, added 13 partner countries in October, including ASEAN nations Malaysia, Vietnam, Indonesia and Thailand. 

ASEAN, with a combined GDP of almost US$4 trillion, is the fifth-largest economy in the world. 

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How Chinese car makers are helping Indonesia’s EV dreams

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CHINESE EV MAKERS IN INDONESIA

Chinese car makers are the most popular in Indonesia’s EV market, surpassing other Asian competitors.

According to September sales figures by Gaikindo, the best-selling electric cars were from Chinese brands BYD, Wuling and Chery.

Recently, Beijing pledged to ramp up its investment in Indonesia’s EV industry, after a bilateral meeting between both countries’ top diplomats in a bid to help Jakarta chase its EV dream.

Indonesian authorities have set a production target of 600,000 EV units by 2030.

Already boosting the industry is Chinese carmaker Wuling, which inaugurated its factory in West Java in 2017 and currently produces 120 electric vehicles per day. These vehicles are sold to the Indonesian market and exported as well. 

Wuling is planning to expand its EV services. 

“For the future, we want to expand again where we want to build an electric car battery facility here. And we have scheduled for the production of electric car batteries to begin at the end of 2024,” said public relations manager at Wuling Motors Indonesia Brian Gomgom.

BYD, the world’s largest EV manufacturer, is also investing US$1.3 billion to build an EV plant in Indonesia. Factory operations are expected to begin in January 2026. Its investment in the country is expected to contribute to the industry, economy and jobs.

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Ratan Tata’s half-brother Noel takes the reins at powerful charity arm of India’s Tata group

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NEW DELHI: The half-brother of Ratan Tata was appointed on Friday ( Oct 11 ) as the head of the powerful and influential philanthropic arm of India’s Tata group, giving him indirect control of the US$ 165 billion conglomerate.

Tata Trusts said Noel Tata, 67, will be its new president after the suicide this year of Ratan Tata, &nbsp, one of India’s best-known corporate titans. The choice followed “many old-timers” in the class wanting him to direct the walk, said one Tata professional.

The family business, Tata Sons, oversees 30 organizations across consumer goods, resorts, cars and airlines and has become a worldwide giant over the years, with companies such as Jaguar Land Rover and Tetley Tea in its stable.

It has partnerships with Starbucks and Airbus in India, including Tata Consultancy Services, Taj Hotels, and Air India.

Tata Trusts has a 66 per cent equity of Tata Sons, giving it strength over great expense, philanthropic and corporate decisions by the company, organization executives said.

Noel Tata, who is half-French, was now one of the numerous governors of Tata Steel’s charitable arm and president of Trent, a well-known retail fashion brand for Tata.

Noel is well-versed in the operation of Tata organizations. In retail, some individuals thought how may Tata compete with the major retailers. Noel has shown it, according to Sanjay Singh, a former professional at Tata Sons who will retire in 2019.

He is classic Tata, despite keeping a low page to prevent the outside world from getting to know him.

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Sri Lanka approves controversial foreign debt deal

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The government and its diplomatic lenders reached a deal to restructure their official credit, which was worth US$ 6 billion, in June. Private collectors who own more than half of the world’s royal ties and other foreign commercial mortgages to the South Asian nation agreed to a 27 % loanContinue Reading

IMF sees gradual return to economic normalcy in Bangladesh

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WASHINGTON: The International Monetary Fund on Monday ( Sep 30 ) said Bangladesh’s quick formation of an interim government has helped stabilise the country, and that the country’s new authorities have helped address the economy even as challenges remain. The IMF owner’s assessment, following a Sep 24-30 team visit, evenContinue Reading