Japanese carmakers expand scope of local operations In Asia

Recognizing the growing importance of Asian markets outside of China, Japanese automakers are widening the scope of their business involvement in India, Thailand and Indonesia. There are currently three Japanese automakers moving in this direction.

• The Renault-Nissan alliance, which has jointly set up the Renault-Nissan Technology & Business Center for research and development in Chennai, India, where 1,700 engineers are working on cutting-edge research projects, software development, including computer simulation-based studies to improve fuel efficiency of state-of-the-art engines.
• Daihatsu Motor Co., which has announced its intention to shift more of its operations to key overseas markets, so as to transfer power and responsibilities to overseas Daihatsu units for more effective use of local materials and human resources. The company embodies this strategy in its soon-to-be-launched Ayla, a new Daihatsu minivehicle that can travel on 30km on a liter of gasoline, which is strategically made for Indonesia, Daihatsu President Koichi Ina said. Daihatsu’s goal is a local content ratio of 90%, and the company has decided to build a test course and design center in the country.
• Honda’s Asian push is reflected in its ambitious target of selling three million units in Asia by 2016, double its estimate for 2012. Out of the 3 million, it plans to sell 1.2 million in Asian countries outside China. To accommodate the diverse needs of these countries, Honda will strategically develop different models for India, Thailand and Indonesia using a synchronized development strategy.

Japanese carmakers have agreed that realization of their plans to expand their market share in key Asian markets is largely dependent on their ability to use local resources effectively. (December 6, 2012)