Japan & ASEAN forge joint auto strategy to counter China’s EV dominance

Japan and the Association of Southeast Asian Nations (ASEAN) are set to unveil their first collaborative strategy on automobile production and sales within the Southeast Asian region. This move aims to counter China's growing dominance in the electric vehicle (EV) market, as reported by Nikkei on Monday.

This concerted effort by Japan and ASEAN aims to develop a robust automotive strategy to establish a stronger foothold in the global EV market, leveraging mutual strengths and fostering innovation to challenge China’s leading position.

The strategic initiative, expected to be finalised by 2035, will be discussed at the upcoming economic ministers' meeting between Japan and ASEAN members in September. The collaboration focuses on several key areas, including personnel training, decarbonization in production processes, mineral resource procurement, and investment in next-generation technologies like biofuels.

To support these efforts, Japan plans to utilise the 140 billion yen ($899.51 million) allocated by its Ministry of Economy, Trade and Industry for assisting the Global South. This fund will primarily be used for training personnel, enhancing skills and capabilities within the region.

In a related development, Honda Motor Co., one of Japan’s leading automakers, announced last week a significant increase in its investment towards electrification and software. Honda CEO Toshihiro Mibe stated that the company will double its investment to approximately $65 billion by fiscal 2030, responding to intensifying competition from Chinese automakers such as BYD.

Honda’s enhanced investment strategy includes the introduction of a new battery-powered vehicle series starting from 2026. These vehicles are expected to have a cruising range of over 482 kms, featuring ultra-thin battery packs and a newly-developed compact e-axle. Additionally, Honda aims to cut battery procurement costs in North America by more than 20 per cent and reduce production expenses by about 35 per cent by 2030, partly through increased parts integration.

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