ASEAN-Japan Collaborate on Next-Generation Vehicle Strategy, with a Roadmap to 2035
Japanese manufacturers hold a significant market share in ASEAN, but Chinese automakers have been gaining ground in recent years. By deepening cooperation with ASEAN, Japan aims to strengthen its competitiveness in the region.
Japan, September 21, 2024 - The Japan government and the Association of Southeast Asian Nations (ASEAN) have agreed to collaborate on a next-generation automobile strategy. The joint plan, which extends to 2035, aims to expand the drivetrain lineup in ASEAN countries to include hybrid vehicles, invest in biofuels for decarbonization, and strategically invest in electric vehicles.
The agreement was reached at the recent Japan-ASEAN Economic Ministers' meeting in Laos. The two parties will also cooperate in other areas, such as expanding insurance coverage, promoting trade through public and private funding, and supporting female entrepreneurs and small and medium-sized enterprises.
The ”Future Design and Action Plan (FDAP)” which outlines the policies that the two governments will work on to achieve co-creation between Japan and ASEAN, has been revised to include a new interim report on a joint plan for next-generation automobiles. The final version of the joint strategy is expected to be drawn up as early as 2025.
In addition to next-generation vehicles, the revised FDAP includes seven new areas of cooperation: expanding trade through new insurance products, supporting insurance expansion for overseas companies, collaborating in science, technology, and innovation, and promoting a green and circular economy among small and medium-sized enterprises.
ASEAN is a major region in the Global South, and its economic presence is growing. Chinese companies, such as BYD, are becoming increasingly prominent in the automobile industry, particularly with electric vehicles. In the first seven months of 2024, BYD ranked fourth in market share in Thailand, behind Toyota, Isuzu, and Honda. Japanese manufacturers are facing growing competition and are taking steps to counter the rise of Chinese automakers.
