SATURDAY, AUGUST 29, 2026|No. 13114
Automotive Industry · Asia

Japanese Automakers Forge Alliances to Counter Chinese EV Market Growth

Facing intense competition from rapidly expanding Chinese electric vehicle manufacturers, Japanese car companies are increasingly turning to strategic partnerships and flexible production strategies to remain competitive and navigate technological shifts.

A diverse range of car models on display at an international auto show.
A diverse range of car models on display at an international auto show.
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Japan's carmakers are finding ways to fight back against the growing might of Chinese auto brands.

Outside of Toyota most Japanese carmakers are not big enough, or rich enough, to balloon out to the size of some of the new Chinese powerhouses.

Relatively small manufacturers such as Mazda, Mitsubishi and Subaru don't have the resources to overhaul their collective ranges and invest in electric, plug-in hybrid and hybrid technology all at once.

Instead they are borrowing from others. Subaru joined forces with Toyota to build EVs, Mazda with China's Changan and Mitsubishi with Taiwan's Foxtron, the latter is part of the company that builds iPhones.

How do they build those EVs?

They now have the tech but predicting demand for electric cars is proving difficult for all manufacturers.

Mazda and Subaru have found the solution.

Mazda is developing a new way of producing cars that would allow one production line to make internal-combustion engined vehicles, hybrids and electric vehicles depending on demand.

Subaru is also working on flexible production lines to help it make the most of its modest production resources, without having to build new factories or re-tool old ones.

This would help the pair adjust to lulls in EV demand without having to mothball production lines, which has impacted other major makers such as Ford and Volkswagen.

A way to escape tariffs

Subaru Managing Executive Officer Ikuo Watanabe told US outlet Autonews it would be able to adapt to changes in tariffs of exchange rate fluctuations to shuffle production between factories around the world.

"Demand trends are uncertain and we cannot predict which powertrain, battery-electric, hybrid or internal combustion engine, will sell well and when," Watanabe said.

"Making an investment decision on one specific technology poses the greatest risk."

Mazda ready for 2030 model onslaught

Mazda has pushed back its own in-house developed electric cars until 2029, with it instead relying on Changan's production to deliver its reskinned EVs.

Hybrid versions of its CX-5 SUV won't arrive in the US until late 2027 before rolling out to other markets, including Australia.

But it already has a plan in place to build all its different powered vehicles on the same line when they are available towards the end of the decade.

Unless things change, we will not survive

Former Toyota boss and now head of Japan Automobile Manufacturers Association Koji Sato recently called for the country's carmakers to join forces or risk oblivion, according to Autonews.

"Unless things change, we will not survive," Sato said. He is calling for all brands to have uniform parts to help reduce costs and complexity across the industry.

Japan's automakers believe this will help them tackle China's scale and speed.

PAN's pipeline reviewed approximately 1 open sources for this article. No human editor reviewed this article before publication.

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