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Battery powered utility vehicles are the ones that kill it!
- Aug 24, 2018 -

Traditional car manufacturing is in jeopardy,Battery powered utility vehicles are the ones that "kill" it!

With the vicissitude of time, internal combustion engine gradually withdraws from the historical stage, the supplier in the traditional automobile supply chain is facing the survival test, aichi prefecture which gave birth to automobile giant Toyota is the epitome of the whole times change.

Carmakers face a dilemma of change

The risk of a trade war with Mr Trump is already looming, and Mr Kimura is now in deep distress.

The company he runs, which makes engine parts, has been caught in an endless cycle of cost cuts in order to remain competitive.

Toyota's President, akio toyoda, isn't worried. His real concern is Shared vehicles, electric vehicles and driverless cars, factors that threaten the transformation of the traditional car industry that relies on the internal combustion engine.

He claimed last fall that a "once-in-a-century" shake-up would threaten the survival of the traditional car industry.

Akio toyoda,

Starting last month, the Japanese government put pressure on automakers to stop producing fuel vehicles by 2050.

That is a long time coming, but China, the world's largest car market, aims to have 20% of all electric vehicles sold by 2025.

The problem in aichi prefecture, home to hundreds of suppliers, including Toyota and Asahi Tekko Co., is that there are about a third fewer parts for electric vehicles than there are today for fuel vehicles.

Obviously, you can't find pistons, camshafts, fuel injectors, fuel pumps, spark plugs, and catalytic converters on electric vehicles.

That means layoffs.

That is a harsh reality, since electric cars accounted for just 1% of global car sales last year.

Most analysts say the process of phasing out fuel cars will be a very long one.

The success of Toyota's prius hybrid has allowed aichi to maintain its status quo for longer, as Toyota has been slower to transform pure electric vehicles than other auto makers.

However, Toyota announced that it would start adding more than 10 all-electric vehicles to its product line by early 2020.

At the same time, Toyota is developing a solid-state battery to strengthen its competitiveness in pure electric.

Top Japanese suppliers Denso corp. and Aishin Seiki Co., which are part-owned by Toyota and have billions of dollars in revenue, are ramping up their investments to keep up.

Why is change so hard?

A visit to kimura's factory in binan, an hour and a half's drive from Toyota's headquarters, makes it easy to see how difficult change is.

It's a relatively large company with 500 employees, but walking in there has a sense of traversing.

Asahi has been working on the same engine and transmission parts for decades, and some workers are still working on machinery purchased in 1971.

"If you ignore the computer, you might even think it's in showa's time," kimura said.

Akihiro era at the mouth of kimura, whose reign ended in 1989.

To change things, kimura began reforming the company five years ago.

He added more software and sensors to the production line to reduce waste and also laid off some employees.

But his biggest innovation was the creation of iSmart Technologies, a consultancy that teaches other manufacturers how to streamline processes.

Kimura aims to end up with as much revenue from information services as from car parts.

"" if electric cars and Shared vehicles really develop, a lot of our business will disappear," "he said.

At the bottom of the supply chain, fewer than 30 people are employed, and they have less money to invest in new businesses and technologies.