Japan and Germany are the two most familiar names when it comes to the automotive world. Both nations have gained expertise in manufacturing automobiles and have decades of experience in this regard. They are competing fiercely in several countries and providing consumers with a variety of products to choose from. Specializing in particular segments of cars, they have tried to make their mark in their opponent’s turf, but seldom they succeed.
Japan has been known to make reliable and rugged cars, that are generally used by an average consumer and some of its high-end vehicles are also making inroads in their respective segment. Germans on the other hand are traditionally known for their high-end luxury cars that have a high price tag, apart from Volkswagen which also a lineup for mainstream consumers. According to Statista, German cars performed extremely well in China, which is the largest car market in the world, second only to the USA.
The recent craze of SUVs has made both the rivals step up their game and introduce new vehicles in this popular segment. Although Japanese companies have introduced new crossovers, SUVs and pickup trucks it is the German companies that have a longer lineup in this niche. From Mercedes Benz to BMW, the competition is quite fierce, and it continues to grow with the passage of time.
Mercedes GLE, one of many SUVs on sale by German automakers
There have been ups and downs for both the Japanese and German automakers, but here we will be taking a look at the competition in 2020:
Which one is most popular in 2020?
Initially, 2020 started well for the auto manufacturers of both countries. But then Covid-19 drastically slowed down the sale of automobiles. China, which is the largest market for such goods, came to a screeching halt due to the nationwide lockdown, followed by the US and other European countries. According to Statista, before the pandemic, the sales were expected to hover around 80 million units. But in the current scenario, the auto industry is in a free fall, though things are starting to get better due to the somewhat successful containment of coronavirus.
Toyota and Volkswagen lead the market in terms of the number of sales around the globe. Volkswagen has several brands under its umbrella, which also count for its enormous sales volume. Whereas Toyota continues to be dominant in more mainstream vehicles such as the corolla and Camry. In the US, Toyota managed to get an even bigger share of slice after the majority of carmakers pulled out of sedan market, its flagship sedan Camry ranked number 6th in terms of number of overall vehicles sale in the United States. Even in this era of SUVs and pickup trucks, the Camry did pretty well. The new lineup of Camry known as Camry TRD also managed to create a hype in the market and caused a further increase in the vehicle’s sales.
Toyota Camry TRD, a sportier version of regular Camry
Some of the most prominent sedans in the world such as Honda Civic, Accord, and Toyota Corolla have been the best-selling cars in the world for quite some time. They mainly face competition from German giant Volkswagen in Europe, while the USA, Canada, and the Asian markets continue to be dominated by Japanese manufacturers in 2020.
Competition in the SUV segment:
Another emerging market for both the competitors is SUVs, crossovers and pickup trucks. As mentioned above, there is a growing lineup of these segment of vehicles in the market by all the manufacturers around the world.
German carmakers though are a step ahead, nearly every automaker from Germany has a series of SUV or a crossover, and they are posting good sale numbers in 2020 even though the pandemic has affected the sales of sedans, but the SUV market has managed to stay ahead in these challenging times. Due to a larger number of these vehicles offered by the German companies, and in part to their striking design language and additional features compared to the Japanese competitors they outsell the Japanese crossovers and SUV in Europe, meanwhile, they continue to pose a threat to their Japanese rivals in the USA.
Rav4, Toyota’s flagship SUV
In China, demand for luxury SUVs is growing on a steady path, that is the reason why the German vehicles follow the design language that is more biased towards the Chinese market.
Decline in sales due to Covid-19:
One main reason for the decline in the sales of German cars is the coronavirus pandemic, which has shrunken the buying power of consumers. As German cars tend to be on the expensive side, the pandemic affected them the most. Their main market in 2020 is the Chinese market, which is the main reason why Mercedes Benz has decided to shift several jobs from Germany to China. According to best-selling-cars, both BMW and Mercedes Benz sold a record number of vehicles in 2019 in China.
Although there is not enough data released by the carmakers for their sales in 2020, according to rough estimates the pandemic will mostly affect the sales of luxury German and Japanese cars. Even though car companies have offered discounts and incentives due to the slumping market response as a result of coronavirus, the sales remained dismal during the first half of 2020. The second half gave the manufacturers a sigh of relief and the sales saw an upward trend.
Popularity of German vehicles in Europe:
German cars specifically Volkswagen traditionally have been more popular in Europe, Volkswagen’s sub-brands Skoda and SEAT remain the most popular brands in the region while VW Polo also posted respectable numbers in sales. Additionally, the introduction of newer models by the German manufacturers have increased their sales even in the midst of the pandemic. Though worldwide, Toyota and Volkswagen continue to lock horns in terms of sales.
Growing EV market:
The global push for environment-friendly vehicles and low carbon emissions has created a new market for both nations. While Toyota is a pioneer in hybrid technology, it failed to create its mark in the EV market. Apart from Honda and Nissan, there has been no significant development by the Japanese automakers. Volkswagen recently launched the id3 and id4 at a competitive price, which is meant to take on the Japanese gasoline vehicles. The id3 has a huge demand across Europe where it is currently on sale and VW is ramping up its production. Meanwhile, the Japanese have no EV vehicle to compete with the Germans. BMW and Mercedes Benz both have plans to introduce new products in this segment and all these German vehicles may give them the advantage over their competition.
There may be some time before the EV vehicles become mainstream and affordable. But the competition is already heating up and if the Japanese players want to stay relevant in this segment of the future then they need to come up with new EV vehicles. Otherwise, the future looks bleak for them.