Analysis of Japanese Powertrain Market

Government Efforts to Promote Fuel Efficiency Positively Impact the Japanese Powertrain Market

Rising gasoline prices and stringent environmental regulations are encouraging the gravitation toward hybrid vehicles. By 2015, the total hybrid market in Japan is expected to touch 500,000 units, driven by local OEMs, such as Toyota and Honda, and future emission norms. Alternative fuels, particularly ethanol and liquefied petroleum gas (LPG), are expected to contribute 3.0 percent of the overall sales. Initiatives undertaken by the government and industry participants are directed toward enhancing the uptake of advanced powertrain technologies and reducing emissions by at least 15 percent by 2010. The Japanese Government is currently prioritizing projects on clean energy and fuel efficient vehicles, primarily to comply with the Kyoto Protocol, lessen dependence on oil imports, and lower CO2 emission levels, notes the analyst of this research service. More than 60 percent of the targeted clean vehicles for 2010 in Japan are powertrain vehicles namely electric, hybrid, and fuel cell vehicles. The Japanese Government has launched a slew of projects, unleashing an array of new possibilities for the powertrain market. With climbing gasoline prices, the market for diesel-powered vehicles is expected to witness an upswing. Standardization of batteries is crucial for future powertrain vehicles. As batteries are vital components of hybrid vehicles, the development of more efficient batteries, such as nickel-hydrogen, lithium-ion, and lithium-carbon, is critical for maintaining healthy levels of demand for hybrid vehicles. Timely advancements in battery technologies alone can ensure the mass commercialization of alternative powertrain vehicles. Battery suppliers must go the extra mile and work in concert with automakers to speed up the commercialization of the technology. Next-generation vehicles will feature downsized engines with additional boosting capacity to retain the same power but minimize emissions and fuel consumption.

Market Constrained by Poor Infrastructure for Mass Production of Hybrid Vehicles

The lack of infrastructure for the mass production and commercialization of alternate powertrain vehicles is one of the major hurdles facing the Japanese automakers and suppliers. The hydrogen technology which the Japanese Government is promoting requires large supporting infrastructure such as refueling stations, and pipelines that will facilitate hydrogen transportation are still under construction, says the analyst. Besides, there is a lacuna in the area of financing programs that will support the sales of expensive powertrain technologies such as hybrid and hydrogen fuel cell vehicles. In the future, Japan is set to become a hybrid stronghold, capturing a market share of 25 to 40 percent by 2020, largely due to the country's strong purchasing power and general receptivity to new technologies. Automakers are sparing no efforts to cut down production costs, reduce component sizes, and find appropriate substitutes for expensive material requirements such as steel. For instance, using carbon fiber as a supplement for steel in key parts could reduce vehicle weight by up to 40 percent.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

• Powertrain
• Hybrids
• Alternative fuels
• Injection systems
• Ignition systems
• Displacement
• Configuration