Report: Japanese Automaker Mergers Coming

2015 Toyota Camry (Credit: Toyota)

Soon enough, the Japanese automotive industry could look a lot like the United States, with a few big players and virtually nothing else. That’s according to a new report from Automotive News. If the prediction turns out to be accurate, some brands people know and love today could be forever changed, or completely annihilated.

The report is predicting that the Japanese automotive industry will look like a slaughterhouse up through 2020. As the dust clears, supposedly only three or maybe even two independent automakers will be left. Considering eight automakers call Japan home right now, that’s a huge change.

Toyota moving to acquire Daihatsu last month has kicked off this whole bloodbath. Rumors suggest that Suzuki is next on the menu for Toyota, even though the company denies that’s the plan.

Technology is being blamed for this market shift. As Daihatsu brass has confirmed, it’s difficult for many traditional small automakers to work on developing electrified powertrains, new autonomous drive capabilities and vehicle connectivity innovations. They simply don’t have the know-how or resources to effectively compete in the market, while bigger automakers like Toyota and Nissan do.

Right now, the 800-pound gorilla in the Japanese auto industry is Toyota. That’s not a surprise, considering the company keeps competing for the slot as the largest automaker in the world. With its financial might, Toyota can bury everyone else when it comes to R&D.

There’s a strong possibility that some Japanese automakers will join alliances instead of dying, like how Chrysler and Fiat have merged. A lot of crazy rumors have been thrown around lately, including Honda merging with GM, or Mazda and Volkswagen getting together. Mitsubishi seems to be a prime target for acquisition by a foreign company.

Joining up with foreign automakers doesn’t mean Japanese automakers won’t face new difficulties. Nissan got into a tiff with its partner Renault not that long ago. The two won’t likely split, because the partnership most likely saved both from doom.