January 22, 2012 at 10:06 am

Japan Fights Back

Toyota is pushing its hybrid technology forward with plug-in hybrids. Honda and Mazda Motor Corp. are pressing forward with new innovations to increase fuel efficiency and cut emissions. And in a major acknowledgment of how the world has changed, Toyota has abandoned its resistance to diesel-powered vehicles and signed a deal with rival BMW AG of Germany to jointly develop diesels for Toyota.

But even with all that, a new threat is emerging for Japan Auto Inc. – China.

Mr. Endo recounts a telling conversation he had with Chinese government officials.

He was told that Beijing wants three of its auto makers to be listed among the top 10 global car manufacturers by 2030, but the officials did not believe China can catch the Japanese, Americans or Europeans in conventional gasoline engines.

That means the world’s most-populous country will focus on battery-powered or plug-in hybrid vehicles and is able to do so without the constraint of investors demanding an immediate return.

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