[Feature: Future Mobility Society] Hitoshi Suzuki: The Future of Mobility Seen Through the Rise and Fall of the Automotive Industry

The automotive industry is in a "once-in-a-century period of transformation."

These words were written by Akio Toyoda (then President) at the beginning of the "Annual Report" in 2018, the year the closure of the Toyota Higashi-Fuji Plant was announced. The Woven City project, utilizing land in Susono City, Shizuoka Prefecture, declared a transition to a different kind of pinnacle from the factories that produce Toyota's finest models like the Century and Japan Taxi. Chairman Toyoda describes Woven City, which just opened on September 25 of this year, as a "human-centered city, a city for demonstration testing, and an unfinished city."

What was the era like 100 years ago? Regarding automobiles, cars became an indispensable tool for the lives of ordinary people and changed the very foundation of national economies and industries. The environment surrounding the automotive industry was an era of world wars, where the movement of people across borders was freer and more active than it is today, the United States became a superpower through the influx of immigrants, and empires competed for military and economic power.

The Model T Ford, which appeared in the United States in 1908, carved its name into world history as the first mass-produced automobile and ended production in 1927. This change was significant in four ways. Many workers (including those from abroad) flowed from rural areas to urban factories and became wealthy. Long-distance travel and mass transportation became accessible to the masses, and steam engines and electric vehicles with low battery performance exited the stage. With the exit of the Model T, which became obsolete without a single model change, cars grew into cultural content for showing off individuality and status, and European countries competed to follow suit. The strength or weakness of the automotive industry grew into an existence that determined the victory or defeat of nations in war. It was an era where changes in demographic composition and culture, innovations in transportation (power), and changes in the international order all occurred simultaneously.

How are these "once-in-a-century" changes depicted now?

A prominent commonality is (1) the power revolution. Another 100 years before gasoline cars began to be mass-produced, steam engines became more efficient in Europe and the United States, and maritime and rail transport developed dramatically. The mechanisms of motors and batteries were also discovered. It is an irony of history that American and European manufacturers are currently struggling while electric vehicles (EVs) are growing, especially in the Chinese market; it could be called a counterattack by countries once colonized by empires.

Hydrogen technology, which China is also embarking on, developed as military and space technology in the US and UK in the 1960s and is now in the spotlight as power generation for EVs and fuel for internal combustion engines. Hydrogen, which emits only water, is a technology suited for outer space and has come to center stage under the banner of "decarbonization," which did not exist 100 years ago. It has aspects of international norms created by the European Union (EU) and the State of California, which have strict environmental regulations, and has aspects of being led by nations and governments rather than market competition or needs, which differs from 100 years ago.

Next, regarding (2) lifestyle and culture, changes equal to or greater than those of 100 years ago are arriving.

The global spread of smartphones, the development of communications such as 5G, and the dramatic evolution of artificial intelligence (AI) are changing the definition of car functions, usage, and required convenience, such as subscriptions. Along with the introduction of apps and software, it is a change woven simultaneously by hardware evolution, such as dramatic improvements in semiconductor computing power, miniaturization, and power saving. It is a competition where one will fall behind if both hardware and software are not secured within one's own country.

In China, which overtook the US to become the world's largest automobile market in 2009, the number of young people (Gen Z) seeking domestic brand EVs such as BYD, NIO, and Xiaomi is increasing, while sales of traditional brands like Mercedes and Porsche are slumping. Sales performance is determined by the seamless digital life experience Gen Z seeks, and how highly (semi-)autonomous cars can link the in-car experience and real life, including shopping and movement, with smartphones. Even as the Biden and Trump administrations both tighten export restrictions on semiconductors and manufacturing equipment to China, they seem unperturbed.

The aspect most contrasting with 100 years ago is (3) the movement of people.

While the Trump administration rallies to "bring manufacturing back to the US," it pushes forward with measures that reduce the workforce. Authorities recently conducted a mass "raid" on immigrant workers at the construction site of a joint venture battery plant between Hyundai and LG. While China also reduces influx through its anti-espionage law, it sends large numbers of its own workers to the sites of its companies that have expanded overseas, which is viewed as a problem in Thailand as "zero-baht factories."

Both the US and China are retreating from the movement of people that supports economies of scale, moving in the opposite direction compared to 100 years ago. This can be called a retreat in the power of cultural dissemination and soft power, and a slowdown in movement slows the evolution of automobiles. Many of the great figures of the Meiji and Taisho eras who were passionate about developing domestic cars were those who returned from inspections or work in North America. Watching SNS, which is not a real experience, does not sufficiently convey the quality of things, experiences, or physical sensations. Amidst Chinese trends, cultural aspects such as in-car karaoke linked to smartphones may end up as a Galapagos phenomenon. However, technical elements such as battery technology, which carry and transmit cultural content, goods, and people, will likely cross borders. The mining and refining of critical minerals necessary for batteries heavily depend on China worldwide, and geoeconomic competition will likely intensify alongside the development of battery technology.

Finally, what about (4) the international order and the geoeconomic aspects of automobiles?

In 2001, China joined the World Trade Organization (WTO), and it seemed as though we had entered an era of global free trade. However, the current situation is a stalemate in a three-way structure: the "Western nations" versus "China and Russia," and developing countries that do not want to side with either. Although there is no colonial rule or slavery, we have returned to an era of competition between great powers (empires) where rule compliance has receded into the background. High tariffs are imposed, protectionism is on the rise, and globally optimized automobile production supply chains are forced to retreat into high-cost local production for local consumption.

The problem with the first Trump administration was its failure to follow international rules, but the second term is ridiculed for potentially not even following international promises it made itself in the past. It is harsh on allies and like-minded countries and weak-kneed toward the leaders of hypothetical enemy nations. In a "world without rules," Japan's "required character" was to be a reliable partner—one that properly follows rules and promises—and a dependable companion, and this expectation will likely increase precisely because of this era. This applies to Japanese cars, Japanese companies, the national government, and the Japanese people alike.

In an era of hardship for mobility, Japan's position is by no means secure.

When the free movement of people across various boundaries, such as national borders, is hindered, demand in the mobility market dampens. The author is working on network analysis of international aviation with science researchers from the University of Tokyo's Research Center for Advanced Science and Technology, and the centrality and strength of the US in the world, as well as the strong ties between the US and Europe, are becoming apparent. The US and Europe are densely connected in a mesh-like structure similar to the North Atlantic Treaty Organization (NATO) alliance, connecting not only capitals but also regional areas. This provides resilience where even if one route is cut due to an emergency, the connection is not severed thanks to short-distance detour routes.

In contrast, Asia-Pacific countries such as Japan, China, South Korea, and India are only connected to a few major US airports, forming nothing more than a "hub-and-spoke" structure similar to the structure of their alliances with the US. If a route is cut during an emergency, detour routes become long-distance, recovery of connections is slow, and there is a tendency for high cargo loads per flight, creating vulnerability.

The US network, which is a hub for global air traffic, is a reflection of the global flow of goods and money of US companies, and at the same time, it is the very "strength" of the US becoming a superpower through the influx of immigrants, such as immigrants and their relatives traveling back and forth to their home countries. However, the US is now pushing forward with policies that undermine this strength. Immigrants, such as Elon Musk and Chinese and Indian engineers related to AI, have been at the forefront of US innovation. What is the next move to survive an era where geoeconomic challenges overlap with a "divided era" of mobility hardship?

One hint might be the Woven City mentioned at the beginning.

In my personal opinion, by intentionally creating a world without "Toyota cars as private vehicles" with its own hands, Woven City aims to look ahead to the world after "Connected, Autonomous, Shared & Services, and Electric (CASE)."

Japanese cars have been trusted and distributed all over the world to the extent that the only places they aren't running are the North and South Poles. After doing its best in car development, production, sales, and aftercare, what is the meaning of Toyota now embarking on a "future" it has not yet conquered? It is said that if cars become commoditized like home appliances, individuality and precision will not be sought as much as they are now, and automobile manufacturers will fall into the position of subcontractors for GAFAM and others. Toyota seems to be creating such a world in advance to search for its own role and "place."

If things go wrong, it could become a "tremendous waste of money" once in a century. Future predictions can also be simulated in virtual worlds. The answer seems to lie in the secrets of research that apply to both the humanities and the sciences. Humans cause unexpected errors. Coincidental encounters and chemical reactions occur. In a virtual world, such "incidents and accidents" do not happen. In the exploration of a "society without Toyota cars as private vehicles," the "partners" who are not usually directly involved in car-making will likely be the protagonists. It can be interpreted as the cutting edge of the integration of arts and sciences, where humanities elements including culture, tradition, and casual daily life are added alongside scientific technological development. This can be practiced daily in places and organizations other than Woven, and it seems it will foretell Japan's next move.

Regarding Woven City, Daisuke Toyoda told Forbes magazine, citing Aikido, that "how to break the mold is the challenge Toyota will tackle from now on." In the "Annual Report 2018," Akio Toyoda also stated, "speed and ignoring precedent rather than following it," and "'follow me' rather than consensus-building," concluding as follows:

"As they are called 'beloved cars' (Aisha), love is attached to cars. I want to remain committed to ensuring that love is always attached to the mobility of Toyota, which originated as an automobile company."

Is it naive for the most advanced theme to be "love"? As president, Akio Toyoda once inspired others to "make ever-better cars." Although he received a "rough welcome to office" in the form of recall issues in the US, he set forth a pivot that would continue to be valid 20 years later, rather than indicators like numerical targets that can be foreseen in a few years. Not limited to Toyota, and without distinction between humanities and sciences, how will we answer the challenge for everyone to be happy? Even if cars and motorcycles become EVs or autonomous, I want to be excited, and even if I can no longer drive and find it difficult to walk, I want the robot that carries me on its back to take me shopping to be a "Japanese car." This is my modest answer.