Ride Sea Changes Better — Smart Car Edition

Sam Lin
5 min readDec 23, 2024

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On Dec. 23, 2024, Honda and Nissan just confirmed a plan to merge by Aug. 2026 potentially include Mitsubishi too. But what happens before that & after? Sorry, it’s too little & too late. 🥲 To put up a good “gunfight”, bring 3 old knife won’t cut it. Try asset-light & a competitive transparent supply platform instead. 🦾

Google Japan Office

It’s sad to see the surge of job cuts in 2024 for cars¹. But there is still hope. My friends, you always have another choice. I sincerely hope 2025 will be different. However, hope is not a strategy. If you cannot turn the tables in 2025, it could be too late. So, car brand CEOs, new or incumbent, how will you lead to a better position in 2025? Here are my 2 cents. Note: call me crazy, but it’s “wartime.” I hope you are not just fighting for survival. Why not also bet to pave the way to a better future. Trust me, this way is more fun.

1. Become Asset-Light Actual

Volkswagen tried to close ‘at least’ 3 German plants² in Oct. Then, a deal was reached on Dec. 20, still includes more than 35K future job cuts and sharp capacity reductions with unions to avoid mass strikes³. Sure, offshoring manufacturing or downsizing can reduce some costs. Beside it’s at the expense of quality and velocity, it’ll not get you too far. Because lowering the cost is not only tough, but also hard to beat the fundamental change in the cost structure.

Reuters: VW Group’s labour cost burden outweighs competitors.

To preempt the competition, I would unbundle car design and brands from car manufacturing. With a TSMC for smart cars — smart car Manufacturing as a Service (MaaS)⁴ — car brands could be truly asset-light. They could deliver innovations to their market more agilely and with a higher margin. The opportunity window to avoid becoming “Nokia” is closing rapidly. Act now to become “AMD” instead of “Intel”. 😉

Time: 2024 CEO of the year — Lisa Su

The Death Spiral

In Nov., Nissan plans to cut production capacity by 20% and reduce its global workforce by 9K to turn around⁶. 4 years ago, Nissan was celebrating ten 10 years of the all-electric LEAF⁷. Which was the first mass-market electric vehicle (EV). How did Nissan get here so fast?

Last week, Honda and Nissan are talking to merge to become No 3 carmaker to compete with Tesla and Chinese rivals⁸. That may buy some time to stay in the game if they execute swiftly. But what could be an even better strategy to keep them relevant in the new world of smart cars?

Financial Time: Merger with Honda will redraw Nissan’s ownership structure

The Other Game: Value Creation

When I visited Japan this Oct., a common theme I observed was depression. Most car people I talked to focused on cost reduction as their top priority. But do you really think Japan can beat China solely on cost leadership? I don’t think anyone can, not even Korea or Taiwan, to be honest. So what else should one do? Psst, Value creation! That may be the only way out.

Then I visited China in Nov. Even though I knew cars in China were different, they still managed to surprise me in many good ways. Chinese car brands are already eating the world of cars. Not only their low cost supply chains, but also new features & values they are adding at the light speed.

Personally, I bet (with 80% confidence) that the trend will not just accelerate in 2025, but the momentum will also multiply as they consolidate⁹. Sure, tariffs will slow them down a bit, but for how long? Even if a few competitors catch up, there has to be a better alternative. But what?

Xiaomi SU7

2. Create a Transparent Supply Platform

The world of cars will be better with another transparent supply chain. But why not further transform the chain into a platform? It would not only be quicker by parallelizing the efforts, but also cheaper, driven by aggregation and competition. If you want to know how to build it, talk to me. I always have a few more crazy ideas. The question is do you dare.

BYD office

References

[1]: Slowing global sales spark layoffs in 2024.
https://www.automotivedive.com/news/slowing-global-sales-layoffs-job-cuts-2024/735581/

[2]: Historic moment for Volkswagen: Automaker plans to close ‘at least’ 3 German plants and cut thousands of jobs.
https://www.cnn.com/2024/10/28/business/volkswagen-factory-closures-layoffs/index.html

[3]: VW reaches union deal to cut 35,000 German jobs after gruelling talks.
https://www.reuters.com/business/autos-transportation/rapprochement-between-volkswagen-union-wage-talks-sources-say-2024-12-20/

[4]: Manufacturing as a Service — Smarter Car Edition.
https://samlin001.medium.com/manufacturing-as-a-service-smarter-car-edition-b564429762ae

[5]: Intel Thank U, Next.
https://samlin001.medium.com/intel-thank-u-next-681215078d9a

[6]: Nissan reports first-half results for fiscal year 2024.
https://global.nissannews.com/en/releases/241107-01-e

[7]: A decade of innovation — the LEAF’s incredible journey.
https://www.nissan-global.com/EN/STORIES/RELEASES/nissan-leaf-10years/

[8]: Nissan Needs a Honda Rescue. What Went So Wrong?
https://www.wsj.com/business/autos/nissan-needs-a-honda-rescue-what-went-so-wrong-fa6a86b2

[9]: SmartCar 2025 Predictions.
https://www.linkedin.com/posts/samlin001_smartcar-ev-smartplaceonwheels-activity-7274138619076878336-7gIH

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Sam Lin
Sam Lin

Written by Sam Lin

A Taiwanese lives in Silicon Valley since 2014 with my own random opinions to share. And, they are my own, not those of companies I work for.

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