The Fundamental Learning of Growing Nations is "Philosophy"
The Fundamental Learning of Growing Nations is "Philosophy"
However, the fundamental learning of modern Japanese people is "getting high scores." Naturally, this is not a competition we can win. The great development of Japan in the late Showa era was solely under the protection of the United States. Moreover, the founders of companies that achieved remarkable growth during that time all lived with a clear "philosophy." Take Soichiro Honda, for example—he had almost no formal "education" as society defines it (graduating from a higher elementary school, equivalent to middle school), yet he had a well-defined philosophy.
Nissan’s Struggle for Reconstruction
There was an article in the Nikkei titled "Nissan (with approximately 130,000 employees and an estimated over 1 million subcontracted workers) and the Road to Recovery." However, considering the current era, where there is a major shift from the old economy to the new economy, there is no guarantee that all Japanese automobile manufacturers (which belong to the old economy) will survive.
Nissan abandoned its merger with Honda and decided to rebuild on its own. Honda, after closely examining Nissan, found that its bureaucratic corporate culture resulted in slow decision-making, and upon further scrutiny, realized that Nissan had almost no valuable aspects. Fearing mutual collapse, Honda deliberately proposed terms that Nissan could not accept, stimulating Nissan’s bureaucratic pride and causing Nissan to back out of the deal.
Nissan has been struggling with poor sales, dropping to the fifth place in market capitalization among Japanese passenger car manufacturers. It is estimated that restructuring will require losses exceeding 500 billion yen (though realistically, it would require several times that amount). Moreover, by March 2026, Nissan faces the redemption of 580 billion yen in corporate bonds, making cash flow a pressing issue.
Outline of the Restructuring Plan
November 2024: Announced a 20% reduction in production capacity (1 million units) and a reduction of 9,000 employees (though a real need for 50,000 layoffs exists).
January 2025: Announced restructuring measures in the U.S., but factory closures were avoided.
April–September 2024 Financials: Competitive strength weakened in key markets, resulting in a net cash outflow of approximately 448.3 billion yen. Available cash decreased by 30% in six months, down to 1.4 trillion yen.
Cost and Impact of Restructuring
Impairment loss on equipment: Estimated at 340 billion yen.
Personnel reduction costs: Estimated at 90 billion yen.
Total restructuring costs: Likely to exceed 500 billion yen.
While impairment losses may reduce future burdens, in the short term, they will expand the deficit. Nissan's projected net loss for the fiscal year ending March 2025 is estimated at 225.8 billion–330 billion yen.
Challenges Ahead
Factory utilization rates: Nissan’s U.S. factories operate at 58%, far below Honda’s 96% and Toyota’s 81%. In China, where price competition is fierce, Nissan’s utilization rate is only 45%.
Production vs. Sales: While Nissan has a global production capacity of 5 million units, its sales outlook is only 3.4 million units.
Performance Comparison of Japanese Automakers (2024 Sales and 2025 Financial Forecasts)
Manufacturer G,Sales (2024) O,Profit (FY 2025) M,Capitalization PBR
Toyota 10.82 million units 4.8 trillion yen 44 trillion yen 1.03
Honda 3.8 million units 1.4 trillion yen 7.5 trillion yen 0.54
Nissan 3.34 million units 0.14 trillion yen 1.6 trillion yen 0.28
Suzuki 3.24 million units 0.58 trillion yen 3.7 trillion yen 1.25
Mazda 1.27 million units 0.2 trillion yen 0.6 trillion yen 0.38
Subaru 0.94 million units 0.42 trillion yen 2.1 trillion yen 0.84
Mitsubishi0.85 million units 0.14 trillion yen 0.5 trillion yen 0.54
From this table, it is clear that Japan’s seven automakers consist of one strong player, one mid-tier company, and five struggling companies. Weak Nissan has attracted acquisition interest from Foxconn (Hon Hai Precision Industry), raising concerns over activist shareholder influence. For reference, Tesla, whose stock is currently plunging, still has a PBR of 15.95.
The Need for Radical Reform in Japan’s Automotive Industry
The transition to the new economy demands substantial investments in EV development and autonomous driving technology. Meanwhile, debt refinancing raises concerns about increased interest burdens due to declining credit ratings. Nissan’s PBR is just 0.28, and its market capitalization is one-fifth of Honda's.
The future of the global automotive industry is rapidly shifting from "cars" to "vehicles." The transition to BEVs (Battery Electric Vehicles) is essential for extending humanity's survival, especially considering the current era of global warming. With the advancement of autonomous driving, vehicle utilization rates must increase to at least four to five times their current levels—there is no other option. The development of AI humanoids is also accelerating, which will lead to a significant reduction in product costs. Vehicles will undoubtedly become infrastructure-like assets, with software value taking precedence.
In terms of future vehicle pricing:
① The low-price segment, mainly for last-mile logistics, will be around $15,000 (approx. 2.27 million yen).
② The mass-market vehicle segment will range from $20,000 (approx. 3.03 million yen) to $25,000 (approx. 3.78 million yen), with companies like Tesla, VW, Honda, and BYD already announcing models in this range.
③ Robotaxis and similar vehicles will be priced at around $30,000 (approx. 4.54 million yen).
④ Vehicles for wealthy individual owners will range from $40,000 (approx. 6.06 million yen) to $50,000 (approx. 7.57 million yen).
⑤ For old-fashioned wealthy individuals with a strong "status-driven" mindset, vehicles will likely be priced at $100,000 (approx. 15.14 million yen) or more.
Without drastic, zero-reset reforms—which may include massive layoffs (e.g., 2–3 million job cuts)—the future of Japan’s auto industry in the new economy is 99.999999% doomed.
Learning from Successful Reforms: Elon Musk’s Approach
Japan’s bureaucratic corporate leaders refuse to imitate proven success stories. Take Twitter (now X), for example: Elon Musk’s massive job cuts (80% of employees, from 7,500 down to about 1,300 by January 2023) were widely criticized, leading to a sharp decline in advertising revenue. However, by 2024, despite halving revenue, profitability doubled compared to when Twitter had 7,500 employees.
In just two years, X’s productivity per employee increased tenfold, and its profit margin quadrupled. The mindset behind this radical transformation is "First Principles Thinking."
First Principles Thinking and Its Application
This "First Principles Thinking" can be applied to all aspects of human activity, including homebuilding. Our company is one of the rare few that values and applies First Principles Thinking in home construction.
My personal philosophy and way of life are also deeply rooted in First Principles Thinking. If we truly apply this mindset to everyday life, then the idea of "going grocery shopping at a supermarket" itself becomes inconceivable.
I invite you to explore our website and experience the essence of First Principles Thinking for yourself.
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