Nissan Motor and Mitsubishi Motors have unveiled two new electric mini vehicles, betting consumers will embrace a battery-powered take on the well-loved class of tiny, affordable Japanese cars.
Marking a key push into a less-served part of the EV market that could help spur wider adoption, the chiefs of the car makers took the wraps off Nissan’s Sakura and Mitsubishi’s eK X EV on Friday.
The boxy EVs are set to go on sale in Japan this summer, at a starting price of less than $15,000.
Small and affordable “kei” mini vehicles are a popular means of transportation in Japan, especially among workers and families living outside major cities, where roads are narrow and public transport is sparse.
In 2020, they made up more than a third of new passenger car registrations in Japan.
“What Nissan and Mitsubishi are doing, this is the way it should be,” said Takeshi Miyao, an analyst at automotive consultancy Carnorama, referring to their alliance that also includes Renault, and which has been strained in recent years.
“This technology is going to be beneficial for the alliance.”
As Japan’s government pushes for the country to go net-zero emissions by 2050, the kei-car segment has been highlighted as one that’s especially difficult to electrify.
Industry officials have warned adding batteries to kei cars could push their prices out of traditional buyers’ reach.
The cost of buying kei EVs should eventually fall to less than 1.5 million yen ($11,700), according to Mr Miyao. Nissan and Mitsubishi’s joint models get pretty close. After subsidies, both cars start at around 1.8m yen.
While that’s on the expensive side for the category, Japanese car makers have been nudging prices higher in recent years, as they’ve added more features and safety technology.
The vehicles developed by the car makers’ NMKV joint venture are fitted with small 20 kilowatt-hour batteries, giving them “enough cruising range to meet daily needs", Nissan chief executive Makoto Uchida said at an event in Okayama, in Chugoku region.
“I hope many customers will be able to experience the benefits electric vehicles can offer.”
Other car makers — including Honda Motor and Daihatsu Motor, a unit of Toyota Motor — are crafting plans to roll out their own electric mini models within the next few years, which could accelerate Japan’s relatively slow embrace of EVs.
UAE currency: the story behind the money in your pockets
Company%20Profile
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Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
