MSM is the last to understand anything and only report on it well after the fact.
Japanese cars, at least the mainstream models for mass market ie not Lexus, specialty models within Toyota/ Nissan etc, are bland, designed and engineered with close to zero care for people who actually like cars, even those who appreciate cars only occasionally. Their choices of plastics and even interior colour schemes show them to be the frozen foods of the car world where the majority only want something for sustenance. An A to B that will run for decades. Nevermind that the majority of Japanese cars have played it safe where the European makers (especially French and Italian ones) have dared to venture further with respect to design and occasionally also technology.
The markets has preferred Japanese for the last 30 years due to economy and value for money, then it became slightly better reliability and ease of repair mostly due to production scale and nothing more. The thing is, tastes shift, market preferences shift. You can't keep flogging the same hard, hollow grey plastic interior with the exact same air vent styling (can be done in 10 minutes by a 10 year old at least Toyotas seem to do it this way) and expect the market to continue choosing your products for the next decade.
On the trend of powertrain, yes they got it wrong. Toyota bet wrong on hydrogen fuel cell. The reception of HFC tech hasn't been great but it is still a great piece of technology and will have applications. If it didn't, many other carmakers wouldn't also be developing it.
Out of all the Japanese makers, it seems that only Mazda (outside of the upmarket subbrands Acura and Lexus) seem to understand the importance of design. Toyotas look rubbish. Some look decent enough but their interiors are nearly always garbage to look at garbage to touch garbage to use. But the vast majority either don't care or don't know how to care and appreciate the differences. Increased competition means improved products from Japanese carmakers. The issue then is that of the powertrain. Japanese makers have hedged, at least most of them have. Not sure what Subaru plans on doing because they still aren't anything that special wrt offroad vehicles and their boxer engine layout is a whole lot of meh at the end of the day. Toyota is probably the most well positioned one out of the bunch. At least Toyota has hedged the most, have backup plans and have invested into some new technologies.
The thing is, Chinese carmakers have become fucking interesting. Like properly offering daring ideas and designs. Look at the entire ecosystem of Chinese carmakers. Holy shit. Motorized mechanical dashes with integrated infotainment systems, programmable lights (HiPhi X/Z), four wheel steering to another level using NEV inherent ability to accommodate things like wheel independent electric motors, autonomous driving using a variety of means, daring designs and also conventional ones that are still unique and new (something like the Hongqi EHS9). Everything from GAC's GS8 to NIO's flagship sedans, you can see effort. Now take a look at the latest Toyota SUV or Honda sedan. They're really resting and repeating the same old in a slightly different package. It's stale. German brands offer performance and other qualities the Japanese aren't playing against. Within the economical to entry level premium price brackets, the Japanese carmakers are really running on established reputations. If it were a more immediate market response, Japanese car sales would tank far below Korean ones. Chinese production cars often resemble concept cars in style whereas the Japanese ones tend to feel like white Toyota vans from the early 2000s.
Look at how stylish mainstream Hyundai and KIA models have become. Not to mention home runs like Genesis. While styling is easy to brush up or catch up on, powertrain isn't. The amount of capital invested in the R&D side of Japanese auto industry is roughly going to be equal to China's now but the innovation of Japanese products are currently below the Germans, Chinese, and Korean counterparts. The 1990s was the height of Japanese auto industry in terms of products. Their economic height I conjecture to be the 2010s.
While we can chalk up the majority of car infotainment, connectivity, and EV powertrain innovation to Chinese automakers and supply chains, Japanese ones currently only have the mechanical gearbox for EV (Toyota), hydrogen fuel cell... and that's it. Germans and Italians have performance and dynamics. Styling wise Koreans, Chinese, and Germans are leagues ahead of Japanese automakers but this is a field that's relatively easy to adjust.
