Has Japanese car makers lost the plot?

Over the years Japanese car manufacturers have been introducing new cars with new technology but it seems that of late (in the last 10 years) it appears that the Japanese car manufacturers are losing the plot with their development. They have spent a lot of time developing hybrid technology and pushing their hybrid technology to the rest of the world. The Koreans have caught them in terms of design and also has significantly closed the gap with the Japanese in their design and development of hybrids.
The mainland Chinese have also closed the gap (the gap is still quite big but closing at a very rapid rate) in terms of design (less ugly now) and engineering. The Europeans have moved in a different direction altogether with their alternative hybrid and diesel technology.

The Japanese seems to be stuck in a time warp with their development and they appear to want to hang on to old technology as long as possible to earn as much as possible. Their Prius hybrid is still using nickel metal hydride batteries while the Koreans have introduced Lithium Ions which are far more efficient, lighter and more powerful.

The Japanese hybrids only do well in America and some parts of Asia. The Europeans do not see any benefits in the hybrids as the turbo diesels are far more efficient and offer greater fuel savings than the hybrids and there is no requirement to change the expensive hybrid battery.

The case for Japanese car makers in South East Asia seems to display their lack of direction. For example, Toyota launched their new Vios model with no improvements in terms of engineering by using the same 4 speed automatic and same engine as the previous generation. Creating a new exterior does nothing in terms of product advancement. The direct competitors from Hyundai offer 6 speed automatic transmission and power output levels that are few percent better than the outgoing model.

Japanese car makers are also using the CVT transmission that was abandoned by the Europeans. They seem not keen to take the gamble and move their development further. Everything seems to be stuck in year 2005!
If Japanese car makers are not willing up the ante with their development they will gradually be over taken by Europeans, Koreans and the mainland Chinese.