Automotive industry in Japan: opportunities for car technology suppliers

Automotive industry in Japan: opportunities for car technology suppliers

Opportunities in the Automotive industry in Japan

Japan is a globally competitive and progressive country. It is also considered to be an economic superpower. A very large contributor to Japan’s impressive reputation is its highly progressive automotive industry.

 

What should you know about the Japanese automotive industry?

The Japanese automotive industry is one of the most prominent and largest industries in the world. It has consistently been one of the top three global manufacturers since the 1960s. Production has been on a rapid increase, aiming for both domestic use and worldwide export since the 1970s. A decade later, Japan overtook the US as the automotive production leader and was soon dominating the top 10 global sales in 2012.

Also, the Japanese utilise the Keiretsu structure that sets it apart from competitors. This structure is one in which the suppliers predominantly deliver to their shareholding companies.

What makes the Japanese automotive industry one of the top industries in the world?

The Japanese place a high value on innovation. Its automotive industry is a highly innovative one that excels in quality and production. Skill in the areas of price, quality, performance, design and fuel consumption has resulted in global leadership via growing vehicle sales.

Moreover, the Japanese highly value the interconnection of simplicity of car production, innovative development, and quality assurance processes. They call this approach Kaizen, which means the process of continual improvement.

Which companies are the leading Japanese OEMs?

When it comes to production data, Toyota is at the top. Its huge market share of 45% of domestic production is greater compared to other high production volume OEMs, most of which are based outside Japan. Following Toyota Motor Corporation and Nissan Motor Company (via the Renault-Nissan Alliance) are Honda and Suzuki.

What is the status of e-vehicles in Japan?

Japan had an early recognition of the need for e-vehicle development. Research on various related technologies, backed by government support is being conducted since the 1970s. This initiative was triggered by issues related to car pollution problems during the 1960s and the 1973 oil crisis.

In 2013, Japan sold the second largest number of plug-in electric vehicles (PEV). This number has however been dropping. In 2014, local PEV players, Nissan, Mitsubishi and Toyota did not introduce any new e-vehicles. Viewing this as an opportunity Tesla introduced its latest e-vehicle into the Japanese market in the same year. Tesla has 2 major outlets in Japan and is in the process of setting up EV chargers in 32 locations around the nation.

Currently, Japan is one of the leading countries in the world when it comes to e-vehicle production.

Who should try to work with Japanese customers?

If you aim to work with potential Japanese clients, technical leadership is very important, preferably backed with proven experience in the field. The ability to adjust to Japanese requirements is crucial to making a profit. Moreover, if you are planning to initiate and maintain a long and harmonious working relationship with your Japanese business partner or client, make sure that you both understand targets and the steps needed to fulfill customer expectations on a mutual level.

For information on the Japanese automotive industry, refer to market research reports and seek assistance from export specialists to understand how to enter the market and make a profitable mark.

This entry in Asia was updated on June 5, 2018 by specialist.