2. The Japanese automotive
industry is one of the most largest
industries in the world. Japan has
been in the top three of the countries
with most cars manufactured since the
1960s, surpassing Germany.
The automotive industry in Japan
rapidly increased from the 1970s to
the 1990s (when it was oriented both
for domestic use and worldwide
export) and in the 1980s and 1990s,
overtook the U.S. as the production
leader with up to 13 million cars per
year manufactured and significant
exports

3. began building their first automobiles
in the middle to late 1910s. The
companies went about this by either
designing their own trucks (the market
for passenger vehicles in Japan at the
time was small), or partnering with
a European brand to produce and sell
their cars in Japan under license.

4. companies cars producers
Toyota,
 Honda,
 Daihatsu,
 Nissan,
 Suzuki,
 Mazda,
 Mitsubishi,
 Subaru,
 Isuzu,
 Kawasaki,
 Yamaha,
 Mitsuoka.

5. The First Passenger Car Produced in
Japan

6. • Cars built in Japan before World War II tended to be
based on European or American models. The
1917 Mitsubishi Model A was based on the Fiat A3-
3 design. (This model was considered to be the first
mass-produced car in Japan, with 22 units
produced.) In the 1930s, Nissan Motors' cars were
based on the Austin 7 and Graham-Paige designs,

7. • 1925 until the beginning of World War
II, Ford and GM had factories in Japan, where they
dominated the Japanese market. The Ford Motor
Company of Japan was established in 1925 and a
production plant was set up in Yokohama. General
Motors established operations in Osaka in
1927. Chrysler also came to Japan and set up
Kyoritsu Motors. Between 1925 and 1936, the United
States Big Three automakers' Japanese subsidiaries
produced a total of 208,967 vehicles, compared to the
domestic producers total of 12,127 vehicles.

8. • During World War II, Toyota, Nissan, Isuzu
and Kurogane built trucks and motorcycles for the Imperial
Japanese Army, with Kurogane introducing the worlds first
mass-produced four-wheel-drive car, called the Kurogane
Type 95 in 1936. For the first decade after World War II,
auto production was limited, and until 1966 most production
consisted of trucks (including three-wheeled vehicles).
Thereafter passenger cars dominated the market. Japanese
car designs also continued to imitate or be derived from
European and American designs. Exports were very limited
in the 1950s, adding up to only 3.1% of the total passenger
car production of the decade.

9. • Japanese manufacturers producing very
affordable, reliable, and popular cars throughout
the 1990s, Japan became the largest car
producing nation in the world in 2000. However,
its market share has decreased slightly in recent
years, particularly due to old and new
competition from South Korea, China and India.
Nevertheless, Japan's car industry continues to
flourish, its market share has risen again, and in
the first quarter of 2008 Toyota surpassed
American General Motors to become the world's
largest car manufacturer. Today,

10. Japanese Automobile Industry
• : A Brief Review of Economic Relations of
Japan

11. Departing from U.S. Practices
• In the lean years following World War II, Japanese
managers were not sure how to accommodate
these changing market needs and the potential
export requirements of low-cost, high-quality
vehicles. Not surprisingly, many Japanese
managers, especially at Nissan, first believed that
the best way to compete in automobile
manufacturing was to continue to copy as closely
as possible the best techniques perfected at Ford,
GM, and other mass producers.

12. JUST-IN-TIME MANUFACTURING.
• 1950 at Toyota and in the mid-1950s at Nissan,
managers introduced the “just-in-time” (JIT)
concept for in-house production (or assembly)
and deliveries of components. This required
several departures from U.S. practices. Faster
setup times for machine tools and stamping
presses meant that each piece of equipment
could be used for different models or
components without long waiting times.

13. • Japan is currently the world’s 3rd (with an
annual production of 9.9 million automobiles
in 2012.) and 1st from 1980-1993 and 2006-
2008 the largest automobile manufacturer
and exporter and has sixth of the world’s ten
largest automobile manufacturers in ranking.
In addition to its massive automobile industry,

14. • The automotive industry in Japan rapidly
increased from the 1970s to the 1990s (when it
was oriented both for domestic use and world-
wide export) and in the 1980s and 1990s,
overtook the U.S. as the production leader with
up to 13 million cars per year manufactured and
significant exports. After massive ramp-up by
China in the 2000s and fluctuating U.S. output.
Japanese investments helped grew the auto
industry in many countries throughout the last
few decades.

15. .

16. • In recent years U.S. companies in a number of industries have
improved their competitive performance. In automobiles, U.S.
companies have responded to pressure from Japanese
competitors, and Japanese investments have contributed to
overall U.S. capabilities. In semiconductor manufacturing
equipment, a resurgence of the U.S. semiconductor device
industry and improved cooperation between companies and
with government have played major roles.

17. • Japanese companies are still
major competitors, and Japanese
government and industry are still
pursuing policies designed to
attain global technological and
market leadership. But changes
are occurring as well. Japanese
companies are more open to
reciprocal relationships. Japanese
markets are somewhat more
open, particularly in consumer
products.

18. • Besides being a significant contributor to the U.S.
and Japanese economies as the largest employer
among manufacturing sectors, the automobile
industry is increasingly a high-technology sector,
owing to its growing utilization of electronics,
advanced materials, and information systems. If
production and engineering systems are included
in the definition of "technology," it is clear that a
great deal of U.S.-Japan technological interaction
(competition, learning, technology transfer
through direct investment) has occurred over the
years and continues in this industry.

19. Market Access
• The competitiveness setbacks suffered by the U.S.
auto industry and the corresponding gains by
Japanese manufacturers during the 1970s and
1980s One advantage enjoyed by the Japanese
auto industry from the early postwar rebuilding
period is the asymmetry in market access between
Japan and other major auto producing and auto-
consuming countries, most notably the United
States. Japanese autos were making considerable
headway in the United States.

20. Japanese Industry Advantages
• The Japanese auto industry's gains during the 1970s
and 1980s
• The first advantage was in management
• General Motors and Ford were (and still are) the largest
manufacturing companies in the world Their
competitive environment during the post-World War II
period allowed them to focus on the lucrative U.S.
market and on each other as competitors competitive
environment that emerged in the U.S. market and
globally in the 1970s.

21. second advantage
• A second advantage enjoyed by Japanese
auto companies was in cost structure.
Lower Japanese labor costs relative to the
United States and the fact that wage
increases lagged behind productivity gains
gave Japanese auto companies a significant
edge by the late 1970s. The gap was
widened by a strengthening of the dollar in
the early 1980s.

22. Third advantage
• The rapid rise in oil prices during the 1970s led
to greater demand for small cars in the U.S.
market, which Japanese companies were
better equipped to fill. Simultaneous pressure
to meet new environmental standards and
increase fuel economy strained the
engineering capabilities of the Big Three and
contributed to declining quality and
performance.

23. U.S. Resurgence
• Over the past 15 years or so, the U.S. auto
industry has been engaged in the sometimes
slow and difficult effort of responding to
Japanese competition and closing these gaps,
Prompted by competitive pressure At the same
time, the Japanese auto industry suffered from
sluggish demand in the domestic market and
cost pressure on exports of vehicles and parts to
the United States. Most Japanese automakers
reported losses during this period. Some of the
second tier Japanese producers, such as Mazda,
have suffered a great deal during the downturn.

24. Japanese recovered
• More recently, the Japanese vehicle market
has recovered somewhat, the dollar
appreciated considerably during 1995 and
1996, and conditions for Japanese
automakers have stabilized and improved.
Even during the 1993-1994 period, Japanese
automakers as a whole did not lose a
significant amount of market share in the
United States, particularly in passenger cars.
Transplant production has played an
important role.

25. Future Technology and
Competitiveness Issues
• (1) continuous improvement in manufacturing and product
development performance to deliver value to customers.
• (2) achieving effective participation in emerging markets,
particularly in Asia, while balancing related technology and
production transfer demands.
• 3) companies and national industries may create
competitive advantage for the twenty-first century based
on new technologies such as "intelligent" vehicles and
highways.
The Japanese and U.S. auto industries, and individual
companies, bring different strengths to this competition.

26. Manufacturing and Product
Development
• High-quality manufacturing and effective product
development performance are fundamental competitive
necessities for auto manufacturers seeking to establish
and maintain leading positions in the most
sophisticated and profitable markets. Although the top
Japanese companies remain the world benchmarks in
these areas, U.S. companies have made considerable
strides in recent years. During the 1990s, for example,
Chrysler adapted a number of lessons from Japanese
"best practices" and improved its product development
process considerably.

27. In Canada.
• Japanese automakers Toyota, Nissan, and Honda,
among many others, have long been considered
the leaders at producing smaller, fuel-efficient
cars. Their vehicles were brought to the forefront,
due to the 1973 oil crisis which had a major
impact on the auto industry. For instance,
the Honda Civic was considered superior to
American competitors such as the Chevrolet
Vega and Ford Pinto. The Civic is the best-selling
car in Canada for 12 years in a row.

28. Japanese suppliers
• Although a number of U.S. auto manufacturers
and suppliers are pursuing continuous
improvements in manufacturing and product
development by adapting Japanese practices and
have achieved world-class performance, many
others, particularly smaller suppliers, have not
yet implemented these approaches successfully.
Recent studies indicate that Japanese auto
suppliers remain the most productive and deliver
the highest quality

29. Examples of Asian Parts Utilized by
Japanese Automakers in U.S.-Built
Vehicles
• Company Part Country
• Toyota Cylinder block Thailand
• Honda Cast and forged components China
• Mitsubishi Press components Korea
• Mazda Radiator Korea

30. Global Strategies and Approaches to
Rapidly Growing Asian Markets
• Tapping rapidly growing markets in Asia will be
key to future growth for U.S. and Japanese
automakers. Asia has long been a secondary
overseas market focus (after the United States) for
a number of Japanese auto companies. These
efforts have given Toyota, Mitsubishi, and others
a head start in several of the most important
markets. For example, Toyota hopes to build a
leadership position in the rapidly growing Asian
auto market through the development of its "Asia
car."

31. U.S. auto industry had "written off'
• Although it had appeared until recently that
most of the U.S. auto industry had "written off'
Asian markets besides China, the Big Three
and a number of major suppliers are now
pursuing more aggressive initiatives. With
trade barriers in Asia likely to fall in coming
years,

32. During 1995

34. • Automotive issues often dominate trade
discussions between trading partners and for good
reason. Due to the large economies of scale that
are required in this sector and the high value-
added nature of the goods and services that are
produced, the ability to design, engineer, and
manufacture an automobile is often viewed as a
crowning achievement for any economy. it has
continually been demonstrated there is an
“employment multiplier” of 9 or 10 jobs for every
auto manufacturing assembly job that exists with
a given market

35. Japanese Automotive Exports to U.S.:
1985-2011
AutoParts MotorVehicles
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
. Japanese manufacturers maintain a 95 percent share3 of their home
market largely due to a variety of factors that include long-standing non-
government, non-tariff barriers .

36. U.S Automotive Exports to Japan
AutoParts MotorVehicles
6,000
5,000
4,000
3,000
2,000
1,000
-
Japanese government to intervene in currency markets to keep the real value
of the yen at predictable levels, thereby keeping Japanese auto production
cost competitive. This can provide Japanese manufacturers with both a
stable planning horizon as well as a competitive advantage.

37. The Trans Pacific Partnership (TPP)
Agreement
• the effect of such tariff reductions almost always
leads to an increase in exports of the products
subject to tariff reversal. The possible FTA known
as the Trans Pacific Partnership (TPP), now being
negotiated between the U.S government and a
number of Pacific Rim nations would presumably
reduce tariffs on imported vehicles eventually to
a level of zero. Japanese vehicle imports into the
U.S market now face tariffs that range from 2.5 to
25.0 percent.

38. A Model of Japanese Vehicle Exports
to the U.S.
• The model forecasts Japanese vehicle exports to the
United States in nominal yen. The model controls for
such explanatory variables as the real yen-dollar
exchange rate, total light vehicle sales in the U.S
market, light vehicle production by the Detroit 3 in
North America, light duty vehicle production by
Japanese automakers in Japan, a special variable to
allow for the effects of the great recession of 2009 and
the great Japan earthquake in 2011, and the U.S
inflation rate. The final explanatory variable is a
reasonable proxy for the relative import price of
Japanese vehicle exports to the United States.

39. The Effect of a Changing Exchange
Rate
• Japanese light vehicle exports to the United
States. The essential findings show that
eliminating the 2.5 percent U.S motor vehicle
tariff will result in an increase in Japanese light
vehicle exports of 6.2 percent. Of course,
fluctuations in the yen/dollar exchange rate could
mask the effect of the elimination of the 2.5
percent tariff reduction or appear to magnify it in
a very short period of time because of the power
of the exchange rate to affect exports.

40. Behind Japan’s Success

41. • the postwar success of the Japanese
automakers is both an impressive and a
puzzling achievement. The success is obvious
and measurable; the reasons for it, far less so.
Seeking explanations. To it they ascribe a
continuous application of single-minded
energy; from it they expect a continual flow of
industrial.

42. Take Competitiveness Seriously
• One of these habits is to consider thoroughly a
proposed policy’s impact on the productivity
of Japanese industry, on Japan’s competitive
strength in the world market, and on Japan’s

43. untried Japanese manufacturers
• compete against the likes of GM, Ford, Fiat,
and Volkswagen. It has also been quite fearful
that a large automobile market in Japan would
provoke irresistible demands to open Japan to
foreign imports, the one thing it has been
determined to prevent.

44. ability to earn her way in the world
economy
• The more successful the Japanese automobile
industry. The automobile, it has pointed out,
requires the two raw materials that are in
shortest supply in Japan: petroleum and iron
ore. It also requires the diversion of scarce
resources, both food-growing land and capital,
to highways and highway construction. Instead
of an automobile industry,

46. 53-year-old S360 sports car concept,
signifying a definitive maturing of the
Japanese car industry

47. 1966 Corolla, the world’s biggest selling car,
an accolade the manufacturer picked up as early
as 1977 when it surpassed the VW Beetle’s
sales.

48. The Nissan stand featured four cars: the blue
Prince Skyline GT on the left, the red Prince R380-A at the front,
the silver colored original Nissan Skyline GT-R to the right and
the latest 2016 model year GT-R at the back. 50 years of history
in four cars!

49. Bibliography
• book.-Japan Technology and Competitiveness Trends in Key
Industries.
• websites-
• www.japanese auto industries.com
• www.usa auto industries.com