No longer can manufacturer/supplier relationships be measured in terms of corporate nationalities and reciprocal trade flows, according to William C. Duncan, General Director, Japan Automobile Manufacturers Association in today’s issue of Japan Auto Trends.
“Consideration must be given to the dynamics of new competition, technological exchange between companies and the increasing flow of direct investment between nations or risk regressing into the counterproductive rhetoric and ‘results-oriented’ formulas of the mid-1990s,” Duncan said.
Foreign parts and accessories are about five percent of the total sales in Japan and retail executives don’t expect that situation to change. However, the face of Japan’s auto parts supply is beginning to change with increasing evidence that foreign companies are playing a role through direct investment, marketing joint ventures and technological exchange with Japanese auto parts companies.
For example, joint ventures have included Goodyear Tire and Sumitomo Rubber; Robert Bosch and Zexel, a diesel fuel injection pump maker; Delphi Automotive and Akebono brake; and Valeo with Ichikoh Industries, a leading automotive supplier.
“These multinational auto parts companies seek to sell parts as original equipment to the Japanese vehicle manufacturers as well as to the replacement aftermarket. The market generally favors the investor in Japan,” Duncan added.
Ultimately, Japan’s vehicle manufacturers are more likely to rely on local suppliers, be they foreign or domestically owned. The locally based supplier is better able to meet the requirement of modern management technology, i.e. inventory control, rapid delivery and interface with the manufacturer during design and production.
In addition, Japan Auto Trends presents the globalization focus of Toyota’s Chairman Hiroshi Okuda who was recently elected as the new chairman of the Japan Automobile Manufacturers Association (JAMA). Mr. Okuda believes JAMA “should take a leadership role in promoting harmonization and world vehicle standards by contributing our know-how to the world.”
Japan Auto Trends quarterly Executive Highlight also features Katsuhiko Kawasoe, President of Mitsubishi Motors Corporation. Mr. Kawasoe, who became President in 1997, has been realigning the company’s business to improve profitability. In addition to internal measures, Mitsubishi has undertaken global and strategic tie-ups with Daimler-Chrysler in the passenger vehicle market and Volvo in the commercial truck and bus market.