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“Automotive Assembly Parts” The Japanese Market Report by JETRO

Throughout the era of high economic growth, the Japanese automobile parts industry grew consistently. However, the collapse of the bubble economy saw the industry enter a downturn, and with competition in the automobile industry intensifying worldwide, it now finds itself confronting a period of great upheaval. The transition engulfing the automobile parts manufacturing industry can be characterized as follows:

•  Production volumes in the parts manufacturing industry are declining as domestic demand for automobiles decreases,

•  Demands for price reductions are growing stronger,

•  As automobile manufacturers expand their overseas manufacturing operations, they demand that parts manufacturers have an overseas presence,

•  As automobile manufacturers seek to optimize their supply chains, they more readily conduct business with companies that do not belong to their conglomerates,

•  Environmentally friendly technology is supported,

•  Modularization is supported,

•  Competition is intensifying as foreign parts manufacturers enter the Japanese market.

In this changing business environment, the differences between Japanese parts manufacturers are being magnified. With companies increasingly willing to do business outside their conglomerates, foreign parts manufacturers are coming in and stirring up the Japanese market, and even eclipsing their Japanese counterparts.

At the same time, Japanese parts manufacturers are being forced to take on their foreign competitors, and are increasingly undertaking mergers with a view to forming companies that can supply integral systems. Hence, it is likely that the on-going shake-up in the automobile parts industry will continue.

This report does not cover all automobile parts, but specifically focuses on assembly parts for new automobiles. It covers the present structure of the market, relevant laws and regulations, and changes in business practices, as well as discussing prospects for the future.

The report also examines foreign parts manufacturers that have already entered the Japanese market and trends in the parts that they have brought to the market. In this way light is shed on the methods by which foreign parts manufacturers enter the Japanese market and the various related issues that arise. In addition, sectors of the market that show promise for the future are identified, and advice is offered to potential entrants.

This survey was carried out by the Yano Research Institute and the results have been collated by JETRO.

For a copy of the Japan Automotive Report by JETRO, click here.

Source: JETRO - GAI

For more information on the Japan Automotive Digest, click here.

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