The future direction of Japanese automotive suppliers

Abstract

Due to the downturn in the domestic economy and intense global competition with European and American automakers, the Japanese automotive industry has been forced to undergo rapid changes in recent years. The changing environment of the Japanese automotive industry, including intense competition, changing market trends, globalization, alliances with American and European automakers, increasing needs for advanced vehicle technology, the move to modularization, and the breakdown of the traditional Keiretsu has dramatically changed the purchasing policies of automakers. It is essential that suppliers respond to these changes in order to survive, maintain, and expand their businesses in the 21st century. This thesis analyzes the changes in purchasing policies among major Japanese automakers, based on automakers' expectations that suppliers will meet the following conditions: 1. continuous quality improvement; 2. continuous cost reduction; 3. optimum global purchasing; 4. environment-responsive products and advanced technology; 5. modularization and systemization programs. Successful suppliers will achieve these conditions by strengthening their core competence and by reinforcing their weak points by means of strategic alliances with other companies.