Japan’s Automotive Industry: Driving Us to the Future

If you ever walk in both the city of Tokyo and the greater outer Tokyo area, you will see an abundance of amazing and expensive cars. Since Japan is its advances in technology, it is not surprising that cars are becoming more connected and more futuristic. These high-performance cars have flourished since the 2000s, with companies such as Toyota, Honda, and Nissan as well as Mitsubishi, Mazda, Subaru, Nexus, etc. These companies have surprised many with their design and highly-developed vehicles, and it seems they won’t be stopping.

So what does the automotive industry look like today, and what will it look like in the future?

The Japanese Automotive Industry

The best Japanese automotive companies are known globally with their components being used on six continents. Before the pandemic, the total production value of motor vehicles in Japan was steadily increasing to a maximum of 20.85 trillion Japanese yen in 2019.

As a result, manufacturers invest more in human resources. As of 2021, according to Statista, employees in the automotive industry represent around 8.2% of the total Japanese workforce or 5.49 million people.

Since cars are becoming more complex and performant, supply chains have taken an important role for Japanese companies. 20,000 individual parts are provided by hundreds of different suppliers, many of them being located in foreign countries (and it can become a problem with the coronavirus). In Japan, maintaining a good relationship between two parties is essential. In the automotive industry in Japan, one of the main concerns is the relationship between suppliers and buyers, such as the Renault–Nissan–Mitsubishi Alliance. 

However, with globalization, this business loyalty has faded a bit. Japanese companies started working with foreigners instead of their usual suppliers because it is cheaper or to stay more competitive internationally.

Answers to Social & Environmental Issues

CeBIT is a digital business fair where product innovations were introduced in 2017. Toyota exhibited a car to increase the mobility of the elderly. Automation and ITS (Intelligent Transport System) will help Japan and its aging population, but also make futuristic cars affordable.

Other companies such as NEC have worked on facial recognition and AI to improve safety, which will be useful not only for cars but also for devices or other technologies. 

On another note: electric cars are getting popular in Japan. Not only it is better for the environment, but it is also cheaper (at least when charging it) and more silent than traditional ones. Not only do private individuals buy those cars, but many taxi companies use electric or hybrid cars too.

There’s also a new type of transportation being developed: hydrogen cars. In 2019, Toyota launched Mirai Fuel Cell Electric Vehicle powered by hydrogen. “Mirai” means “future” in Japanese, so this indicates that this is the car of the future. These cars only emit water since it is a chemical reaction between hydrogen and oxygen, which means it has zero CO2 emission.

However, in 2019, only 11,000 fuel cell vehicles were in circulation worldwide and Toyota produced only 10 cars a day in a small factory. The Japanese government wants to make hydrogen fuel cell buses available (around a hundred) and incite people to buy hydrogen-powered cars (via subsidies), hopefully by 2030 there will be more than 300 of Tokyo’s public buses will be Hydrogen-powered.