Japanese Automobile Manufacturers

Running head: ASIA PACIFIC MULTINATIONALS
Japanese Automobile Manufacturers
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1ASIA PACIFIC MULTINATIONALS
Since 1960 Japan has been within the world’s top 3 largest car making counties, in the
technology and the automobile manufacturing Japan has secured a status of being a world leader.
Some of the most well-known brands that have a global fame are Lexus, Mazda, Subaru,
Mitsubishi, Nissan, Honda and Toyota. These brands are the most famous and are the major car
exporters. The important part is that Japanese automobile components are found to be
manufactured in over 6 continents. 89 percent of the automotive related manufacturing
contributes to Japan’s largest manufacturing sector. Vehicles and the automotive components
amount to 18 percent of all the manufacturing related shipments in Japan (Japan Automobile
Manufacturers Association 2018a). This study is based on the extent to which the Japanese
automobile manufacturers have been able to retain the competitive position as the multinationals
in the international markets.
History of Japanese automotive industry- In the year 1907, Komanusuke Uchiyama
manufactured the first true Japanese car. Torao Yamaha, in the year 1904 built the first bus in
Japan which had a seating capacity of 10 people. Large number of companies along with the
support of the Imperial Army and Japanese government started the manufacture of military
trucks just after the end of World War I (Koichi and Barker 2014). This venture eventually led to
the foundation of automobile companies like Nissan, Toyota. This eventually led to the
beginning of automobile industry in Japan. In the year 1933 a weaving company called Toyota
Jido Shokki founded an automobile department and named it as Toyota. Nissan also developed a
growing company and named it as Nihon Sangyo in the same year. During the period of World
War II, Japanese automobile industry was mainly producing industrial truck, buses and as well as
military trucks. Whereas, after the World War II the Japanese automobile companies where
allowed to make limited number of trucks. At that time Toyota lost all its money and became

2ASIA PACIFIC MULTINATIONALS
bankrupt. The company Toyota however revived from the losses during the Korean War. It was
given contracts for the manufacture of military vehicles and its repairs (Toyota 2018).
In the year 1955 the manufacture of Japanese car increased. Restrictions imposed by the
government on the import of vehicles. At that moment Japanese car market was not large and
that it was not opposed internationally. In the year 1953 number of vehicles manufactured where
10000 and it's doubled in the year 1953. During the 70’s Japanese automobile were not popular,
however due to low price and superb quality the vehicles slowly grabbed attention (Koichi and
Barker 2014). In the year 1973 due to the oil crisis the popularity of the Japanese automobiles
reached the pinnacle due to fuel efficient and small engine. During the year 1970, in US and
Britain the popularity of Japanese automobile increased. Nissan was a popular brand in Britain,
while Honda and Mitsubishi where the popular brands in US. During this period, the export of
the Japanese automobiles reached to great heights. By the year 2000, Japan became one of the
largest manufacturers of automobiles due to affordable and cost-effective manufacturing. Even
though the Japanese car industry was facing fierce competition from countries like India, China,
South Korea still the car industry continued to thrive (Picken 2016).
Japan’s Automobile industry (latest developments) - An automobile typically consists of
20 thousand to 30 thousand parts which is impossible for even the largest automobile
manufacturer to produce themselves. Thus, the automakers either purchase the final products or
outsource them. These components include audio systems, air conditioners, batteries and tires.
The finished products which were purchased by the automobile manufacturers include the
products which were manufactured in different countries and the volume of purchase of the final
products increases every year. Thus, automobile manufacturing can be considered as an
integrated industry and the investments in the research activities, components are marked as an