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Japan’s auto industry began attracting attention overseas in the 1980s. Since then, Japanese cars have successfully made inroads into automobile markets around the world. Many studies have been done in Europe and the U.S. to discover why Japanese cars sell so well, and they concluded that the outstanding technology of automotive component manufacturers made a valuable contribution to the improvement of Japanese cars’ competitiveness, against a background of the Japanese-style supplier system—a unique production system not found in the West.
The completeness of the Japanese-style supplier system is clearly reflected in automakers’ outsourcing rates. In the 1980s, Japanese automakers sourced around 70% of components from outside suppliers, whereas the figure was below 55% for their US counterparts. European outsourcing rates were also similarly low. GM has recently followed the Japanese example by spinning off its component business, but its outsourcing rate is still low compared with that of Japanese automakers.
The Japanese-style supplier system is not superior in every respect, but it certainly contributed to the improvement of automotive suppliers’ technical capabilities, which became a factor underpinning the outstanding competitiveness of Japanese cars.
The three Sumitomo Group companies featured in this article all have world-class technology. Japanese automotive suppliers’ technology is now being enthusiastically embraced by automakers in Europe and the U.S. Looking ahead, the same kind of cutting-edge technology that propelled the development of Japanese cars will likely contribute to advances in automotive technology around the globe. |
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Sumitomo Wiring Systems’ wiring harnesses have a 12% share of the
world market. |
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