Automobile industry in Japan

Japanese Automobile Industry

The Japanese automotive industry is one of the most prominent and largest industries in the world. Japan has been in the top three of the countries with most cars manufactured since the 1960s, surpassing Germany. The automotive industry in Japan rapidly increased from the 1970s to the 1990s (when it was oriented both for domestic use and worldwide export) and in the 1980s and 1990s, overtook the U.S. as the production leader with up to 13 million cars per year manufactured and significant exports. After massive ramp-up by China in the 2000s and fluctuating U.S. output, Japan is now usually the second or third largest automotive producer in the world with an annual production of 8-10 million automobiles. Japanese investments helped grew the auto industry in many countries throughout the last few decades.

Japanese zaibatsu (business conglomerates) began building their first automobiles in the middle to late 1910s. The companies went about this by either designing their own trucks (the market for passenger vehicles in Japan at the time was small), or partnering with a European brand to produce and sell their cars in Japan under license. Such examples of this are Isuzu partnering with Wolseley Motors (UK), and the Mitsubishi Model A, which was based upon the Fiat Tipo 3. The demand for domestic trucks was greatly increased by the Japanese military buildup before World War II, causing many Japanese manufacturers to break out of their shells and design their own vehicles. In 1970s Japan was the pioneer in robotics manufacturing of vehicles.

The country is home to a number of companies that produce cars, construction vehicles, motorcycles, ATVs, and engines. Japanese automotive manufacturers include Toyota, Honda, Daihatsu, Nissan, Suzuki, Mazda, Mitsubishi, Subaru, Isuzu, Kawasaki, Yamaha, and Mitsuoka.

Cars designed in Japan have won the European Car of the Year, International Car of the Year, and World Car of the Year awards many times.


Early years of Japanese auto industry

In 1904, Torao Yamaha produced the first domestically manufactured bus, which was powered by a steam engine. In 1907, Komanosuke Uchiyama produced the Takuri, the first entirely Japanese-made gasoline engine car. The Kunisue Automobile Works built the Kunisue in 1910, and the following year manufactured the Tokyo in cooperation with Tokyo Motor Vehicles Ltd. In 1911, Kwaishinsha Motorcar Works was established and later began manufacturing a car called the DAT. In 1920, Jitsuyo Jidosha Seizo Co., founded by William R. Gorham, began building the Gorham and later the Lila. The company merged with Kwaishinsha in 1926 to form the DAT Automobile Manufacturing Co. (later to evolve into Nissan Motors). From 1924 to 1927, Hakuyosha Ironworks Ltd. built the Otomo. Toyota, a textile manufacturer, began building cars in 1936. Most early vehicles, however, were trucks produced under military subsidy.

Cars built in Japan before World War II tended to be based on European or American models. The 1917 Mitsubishi Model A was based on the Fiat A3-3 design. (This model was considered to be the first mass-produced car in Japan, with 22 units produced.) In the 1930s, Nissan Motors’ cars were based on the Austin 7 and Graham-Paige designs, while the Toyota AA model was based on the Chrysler Airflow. Ohta built cars in the 1930s based on Ford models, while Chiyoda built a car resembling a 1935 Pontiac, and Sumida built a car similar to a LaSalle.

The Ford Motor Company of Japan was established in 1925 and a production plant was set up in Yokohama. General Motors established operations in Osaka in 1927. Chrysler also came to Japan and set up Kyoritsu Motors. Between 1925 and 1936, the United States Big Three automakers’ Japanese subsidiaries produced a total of 208,967 vehicles, compared to the domestic producers total of 12,127 vehicles. In 1936, the Japanese government passed the Automobile Manufacturing Industry Law, which was intended to promote the domestic auto industry and reduce foreign competition; ironically, this stopped the groundbreaking of an integrated Ford plant in Yokohama, modeled on Dagenham in England and intended to serve the Asian market, that would have established Japan as a major exporter. Instead by 1939, the foreign manufacturers had been forced out of Japan. Vehicle production was shifted in the late 1930s to truck production due to the Second Sino-Japanese War.

For the first decade after World War II, auto production was limited, and until 1966 most production consisted of trucks (including 3-wheel vehicles). Thereafter passenger cars dominated the market. Japanese car designs also continued to imitate or be derived from European and American designs.

1960 to 2013 industry moves

During the 1960s, Japanese automakers launched a bevy of new kei cars in their domestic market; scooters and motorcycles remained dominant, with sales of 1.47 million in 1960 versus a mere 36,000 kei cars. These tiny automobiles usually featured very small engines (under 360cc, but were sometimes fitted with engines of up to 600cc for export) to keep taxes much lower than larger cars. The average person in Japan was now able to afford an automobile, which boosted sales dramatically and jumpstarted the auto industry toward becoming what it is today. The first of this new era, actually launched in 1958, was the Subaru 360. It was known as the “Lady Beetle”, comparing its significance to the Volkswagen Beetle in Germany. Other significant models were the Suzuki Fronte, Mitsubishi Minica, Mazda Carol, and the Honda N360.

The keis were very minimalist motoring, however, much too small for most family car usage. The most popular economy car segment in the sixties was the 700-800 cc class, embodied by the Toyota Publica, Mitsubishi Colt 800, and the original Mazda Familia. By the end of the sixties, however, these (often two-stroke) cars were being replaced by full one-litre cars with four-stroke engines, a move which was spearheaded by Nissan’s 1966 Sunny. All other manufacturers quickly followed suit, except for Toyota who equipped their Corolla with a 1.1&bsp;litre engine – the extra 100 cc were heavily touted in period advertising. These small family cars took a bigger and bigger share of an already expanding market.

Rapidly increasing domestic demand and the expansion of Japanese car companies into foreign markets in the 1970s further accelerated growth. Passenger car exports rose from 100,000 in 1965 to 1,827,000 in 1975. Automobile production in Japan continued to increase rapidly after the 1970s, as Mitsubishi (as Dodge vehicles) and Honda began selling their vehicles in the US. Even more brands came to America and abroad during the 1970s, and by the 1980s, the Japanese manufacturers were gaining a major foothold in the US and world markets.

With Japanese manufacturers producing very affordable, reliable, and popular cars throughout the 1990s, Japan became the largest car producing nation in the world in 2000. However, its market share has decreased slightly in recent years, particularly due to old and new competition from South Korea, China and India. Nevertheless, Japan’s car industry continues to flourish, its market share has risen again, and in the first quarter of 2008 Toyota surpassed American General Motors to become the world’s largest car manufacturer. Today, Japan is the third largest automobile market and, until China recently overtook them, was the largest car producer in the world. Still, automobile export remains one of the country’s most profitable exports and is a cornerstone of recovery plan for the latest economic crisis.

Timeline of the Japanese car industry

  • 1907 – Hatsudoki Seizo Co., Ltd. established
  • 1911 – Kwaishinsha Motorcar Works established
  • 1917 – Mitsubishi Motors’ 1st car
  • 1918 – Isuzu’s 1st car
  • 1920-1925 – Gorham/Lila – auto production established (merged into Datsun)
  • 1924-1927 – Otomo built at the Hakuyosha Ironworks in Tokyo
  • 1931 – Mazda Mazdago – by Toyo Kogyo corp, later Mazda
  • 1934-1957 – Ohta begins auto production
  • 1936 – Toyota’s 1st car (Toyota AA)
  • 1952-1966 – Prince Motor Company (integrated into Nissan)
  • 1953-1967 – Hino Motors starts auto production (merged into Toyota)
  • 1954 – Subaru’s 1st car (Subaru P-1)
  • 1955 – Suzuki’s 1st car (Suzulight)
  • 1957 – Daihatsu’s 1st car (Daihatsu Midget)
  • 1963 – Honda’s 1st production car (Honda S500)
  • 1966 – One of the best selling cars of all time, the Toyota Corolla, is introduced
  • 1967 – Japan Automobile Manufacturers Association (JAMA) is founded
  • 1967 – Mazda Cosmo 110S was one of first two mass-produced cars with Wankel rotary engine
  • 1980 – Japan surpassed the United States and became first in auto manufacturing
  • 1981 – Voluntary Export Restraints from May limit exports to United States to 1.68 million cars per year, redundant by 1990 as production inside US displaces direct exports; similar policies in several EU countries.
  • 1982 – Honda Accord becomes the first Japanese car built in the United States
  • 1982 – Mitsuoka 1st car (BUBU shuttle 50)
  • 1983 – Holden and Nissan form a joint venture in Australia
  • 1984 – Toyota opens NUMMI, the first joint venture plant in the United States with General Motors
  • 1986 – Acura is launched in the US by Honda
  • 1988 – Daihatsu enters the US making it the first time all nine Japanese manufacturers are present
  • 1989 – Lexus is launched in the US by Toyota
  • 1989 – Infiniti is launched in the US by Nissan
  • 1989 – United Australian Automobile Industries (UAAI) founded in Australia as a joint venture between Toyota and Holden
  • 1991 – Mazda HR-X was one of the first hydrogen (combined with Wankel rotary) car
  • 1994 – Japan conceded to the United States back in auto manufacturing
  • 1996 – UAAI joint venture dissolved
  • 1997 – Toyota Prius was the first mass-produced hybrid car
  • 2003 – Scion is launched by Toyota
  • 2006 – Japan surpassed the United States and became first in auto manufacturing again
  • 2008 – Toyota surpassed General Motors to become the world’s largest car manufacturer
  • 2009 – Japan was beat by China and became second in auto manufacturing
  • 2010 – 2009–2010 Toyota vehicle recalls
  • 2011 – Tohoku earthquake affects production