automotive & supplier automotive & supplier japan market ...the brake specialist works with...

Automotive

& Supplier

© G&S International Japan 2008. All rights reserved.

Partner in Japan

G&S International Japan

6-4-13 Soshigaya, Tokyo

Setagaya-ku 157-0072 Japan

Web www.gs-int-ltd.com

Automotive

& Supplier

Japan Market Reports 2008

Automotive

& Supplier


1) The Japanese car industry – Big in Japan? page 3

2) What drives the Japanese car? page 4

3) Level of industry output & main production places? page 5

4) Where are the main locations of the Japanese car industry? page 6

5) Automobile parts purchased from EU & U.S. – Big business? page 7

6) Distribution structure for automobile parts in Japan? page 8

7) What is the transaction flow for auto parts in Japan? page 9

8) Market Trends for Individual Assembly Parts? page 10

9) How have foreign parts makers entered the JP market in the past? page 11

10) Success stories market entry Japan page 12

11) Recent changes in the Japanese auto supplier industry? page 13

12) Few key points in regards to Japanese customers page 14

G&S International Japan services overview page 15

Contents

2

Automotive

& Supplier


The Japanese automotive industry ranks second in the world, closely behind that of the United

States and well ahead of those of other nations with over 10.9 million vehicles produced in

2007. Japanese automakers and parts manufacturers continue to develop many of the industry’s

most innovative features, presenting significant business opportunities for foreign firms with

applicable products and technologies.

Market Focus: Global Partnerships

Foreign companies entering the Japanese automotive market

will find a strong domestic consumer base that purchases some

6 million vehicles each year. In addition, Japanese automakers

produced 4.96 million vehicles for export in 2004. Foreign

companies in Japan not only benefit from strong domestic sales

and exports but also the ability to leverage the global reach of

Japanese automakers and parts manufacturers.

Furthermore, Japanese companies have broken away from the

practice of doing business with companies simply because they

are part of a close association of affiliated companies, or

keiretsu.

Instead, Japanese companies are optimizing their supply

networks by choosing to work with companies from around the

world that offer parts superior in cost, technology and quality.

J a p a n – t h e s e c o n d b i g g e s t a u t o m o t i v e m a r k e t w o r l d w i d e

3

Automotive

& Supplier


Intelligent Driving

Japanese automakers are integrating more telematics products and services into automobiles

to make driving more convenient and pleasurable, opening doors for innovative foreign companies.

Environment

A growing emphasis on environmental sustainability is generating opportunities for automotive

companies whose technologies help reduce the automobile’s impact on the environment.

Safety

Consumer demand for increased automotive safety features provides great opportunities for

foreign firms as Japan’s automotive manufacturers shift their focus from reducing damage

resulting from accidents to preventing the accidents all together.

Added Value

As more electronic and information device parts are Integrated into automobiles, foreign

companies in related fields can expect to find growing demand for their business in Japan.

4

Automotive

& Supplier


Japanese Car Maker's

main R&D locations

Japanese car

production, sales,

exports

Automobile Production of Top 5 Countries 2006

Known for their quality and innovation, Japanese

automakers continue to develop many of the industry’s

most advanced technologies that are later seen around the

world, presenting significant partnership opportunities for

foreign firms expanding to Japan to leverage Japan's

automotive industry and sell to the global market.

2007: “Japan’s car

industry is picking

up again!“

5

Source: JAMA

Automotive

& Supplier


The Japanese automotive industry ranks second in the world, closely behind that of the United States and

well ahead of those of other nations with over 10.9 million vehicles produced in 2007. Japanese

automakers and parts manufacturers continue to develop many of the industry’s most innovative

features, presenting significant business opportunities for foreign firms with applicable products and

technologies.

Manufacture of

Transportation

Equipment

(1)Aichi

(2)Gunma

(3)Shizuoka

(4)Mie

(5)Fukuoka

Motor vehicles parts

and accessories

(1) Aichi

(2) Shizuoka

(3) Gunma

(4) Kanagawa

(5) Saitama

Source: Ministry of

Economy, Trade and

Industry, 2006

TOKYO

6

Automotive

& Supplier


• Japan is No.1 purchasing industry for auto parts from the U.S. and EU

• the trend for foreign imports of quality car parts is stable and expected

to slightly increase over the next 5 years

• many foreign parts suppliers experience growing business globally, if

successful business can be made with Japanese car makers in Japan

• many Japanese auto-makers appreciate the high quality and innovative

solutions developed by foreign suppliers, especially from Germany

7

Automotive

& Supplier


Source: Ministry of Economy, Trade, and Industry

The structure of the automobile industry resembles a pyramid, with the automobile manufacturers at

its apex and the frame manufacturers who assemble the car bodies and the parts manufacturers

below. As many as 20 to 30 thousand parts are required to construct a single automobile; however,

automobile manufacturers only manufacture around 30% of these in-house, and the majority are

manufactured by automobile parts manufacturers.

8

Automotive

& Supplier

© G&S International Japan 2008. All rights reserved. 9

Automotive

& Supplier


• Radiators

• Piston Rings

• Wiring Harnesses

• Headlights

• Transmissions

• Wheels

• Shock Absorbers

• Disc pads

• Fuel tanks

• Seatbelts

• Navigation Systems

Besides many other interesting auto

part fields, a list-up of a few car

parts currently strong in demand by

Japan auto-makers >>>

10

Automotive

& Supplier


“Providing optimal products to

Japanese Automakers through

localization is important …”

“Building close relations with Japanese companies is one key

to succeeding around the world.”

The company enjoyed a 2% market share in Japan in its

first year of operation, and within four years hopes to see

its share climb to 10%. Mr. Yasuhiro Miyaji, who

succeeded Dr. Martius as president in August 2006, says

enthusiastically, "If we can ask our customers about all

their needs directly and respond to these needs,

(achieving 10%) is no fantasy."

The brake specialist works with

auto manufacturers around the world

TMD Friction (Germany) is

the market leader as a

manufacturer of automobile

disk brakes pad and drum

brake linings in Europe, and

one of largest makers of

these car parts in the world.

Product requirements for brake components and other TMD products vary by market. High

performance is a must in Europe, where drivers accept noisier braking as a tradeoff for the power

needed to brake at high speeds, while Japanese drivers demand cleaner, quieter performance from

their brakes. For Japanese auto manufacturers, who market automobiles in regions with different

needs, TMD, with its comprehensive expertise, is an attractive business partner. Japanese users can

now take advantage of TMD Friction Japan K.K. to improve quality and efficiency through unified

procurement of brake materials and systems for every market.

12

Automotive

& Supplier


Throughout the era of high economic growth, the Japanese automobile parts industry grew

consistently. However, the auto growth has slowed down globally, competition in the industry is

intensifying worldwide. The transition engulfing the automobile parts manufacturing industry in

Japan can be characterized as follows:

• As Japanese automobile manufacturers expand their overseas manufacturing operations, they

demand that parts manufacturers have an overseas presence (many smaller Japanese parts

makers can’t provide that > increase in demand in foreign suppliers)

• As automobile manufacturers seek to optimize their supply chains, they more readily conduct

business with companies that do not belong to their (Japanese) conglomerates

• Environmentally friendly technology & Modularizationis much supported in Japan

• Demands for price reductions is expected to growing stronger

• Competition is intensifying as more foreign parts manufacturers enter the Japanese market

13

Automotive

& Supplier


• Extreme focus on quality and on customer service (you will find the

biggest claim rate worldwide in Japan)

• Need to show long term committement to Japan

• Excellent distribution and service network a must

• Some adaption to the Japanese market often required

• Extreme need and request for technical information and

documentation

• Close and frequent communication to partner and customers

necessary to maintain well-working long-term relations

• Focus hard on hiring top people (a pool of very talented Japanese

are available if you screen carefully). Use recruiting agencies and

headhunters rather than printed or internet ads

• OK to take a premium price still, although the market is becoming

more competitive

14

Automotive

& Supplier


Japan Marketing Solutions

G&S International Japan are providing market entry and marketing/ sales for European

companies in Japan. The firm work with enterprises especially from Europe that do

object to start or expand their business operations in Japan.

Professional Japan Business Development:

• market research & marketing intelligence

• sales partner sourcing & partner negotiation

• marketing & direct sales

• logistics & import services

• e-commerce & web development

• start-up coordination & turn-around management

• HR recruiting & interim management

• firm representation & PR management

G&S

Please contact us for more details on the Japanese auto & supplier market!

G&S International Japan services overview

15

automotive & supplier automotive & supplier japan market ...the brake specialist works with...

Documents