Industrial Collaboration with Japan by Turner Louis;

Author:Turner, Louis;
Language: eng
Format: epub
Tags: Economics, Finance, Business & Industry
Publisher: Taylor & Francis Group
Published: 2010-09-07T00:00:00+00:00

Conclusions

The automotive sector contrasts with consumer electronics in that Japan’s success so far rests less on genuine innovation than on its ability to produce competently designed products at prices which non-Japanese producers are unable to match. One of the lessons from the NUMMI venture is that the collaboration’s success had less to do with advanced automation than with Toyota’s superlative production management.

The automotive sector also illustrates a wider range of genuinely collaborative ventures than the other sectors under consideration. It does not just contain Japanese greenfield investments and some collaborations with foreign partners giving the Japanese access to their markets; it also includes ventures whereby non-Japanese companies have taken major equity stakes in Japanese concerns, and production arrangements in Japan for such companies as VW and the Austin-Rover Group. The range of these collaborations suggests that the sheer size and political visibility of this sector has made it special. The exertion of political pressure on the Japanese partners— both in Japan and at the non-Japanese end—is much more in evidence in the automotive sector than in consumer electronics.

The benefits of collaboration to the Japanese automotive companies have varied over time and according to the strength of the companies concerned, The smaller ones obtained financial support from larger American companies in the mid-1970s. Now, following a period in which the balance of advantages swung in favour of the Japanese, the financial strength of the American companies may be re-emerging as a major factor, given the rise in the value of the yen. The larger Japanese companies have used foreign collaborations to reduce the risks involved in establishing themselves overseas. At the same time, they have gained some direct experience of foreign luxury car design and have strengthened their knowledge in certain specialist areas. However, access to markets has clearly been the major advantage of their collaborations.

It seems that in general Japanese managements have handled their overseas operations effectively. This is certainly true of their US activities, although elsewhere, for example in Italy, there are signs that, like other company managements, they can make mistakes. They now have to demonstrate that they are capable of handling labour relations in this traditionally unionized industry over a significant period of time.

The most serious challenge to the Japanese, however, comes from the fact that the automotive industry is entering a particularly fluid stage with respect to corporate relationships. Some of the current arrangements, such as NUMMI, are recognized as being temporary, limited alliances. However, companies such as Nissan and Honda may well have to decide what to do with second-ranking foreign collaborators. Should they, for example, be acquired, or jettisoned in favour of partners likely to bring more lasting benefits? There are signs that the Japanese do not yet give enough priority to such questions. As a result, they could lose out to more alert international operators—as Toyota did to GM in the case of Lotus, and Honda came close to doing when the UK government sought American solutions to the problems of the Austin-Rover Group.

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