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Japan is an island nation situated off the eastern seaboard of the Eurasian continent in the northern hemisphere. Its surface area totals approximately 380,000 square kilometres, a figure equivalent to 00.3% of the global landmass. The land is full of undulations, with mountainous regions including hilly terrain accounting for about three-quarters of its total area. Forestland and fields account for the largest portion of the nation's surface area. There are approximately 250,000 km2 of forestland and fields (which equates to 67% of the nation's surface area), followed by approximately 50,000 km2 of agricultural land (12%), and approximately 20,000 km2 of land for buildings (5%). Japan's total population in 2016 was 126.93 million. This ranked eleventh in the world and made up 1.7% of the world's total population. (Chino, 2017).

Japan has been one of the world's top three car manufacturing countries since the 1960's, securing its status as a world leader in automotive manufacturing and technology. Some of its most well-known global brands belong to the automotive industry. Automotive related manufacturing takes up 89 percent of the country's largest manufacturing sector, the transportation machine industry. Automotive components and vehicles account for 18 percent of all manufacturing shipments in Japan (Neely, 2016).

Domestic auto production has been steadily rising since 2012, in light of a weaker yen and a stronger global market for motor vehicles. This has led to extended expansion by Japan's major automakers and a smaller focus on selling in the home market. As vehicles have become more complex nowadays; consisting of over 20,000 individual parts, the industry has evolved into an integrated supply chain of companies. Parts from hundreds of suppliers are applied to each vehicle that comes off of the assembly line. (Neely, 2016).

As a result, an expansive network of auto parts suppliers has grown as a substantial part of Japan's economy, spanning across multiple industries such as chemicals and rubber. Investments in automotive technology research and manufacturing are considered a key barometer of the economy in Japan, and these suppliers are on the forefront of bringing that investment into production (Neely, 2016)

It is home to some of the world's largest automotive companies such as Toyota, Honda, Nissan, Suzuki, Mitsubishi, Isuzu, Mazda, and Subaru. The Japanese automotive industry is one of the most prominent and largest industries in the world. Japanese Zaibatsu (business conglomerates, the Big Four Zaibatsu in chronological order of founding, Sumitomo, Mitsui, Mitsubishi, and Yasuda are the most significant zaibatsu groups) began building their first automobiles in the middle to the 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 (lee, 2013)

Japan is among the world's largest and most technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles, processed foods. Whereby, as of February 2015, 2.9% of the labor force work in the agriculture industry, 26.2% work in the manufacturing industry, and 70.9% work in the service industry. (Central Intelligence Agency, n.d.)

Recent Economic Trends:

At the start of 2008, the Japanese economy faced with a standstill in its path to recovery as private consumption and investments in plant and equipment fell flat and so did production. The bankruptcy of the major American securities firm Lehman Brothers in September 2008, also affected Japan by the yen's rise and the sudden economic contraction in the USA and other countries. Declining exports largely contributed to a significant drop in production and a sharp rise in unemployment. Subsequently, the Japanese economy recovered with foreign demand and economic measures. However, the Great East Japan Earthquake that took place on March 11, 2011, and the nuclear power plant accident it caused weakened the economic recovery. (Chino, 2017)

In order to achieve an early end to deflation and break free of economic stagnation, in January 2013, the government set forth its "three-arrows" strategy, also known as "Abenomics". Whereby the first arrow is aggressive monetary policy, the second arrow is flexible fiscal policy and the third/last arrow is growth strategy that promotes private investment. Under such approaches, the profits of companies shifted at high levels, and the employment and income environment improved and continued a moderate recovery. (Chino, 2017)

The rising cost of safety and environmental regulations is also a concern for the industry. In the U.S., potential regulatory relaxation under the new administration has stirred at least some hope that higher costs associated with tightened emissions standards might arrive more slowly or even be avoided. (Parkin, Wilk, Hirsh & Singh, 2017)

Types of Cars:

Japan is widely known as one of the most technologically advanced countries in the world, and that can surely be seen through its cars. Japanese car brands are an exquisite breed of amazing and beautiful vehicles that can be seen all over the world. They spread tremendously because of their ease of use and interesting technology that is included in them, but also due to numerous other tiny aspects as well, such as body shape and fuel consumption. Some of the top Japanese car brands are Acura, Honda, Lexus, Daihatsu, Mazda, Mitsubishi, Nissan, Subaru, and Toyota. (Auto Car Brands, n.d.)

Cars can be divided into seven different categories, characterized by the method of use. The Hatchback is a car type with a rear door that opens upwards. They typically feature a four-door configuration, excluding the rear door. A Sedan is traditionally defined as a car with four doors and a typical boot/ trunk. A slightly technical detail is that it usually features a 3-box configuration with each of the boxes categorically used for the engine, passenger, and cargo. A multi-purpose vehicle (MPV) is commonly known as 'people carriers'. They are designed to offer enhanced space and comfort for passengers with two or three rows of seating and large doors. The third row on MPVs/ MUVs can generally be reconfigured. Sports utility vehicle (SUV) is a big car built on a body-on-frame chassis, sports increased ground clearance and offers off-roading capabilities to a certain extent. Crossover is a vehicle that combines the features of an SUV and a hatchback. Crossover vehicles offer soft-roading capabilities and are constructed like a car - they use uni-body construction instead of the body-on-frame platform used in SUVs. A Coupe is classically defined as a closed two-door car with a fixed roof. Considered sporty by nature, it generally gets just 2 seats or with a smaller-than-average rear. Lastly, a convertible is a car with a roof structure that can be 'converted' to allow open-air or enclosed driving. They feature either a retractable hardtop roof or soft folding top. (carandbike team, 2015)

Industry History:

Japanese automobile industry is one of the well-known and largest industries in the world. Japanese automakers always focus on product enhancement, technological innovation, and safety improvement, and by manufacturing vehicles that are reliable, safe and tough, Japanese makers are ruling the hearts of millions. The increase in demand for Japanese vehicles has increased the competition among vehicle manufacturers. (Japanese Car Trade, n.d.).

The first entirely Japanese made-car was manufactured by Komanosuke Uchiyama in 1907. In 1904, Torao Yamaha built the first Japanese-made bus, with the seating capacity of 10 people. After the end of World War I, large numbers of companies with the support of the government and the Imperial Army started manufacturing military trucks. That eventually results in the starting of automobile companies such as Toyota, Nissan and marks the beginning of Japanese automobile industry. Toyota Jido Shokki, a weaving company founded its automobile department in the 1933 and named it Toyota. In the same year, Nissan was established by a growing company named Nihon Sangyo. (Japanese Car Trade, n.d.).

During World War II, the automobile department of Japan was mainly in the production of military and industrial trucks, buses. After the WW II, Japanese companies were allowed to produce only a limited number of trucks. Toyota during that period lost almost all its assets and went bankrupt. During Korean War, contracts were given to the company for military vehicles and repairs. This helped Toyota to survive the crises. (Japanese Car Trade, n.d.).

During 1955, the production of cars by Japanese makers increases. At the same time, the restriction was imposed on the importation of vehicles by the government. Since the Japan's car market at that particular time was not very vast, thus many countries did not oppose the restriction. Under the guidance of the Ministry of International Trade and Industry, the Japanese automobile industry started to flourish. In 1953, the numbers of vehicles manufactured were 10,000, but the number reached to 20,000 in 1955. By the end of the 1950s, Japan began to export vehicles to different countries every year, but the number includes only few hundred. In the year 1961, for the very first time, the numbers of used cars exported achieved 10,000. And by `70, Japan started to export approximately a million of vehicles across many countries around the world. In the beginning of the export process, Japanese vehicles were not so popular, but eventually, due to their superb quality and low prices, these vehicles began to make their place. Consequently, the 1973 oil crises increased the popularity of Japanese cars in the global market as vehicles developed by them have a smaller engine and are fuel-efficient. (Japanese Car Trade, n.d.).

During 1970s popularity of Japanese vehicles increases in Britain and U.S. Mitsubishi and Honda were popular Japanese brands in the U.S. while in Britain, Nissan became a popular maker. During this period, the export of the car was really high. By manufacturing cost-effective and affordable vehicles, by the year 2000, Japan became one of the largest vehicle manufacturing nations across the world. Even though with the strong competition from South Korea, China, India, and many other countries, Japan car industry continued to thrive. (Japanese Car Trade, n.d.).

After the 1990s, during Japan's long recession period, the automobile industry continues to maintain its international competitiveness. This was due to Japanese automakers production approaches and development plans. (Japanese Car Trade, n.d.).

Japanese makers are leading in every aspect of automobiles, may it be technology, sales, production. Around six out of ten leading car makers in the world are Japanese makers. Toyota, Nissan, Honda, Suzuki, Mitsubishi are few popular Japanese car makers. Japanese automakers started from the very beginning to reach a place where they are. The major automaker, Toyota Motor Corporation started as a division of Toyota Automatic Loom Works for commercial weaving applications in Koromo. Later on, the company was hired by the Japanese government for manufacturing cost-effective cars for military purposes. For the past three decades, Toyota has manufactured 3 million units a year in Japan only. However, overseas production has grown to 5 million units annually from 200,000 units in the 1980s. Likewise, Nissan Motor Company Ltd, Mitsubishi, Suzuki and others are also major automobile producers in Japan. The Japan automobile industry is known across the world for its innovative ideas, attractive designs, quality and use of latest technologies. There is no doubt that Japanese vehicles are clearly leading in the race to capitalize on the automobile market of various countries. (Japanese Car Trade, n.d.).

Automobile production involves 5000 different and total more than 20,000 parts and components. Materials supplying, parts and components manufacturing are indispensable. At the same time, learning technical and managerial skills cannot just stay at the level of operation and maintenance. Production management and quality management must also be highly efficient. If production management and quality management have not achieved a satisfied level, it is impossible to make competitive products on a large scale. (Chengye & Gang, 2007)

Factor Conditions:

Japan has negligible mineral resources and fish, it has virtually no natural energy resources. Thus, making Japan the world's largest importer of coal and liquefied natural gas, as well as the second largest importer of oil. Additionally, 12.5% of the land is used for agriculture purposes – whereby 11.7% of that land is arable and 0.8% has permanent crops, 68.5% of the land is occupied by forests, and the remaining 19% is used for other purposes. (Central Intelligence Agency, n.d.)

During the 2015/2016 school year, Japan had the ninth highest population of students studying in the United States. Japanese students studying in institutions of higher learning in the United States accounted for 19,060 students and contributed more than USD 620 million to the U.S. economy through their expenditures on tuition and living expenses. The internationalization of Japanese education is one of the major priorities of the Japanese government. The Japanese government is promoting measures to facilitate study abroad participation from the viewpoint of global human resource development, vitalization of personnel interchanges with foreign universities, and globalization of the traditional insular Japanese society. There are potential opportunities for U.S. colleges and universities that can market attractive short-term program offerings to Japanese students. Showing direct benefit and connection to career success is key in encouraging students to make study in the United States decisions. Featuring successful alumni in marketing materials will also be effective, and all such materials should be in Japanese. With the announcement of the 2020 Olympics and Prime Minister Abe's commitment to double the number of bilateral exchanges between U.S. and Japan by 2020, interest in learning English has risen. In recruiting Japanese students, one must be perceptive of the fact that official English education commences later in Japan than in other Asian countries. Japanese students can start 3 to 4 years later than their Chinese and Korean counterparts. English education focuses more on grammar and reading, and one would be surprised at the average English proficiency skills of a new Japanese applicant. Universities with relaxed English proficiency requirements would be more attractive to Japanese students as an entrance point. (u.s. embassy, n.d.)

The latest survey showed that the nation's expenditure on education stood at 3.2 percent of the gross national product against the OECD average of 4.4 percent. The proportion was the highest in Denmark, at 6.3 percent, followed by Norway, at 6.1 percent, and Iceland, at 5.7 percent. The proportion of public financial support for higher education, such as universities, came to 34 percent in Japan, compared with the OECD average of 70 percent and the second-lowest after Britain's 28 percent. The survey also found that the proportion of Japanese women who were enrolled in science and technology departments at universities stood at 16 percent, the lowest among OECD countries. (Jiji, 2017)

Moreover, the basic outline of Japanese public-school education is outlined in a series of documents created by the Ministry of Education, Sports, Culture and Technology (MEXT). Most importantly is the Gakushū Shidō Yōryō, essentially a Handbook for Education that provides specific guidance to Japanese schools. The document determines such important topics as the subjects to be taught and the minimum number of hours to be spent on each subject at each grade level. MEXT implemented a number of reforms for compulsory education (through the completion of the third year of Junior High School, roughly 9th grade in the U.S. system). The three that have garnered the most attention are the reduction in the number of school hours, reduction of the number of hours devoted to academic subjects, and the creation of a course of “integrated studies.” The course in integrated studies was intended to allow schools the freedom to create a learning space outside the traditional bounds of the curriculum that would not be closely associated with entrance tests or tightly defined learning outcomes. With this freedom, the courses were to allow for greater choice, individualizing the courses to meet the individual goals of students in the upper grades, and allow for easier teaching about topics that worked across the curriculum, such as studying the natural environment, education for a global world, or studying “information technology.” Shortly after the implementation of the new curriculum, Japanese students declined in their achievement on international comparative tests. In response, a number of gradual changes were implemented designed to help improve the academic performance of Japanese students while maintaining some of the benefits of the earlier reforms. Key changes included a gradual increase in the required topics to be taught in the standard academic subjects, a gradual increase in the number of hours devoted to these subjects, and the implementation of national standardized testing at the end of the 6th and 9th grades in mathematics and Japanese for the first time starting in 2007. Teaching methods in Japan have also changed in recent years, but the changes have tended to be more gradual. Three dominant trends have been to increasingly emphasize literacy across the curriculum, place greater emphasis on quantitative reasoning skills and the ability to understand the concepts behind the numbers in mathematics, and integrating more “experiential learning” across the curriculum. (fish, 2012)

In addition to the Bank of Japan, Japan's financial system is comprised of private and public financial institutions. Private financial institutions include those that accept deposits (banks, credit depositories, agricultural cooperatives, etc.) and those that do not (securities companies, insurance companies, etc.). The fundamental role of the bank sector was to adjust the surplus and deficiency of funds, but as the corporate sector has been in a surplus in recent years in Japan, the percentage of loans to bank funds has been on a downward trend almost consistently. The decline in the percentage of national debt and increase in deposits in recent years are thought to be a result of the Bank of Japan buying national debt owned by banks due to the monetary easing policy. (Ministry of Internal Affairs and Communications Japan, 2017)

The advocacy of a fundamental change from the established corporate employment system to a market-based approach can be clearly seen in the actions of the Liberal Democratic Party government in Japan up to 2009. The government had actively promoted the relaxation of regulations on employment and compensation systems in order to realize the vision provided by the Japan Federation of Employers' Associations. With regard to employment specifically, while recognizing the importance of the country's lifetime employment system, the government promoted a combination of the continuation of the long-term system for a decreasing number of core employees and the adoption of more flexible forms of employment system for the rest of the workforce. This proposed a three-way segmentation of employees between core long-term employment, fixed-term specialists and flexible short-term contract labour, with further implications for the pay-and-promotion systems to be followed.  The government advocated the necessity of revising seniority-based payment systems such as periodic salary increases, the need to implement an evaluation of the occupational ability and job performance, and to relate the annual salary system to qualification. To these ends, there were a series of legislative changes since the burst of the bubble economy that relaxed employment regulation and promoted a more flexible, market-based approach. (Aoki, Delbridge, Endo, Delbridge, & Endo, 2011)

Demand Conditions:

Japan's rise to automotive pre-eminence was based on several key strengths, including focus, consistency and detail-oriented engineering. Japanese automakers were known for producing reliable cars with well-executed details. Japan systematically borrowed the best ideas from Britain, Germany and the US, while simultaneously addressing their weaknesses: Japan replaced Britain's flaky electrical systems with solid, well-engineered products from suppliers such as Nippondenso. Japan studied Germany's superb mechanical designs and installed them in cars that the average consumer could afford. And Japan borrowed the best parts of Detroit marketing – such as a tiered model system that encouraged buyers to spend more for essentially the same car – but lowered production costs by limiting the range of choices. (Cheney, 2015)

Japanese automakers logged record sales in the United States in 2015 as the overall market swelled to an unprecedented level, driven by the stronger economy and robust demand for sport utility vehicles and trucks. Manufacturers sold 17.47 million cars in 2015, up 5.7 percent from the year before. The figure broke the previous record of 17.40 million cars sold in 2000, according to the U.S. research company (Kyodo, 2016). Demand for vehicle ownership is shifting towards growing economies. There is room for expansion in developing markets, evidenced by the low figure of 124 vehicles per 1,000 persons in China in 2015, cited in the China Daily in 2016, as compared to 793 vehicles per 1,000 persons in the US in 2014, based on data from IHS Markit. Rising incomes in emerging markets will make this possible. Indeed, the International Organization of Motor Vehicle Manufacturers (OICA) reported that China represented 27.4% of all global automotive sales in 2015. (World Economic Forum, n.d.)

As shown in Fig.1, the total number of vehicles exported have decreased by 29% in the last 10 years, whereby the lowest total number of exports of vehicles was recorded in the year 2009, and the highest total number of exports of vehicles was recorded in the year 2008. Likewise, between those two years, the number of cars exported decreased from 5,915,429 to 3,208,639, the number of trucks exported decreased from 658,315,507, and the number of buses exported also decreased from 153,444 to 92,022 from 2008 to 2009. Indicating a decrease in car exports by 45.76%, a decrease in truck exports by 52.07%, and a decrease in the number of buses exported by 40.03. (Japan Automobile Manufacturers Association, Inc., 2017)

Additionally, we can see from Figs 2 and 3 that in the year 2016, in Asia, China imported the highest number of Japanese cars whereas Maldives imported the least; in the Middle East, UAE imported the highest number of Japanese cars whereas Tadzhik imported the least; in Europe, the U.K. imported the highest number of Japanese cars whereas Macedonia and Norway imported the least; in North America, the US imported the highest number of Japanese cars whereas Canada imported the least; in Central America, Mexico imported the highest number of Japanese cars whereas St. Vincent imported the least; in South America, Chile imported the highest number of Japanese cars whereas Guyana imported the least; in Africa, South Africa imported the highest number of Japanese cars whereas Mali imported the least; and in Oceania, Australia imported the highest number of Japanese cars whereas the Republic of Nauru imported the least. (Japan Automobile Manufacturers Association, Inc., 2017)

Moreover, Japan's exports grew 14 percent over a year earlier in October on strong demand for vehicles, electronics and machinery. Exports are helping to drive a moderate recovery in Japan, the world's third-largest economy, as its factories struggle to keep up with demand for cars, electronic components and manufacturing equipment. At the same time, Japan's imports have risen thanks to higher costs for crude oil and other commodities: surging 19 percent from the same month a year earlier in October to 6.41 trillion yen ($57 billion) versus exports of 6.7 trillion yen ($59 billion). The resulting surplus of 285.4 billion yen ($2.54 billion) compared with a 481.2 billion yen surplus a year earlier and 667.7 billion yen in September. Imports of crude oil, gas, coal and other fuels surged 37.5 percent from a year earlier to 1.24 trillion yen ($11 billion). Rising prices and the weakening of the Japanese yen over the past year contributed to that increase. (Kurtenbach, 2017)

Supporting Industries:

The automotive industry includes companies involved with the design, engineering, manufacturing, marketing and distribution of motor vehicles and motor vehicle parts, which include cars, light trucks, commercial vehicles, motorcycles as well as other forms of autonomous powered transportation. The production component of the industry is highly globalized and comprised of vehicle manufacturers (for example, General Motors, Toyota and Volkswagen) and several tiers of component and equipment suppliers (such as Robert Bosch, Denso and Magna International). The sales and distribution and servicing components of the industry consist of thousands of smaller, local companies. Some automotive companies are publicly-traded, some are state-owned, some are family-owned (or controlled), and some are a combination of the above. Demographic, market and digital trends are coming together to transform the automotive industry. The cycle of change begins with the connected and empowered consumer who is becoming more digitally conversant in all manner of electronic media. The consumers increasingly see the vehicle not only as an owned product but rather as a transportation experience integrated into a multi-modal mobility journey. (World Economic Forum, n.d.)

Moreover, although the establishment of Japanese machinery industry before World War II was rather slow compared to those of Europe and America. Especially since small and medium enterprises did not reach the level of producing modern industrial components. However, with high economic growth in the 1960s, Japan began to implement doubling income plan. Demand for automobiles moved from businesses to households while car production rate was raised compared to main commercial vehicle production. To improve the car mass production system, enterprises set up factories with an annual output of 200,000 units one after another and formally started mass production. While focusing on introducing technology and pursuing economic efficiency to keep up with the scale of the mass production system, automobile enterprises emphasized the effective integration of organization and technology as well as quality management at the factory level.  At the same time, Japan implemented the liberalization of trade and capital, leading to active cooperation and restructuring between enterprises. At first, Nissan merged with Prince. Toyota cooperated with Hino and Daihatsu, creating Toyota Group. Under the guidance of industrial policy of Ministry of International Trade and Industry, Japanese auto industry restructuring was carried out by individual enterprise's own management strategy.  The process that Japanese auto industry rapidly caught up with the technical level of Europe and America after World War II is characterized by the indigenous technology innovation one after another. After World War II, Japan invested heavily in pure technology introduction and further developed the introduced technology with respect to adaptability. Japan's R&D expenses exceeded equipment cost in1986. (Chengye & Gang, 2007)

Firm Strategy:

The most significant factor affecting the business environment in Japan is the immense population occupying a very limited space. In most Japanese offices, space is not subdivided into cubicles or individual rooms as is commonly practiced in Europe and the Americas. While generally, each person sits at an assigned spot, space is shared, often at long joint tables, with shared telephones and computers and with no individual walls. Crowding has also influenced Japanese commuting time, which is among the longest in time worldwide. This has also contributed to Japan's highly efficient mass transportation system, including the famous bullet trains. Other factors are also at play in the business environment besides crowding. To a large extent, Japan is devoid of most natural resources. It must import virtually all of its oil, gas, and other energy resources, driving the cost of energy to a level much higher than in most other industrialized nations. It is possible to argue that to some extent Japan's emphasis on quality control and human resource management directly result from the need to compensate in other areas for this lack of natural resources. (Victor, n.d.)

The traditional Japanese workplace is highly structured and hierarchical. While Japan itself is a remarkably uniform nation economically and with regard to social classes and offers considerable latitude for social advancement based on merit, the nation is not egalitarian in the same way that, for example, one finds in Canada or the United States. By contrast, most Japanese are highly conscious of relative rank and status within their organizations. (Victor, n.d.) 

There are a number of facets to the Japanese respect for and treatment of workers. One of the most prominent is lifetime employment. When many Japanese workers are hired for permanent positions in major industrial firms, they generally consider it as a job for life. However, this kind of benefit applies only to permanent workers, about one-third of the Japanese workforce. It is felt that if workers can stay with one firm for life, they more easily identify with the firm's goals and objectives. Japanese unions tend to share the management's view. The better the company performs, the more the worker benefits. As a result, Japanese management believes in giving the workers more opportunity to expand their job boundaries rather than waiting until the worker proves himself. The Japanese also spend more on education and training, for all levels, than any other industrial nation. Also, because the Japanese believe that robots free people for more important tasks, they have invested heavily in robotics and automated equipment, making theirs perhaps the most automated manufacturing sector in the world. Finally, the Japanese believe in what they call "bottom round" management. This concept, sometimes called consensus management or committee management, is an innate part of Japanese culture. It involves a slow decision-making process that attempts to reach a true consensus rather than a compromise, and while the decision-making process is slow, the implementation process is quite fast. (Inman & Victor, n.d.)


The act of rivalry involves a monitoring of the competitor's actions, an attempt to neutralize whatever advantage the competitor possesses and an intense focus on defeating the competitor. A healthy level of rivalry is presumed to be innovative and focus on satisfying customers as it generates customer satisfaction through differentiated products and rapid adoption of new technology as firms try to stay ahead of their competition. However, when one competitor tries to imitate or counter every move that the other makes, healthy turns “excessive”. Excessive rivalry reduces incentives to engage in innovative activities and favors companies with strong financial resources or ability to cross-subsidize a weak product from protected cash cows. The concept of “excessive rivalry” is very common against domestic Japanese competition. While they generally approve of the innovation gains from rivalry, MITI bureaucrats, company managers, and Japanese newspapers regularly attribute low-profit performance to intense competition. (Hansenns & Johanson, 1991)


In over 100 years history of Japanese automobile, Japanese companies have been always the pioneer of new emergent technologies. The first to introduce the robotics manufacturing in car production was Japan. Moreover, Hybrid car technology and Electric Car technology were both pioneered by Japanese car companies. Therefore, Japanese cars are well-known for its high-tech brand image as it has high reliability with low malfunction rate. Japan is home to many of the world's well-known car brands such as Toyota, Honda, Nissan, Suzuki, Mitsubishi, Mazda, Lexus, Infiniti, Datsun, Hino, Daihatsu, Isuzu, and Subaru. (Encyclopedia Japan, n.d.)

Several conditions have fostered the initial growth of the automotive industry in Japan. A number of factors production (capital, skilled and unskilled labour) were locally available. An imitation effect led to a flood of entries.

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