A Close Look into the Japanese Automotive Industry

The Japanese have been an authority in the automotive industry since the 1960s. Recognized as the top three country in the world’s automobile market when it comes to car manufacturing, Japan produced over 9 million vehicular units in 2016. Toyota, Honda, Mitsubishi, Nissan, Subaru, Mazda, and Lexus – these are just some of the globally recognized automobile brands that have won multiple awards throughout the years. Today, automotive manufacturing accounts for 89% of the country’s manufacturing sector.


The first automotive company in Japan was established in 1907 under the name of Hatsudoki Seizo Co., Ltd. It started its focus on three-wheeler trucks and steam engines and later on shifted to car manufacturing. Nissan followed 7 years later and Mitsubishi was founded soon after.

For four decades, Japan slowly built its manufacturing sector until it gained international recognition as a worthy competitor in the automobile industry. It started exporting its cars in the 60’s and surpassed Germany to be the third leading country in car manufacturing. The 70’s saw a rise in popularity of the Japanese cars with the British market. Towards the 80’s and 90’s, Japan has cemented its place to be one of the authorities of the automotive industry.

Economic Contribution

The motor vehicle industry is one of the most successful industries in Japan and has significant economic contributions to the country. The automotive industry in Japan accounts for over 5.5 million of employment in the country or around 8.7% of the national workforce. In 2010, automotive shipments from Japan totalled over 43 trillion yen accounting to 16.4% of Japan’s total manufacturing shipments.

The Leading Companies

Japan is home to six out of the top 10 vehicle manufacturers worldwide. The Toyota Motor Corporation is considered as the largest automotive manufacturer in the world and globally ranks as the ninth largest company in the world by revenue. Established in 1937 by Kiichiro Toyoda, it was the offspring of Toyota Industries, a Japanese machine maker, specifically founded for automobile production. Today there are a total of five brands produced by Toyota – Hino, Lexus, Ranz, Daihatsu, and the Toyota brand itself.  

Coming at second and third to Toyota are Nissan and Honda. Nissan is the leading Japanese brand in Russia, Mexico, and China. They are the largest manufacturer of electric vehicles in the world and are allied with Renault, a French multinational automobile manufacturer. Honda, on the other hand, was the first ever Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986. In 2013, they become the first Japanese car maker to be a net automobile supplier to the United States.

Industry Forecast

By placing a high value on research and development, Japan’s automotive industry is poised to continue being among the top vehicle companies in the world. Their commitment to innovation and high-quality production is unparalleled and their approach to continuous development is a great competitive advantage.   

Japanese cars have proven time and again that it can go head to head and maybe even surpass Western models. Over the course of a century, the Japanese mobile industry had made a remarkable progress that other countries can only try to emulate.