Toyota CEO Koji Sato, who also chairs the Japan Automobile Manufacturers Association (JAMA), has issued a stark warning to Japanese automakers: "Unless things change, we will not survive." He emphasizes that the industry is undergoing a massive transformation and must rethink its approach to design, procurement, and production to remain competitive. Sato's proposed solution involves increased cooperation among major Japanese brands, including Toyota, Nissan, Honda, Mazda, Subaru, Mitsubishi, and Suzuki, to establish shared standards for common components like electrical wiring, steel, and plastics.
Currently, Japanese suppliers produce approximately 70,000 different wiring harness variations across these brands, leading to inefficiencies and increased costs. Sato believes that standardizing these basic components, which are often invisible to consumers, could dramatically increase productivity, potentially by more than tenfold, and free up resources for innovation in areas like batteries, software, and advanced driver assistance systems. This strategy aims to create "areas of cooperation" for cost-saving without sacrificing the "areas of competition" that define each brand's unique identity.
The urgency for this collaboration stems from the rapid advancements and competitive pressure from Chinese automakers. Chinese brands have shown remarkable speed in developing new technologies and bringing models to market. In May 2026, Chinese groups surpassed Japanese manufacturers in European sales for the first time, and Japanese brands have also seen sales decline in their traditionally strong markets like China, Southeast Asia, and Australia. While not solely a defensive move against China, Sato acknowledges the need for Japan to learn from their speed.
Beyond component standardization, the JAMA-backed plan includes initiatives to streamline logistics, secure access to strategic raw materials, bolster recycling efforts, and develop infrastructure for autonomous driving. Sato also advocates for simplifying Japan's automotive tax system. While the implementation of common specifications will take time, potentially one to two years for initial agreements, and requires retooling by suppliers and alignment on safety requirements, successful cooperation could lead to reduced supply delays, lower development costs, and faster introduction of new vehicle features, especially electric ones. However, critics note that this could lead to a reliance on Toyota's specifications and potentially reduce supplier competition.
