So we’ve seen what Chairman Akio Toyoda has been doing. What’s former Toyota CEO and AE86 owner Koji Sato been up to since he was replaced by a minivan-loving accountant earlier this year? Well, it turns out he’s calling on all of Japan’s seven carmakers to form like Voltron and work together against generational threats to Japan’s auto industry.
In his newly created role of Chief Industry Officer at Toyota and head of the industry-wide Japan Automobile Manufacturer’s Association, Sato wants Toyota, Subaru, Mazda, Suzuki, Honda, Nissan and Mitsubishi to join forces. According to Automotive News, Sato is beseeching all of Japan’s carmakers to come up with a “Japan standard” for fasteners, steel grades, plastics, and more.
Sato’s plan would only apply to aspects of the car that customers never see. There is currently too much complexity in the supply chain, he says, with too much manpower and money devoted to components with minor variations. Using wiring harnesses as an example, there are currently 70,000 different types being manufactured by Japan’s suppliers. Sato believes that the standardization of harnesses alone could improve productivity at the seven companies tenfold.
That would, in theory, free up resources so they could be put into the areas that customers do see and allow carmakers to focus on the areas that differentiate each company. This could benefit smaller companies like Mazda and Subaru, who don’t have Toyota’s economy of scale when negotiating with suppliers.
What’s prompting this unprecedented proposal? Sato didn’t say specifically, but cited “international competitiveness,” which likely refers to the new crop of electric vehicles from China that have seen rapid market growth in Europe, Australia, and Southeast Asia.
“We have a strong sense of crisis that the Japanese auto industry is in a massive period of transition,” Sato said. “Now is exactly the time to further develop and evolve with the challenges and reform initiatives that the auto industry as a whole must face.”
It’s likely that the other OEMs will follow Toyota’s lead. As Japan’s juggernaut and most successful brand, Toyota has the might to bring other companies in line. And it seemed that Sato was likely promoted out of the CEO position to take on this challenge he described as a “once-in-a-century period of transformation”. As the Automotive News article reported, earlier this year during a supplier meeting Sato was sounding the alarm, saying, “Unless things change, we will not survive.”
Images courtesy of Toyota.
2041
You: Hi. I need a 60 amp alternator.
NAPOreily: Year, model, engine & trim please.
You: 2029 Japan.
NAPOreily: 37 in stock. Just a second. I’ll be right back. Anything else?
NAPOreily. Brilliant, and sadly true.
This follows Marchione’s vision ten years ago -notwithstanding my obversations over 40 years prior, and makes complete sense.
This is like GM realizing they just need to axe their different companies from back in the day. Internal competition resulted in Buick, Pontiac, Oldsmobile, each offering essentially similar products, but ultimately succumbing to excess when the key was to streamline.
I think it’s a great idea to do some housecleaning on a country-wide scale, it’ll just take a lot of logistics and coordination to see which company will have to change more compared to the others.