The Japanese Automotive Supplier Report

Publication Date:	07-Nov-2019

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The bursting of the economic bubble in Japan in 1991 significantly impacted vehicle production, which has never returned to the pre-crash peak. Up until the 1990s, vehicle production in Japan had been growing at an annual rate of around 10%, peaking in 1990 with 13.4 million vehicles produced. This was followed by three years of decline in vehicle production and low single digit growth, with total production rebounding from a low of 9.7 million units to 11.5 million units.

The Lehman Crisis in 2008 was another shock to the Japanese economy, with vehicle production declining by 31%. Since then, vehicle production has hovered in between 9.2 million and 9.7 million units. There have also been domestic disasters that have led to production disruptions, such as the Great East Japan Earthquake in 2011, which led to the nuclear meltdown at Fukushima, major flooding in Hiroshima in 2018 led to production stops at four vehicle makers’ plants, and the numerous typhoons and earthquakes that have hit the southern island of Kyushu, where much of vehicle production is concentrated.

All these disasters created various levels of vehicle production and supply chain disruptions. With external factors also playing a role, such as the economic slowdown in key export markets and trade friction with major trading partners, vehicle production in Japan has remained below the 10 million mark since 2009.