Japan's Roots in the U.S. Automotive Industry Grow Deeper

The last post suggests that there are a number of ironies in transporting American management expertise to the German automotive industry given the Japanese leadership in the car business.  There is an interesting piece in the current issue of BusinessWeek entitled "Japan Takes a New Bite Out of Detroit" which suggests that the Japanese dominance of this industry runs deeper than one might see from the surface.

Despite Detroit's historic complaining about Japanese competition in their market space, it seems that even your American car is increasingly more than a little Japanese under the hood.   According to the BusinessWeek story, Japanese parts manufacturers, competing with the likes of Delphi and Visteon, have 25% of the $26 billion automotive parts market, with a significant percentage of those sales going to American car companies.  Aisin Seiko, an affiliate of Toyota, saw its sales in North America grow 37% to $2.4 billion with an estimated 45% of those sales going to companies other than Toyota.  Another Japanese supplier, Denso Corp., had $5.9 billion in North American sales and was GM's supplier of the year.

Of course it is getting harder to discern who is an American car company now that on the one hand Chrysler is owned by Daimler-Benz, and on the other Toyota has 11 U.S. manufacturing facilities spread over 7 different states.  Also, as argued in a previous post on Japan as an export market for U.S. goods, one reason that Japan is so successful at exporting to the U.S. is that they have created a value proposition that appeals to the tastes and preferences inherent in a fully developed market economy -- which is why U.S. companies can have success selling the other direction if they invest the time to explore the market opportunities.