The Risk of ‘Go-It-Alone’: The Japanese Car Industry — From Boom to Bust?

At the start of the 1990s, the Japanese car industry was an undisputed success story. Japanese ‘lean’ production practices were to be considered not only best-practice models for the car industry but also applicable to other industries as well (Womack et al., 1990; Womack and Jones, 1996). Only ten years later, at the start of the twenty-first century, the ‘model’ has lost most of its original radiance. Seven out of eleven firms experienced major problems throughout the 1990s and ultimately lost most of their independence to foreign owners — a unique phenomenon in postwar Japan. This chapter assesses the partial demise of the Japanese model from a political-economic perspective. The car industry has been one of the most ‘politicized’ of industries in Japan. Trade and restructuring policies have developed in close consultation (and dispute) with local and national governments. The car industry has been one of the most prominent carriers of the Japanese ‘export model’. The success or failure of strategies of individual car firms thus can hardly be separated from the success or failure of political strategies of governments.