Auto Industry Leaders Address Seven Challenges They Face

Auto Industry Leaders Address Seven Challenges They Face

Japan Automobile Manufacturers Association (JAMA) Tackles Seven Major Challenges

In a press conference held on March 22, 2024, the new leadership team of the Japan Automobile Manufacturers Association (JAMA) announced their focus on addressing seven pressing issues in the Japanese automotive industry. These priorities were outlined last November and represent a comprehensive approach to confront multifaceted difficulties, including natural disaster recovery and logistics.

The new leadership, under Chairman Masanori Katayama (Isuzu), taking over from Akio Toyoda (Toyota) in January, has made it clear that they are determined to decisively address these key challenges. The seven issues JAMA is focusing on over the next two years are:

1. Reconstruction efforts following the Noto Peninsula Earthquake.
2. Addressing logistics challenges anticipated for 2024.
3. Enhancing production quality standards, such as those embodied by master artisans safeguarding vehicle finish and assembly precision.
4. Strengthening the supply chain resilience amid global uncertainties.
5. Promoting innovation aligned with environmental and sustainability goals.
6. Expanding domestic and global competitiveness through improved manufacturing practices.
7. Supporting collaboration among automakers, suppliers, and stakeholders to unify industry responses to complex challenges.

In addition to these challenges, JAMA has agreed that all member companies must take preventative measures, including urgent checks of legal compliance. The Japan Fair Trade Commission has asked JAMA to make examples of infringing conduct widely known to prevent future violations of the Subcontract Act. JAMA member companies have been named among businesses found to have left prices unchanged without consulting partners by the Fair Trade Commission. To address this, JAMA will ensure that all member companies explicitly consult with partners during price negotiations and adhere to guidelines for passing on shifting labor costs in pricing.

Chairman Katayama expressed condolences for the victims of the Noto Peninsula Earthquake that occurred on January 1. JAMA is working with national government ministries and local authorities to provide assistance in disaster-stricken areas.

Chairman Katayama is exploring ways to help solve issues related to the 2024 logistics problem through data collaboration and the use of autonomous driving. JAMA is collaborating with Keidanren's Committee on Mobility and various companies, as well as discussing with government officials to address the identified issues.

The commission also urged further improvements to transactions across the industry, including a revision of cost reduction requests to ensure compliance with laws and regulations related to future price shifts. The vice chairmen of JAMA have outlined their respective challenges and accompanying ambitions in their respective areas. They are working together to coordinate their efforts and speed up an all-Japan effort that extends beyond the auto industry.

Spring wage negotiations results have largely been finalized, with JAMA members sustaining wage increases above the average among large manufacturers. This move by JAMA member companies was in response to worker demands to raise wages to offset the cost of living.

Chairman Katayama was joined by six vice chairmen at the press conference. Together, they are committed to transforming the auto industry into a mobility industry, with enhancing value and efficiency in logistics, commerce, and mobility being the first priority. By addressing these pressing issues, JAMA aims to ensure a sustainable and resilient future for the Japanese automotive industry.

1. To address a complex challenge, JAMA is collaborating with Keidanren's Committee on Mobility and various companies to utilize autonomous driving and data collaboration to solve the 2024 logistics problem.
2. In an effort to ensure compliance with laws and regulations, JAMA will require all member companies to explicitly consult with partners during price negotiations and adhere to guidelines for passing on shifting labor costs in pricing.
3. The Japan Fair Trade Commission has urged JAMA to make examples of infringing conduct widely known to prevent future violations of the Subcontract Act and to revise cost reduction requests to ensure compliance with laws and regulations related to future price shifts.
4. In addition to the seven major challenges in the Japanese automotive industry, the new leadership team at JAMA has agreed that all member companies must take preventative measures, including urgent checks of legal compliance.

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