Remembering ‘The Golden Age’ of the Japanese automobile industry

In the 1980s and 1990s, the Japanese automobile industry experienced its most progressive years, earning the moniker “The Golden Age.” Back then, Japan manufactured some of the deemed world’s most significant automobiles of all time.

Celica, Supra, RX-7, NSX, Skyline, and other 80s drift cars were at the height of their popularity. Classic Japanese sports cars back then are fast and aesthetically pleasing in the eyes of the masses of the said era.

Although, the golden age has become a fleeting past, it’s certainly not a forgotten period. It help paved the way for Japan to achieve its position as one of today’s leading global automobile leaders.

The development from Zaibatsu to Keiretsu

Before World War II (WWII), the Japanese automobile industry’s manufacturing capability was being steered by dynastic corporate groups that leads the whole industry. They are the “Zaibatsu,” or wealth cliques.

Holding firms with interlocking directorships and mutual stockholdings were the backbone of the Zaibatsu’s structure. They have huge financial strength, which greatly affected Japan’s economy.

They’ve aided in boosting the efficiency of the country’s nascent manufacturing sector, including the automobile industry, through collaborations. In turn, Japan amassed enough riches to emerge into a fully functional capitalist nation.

After WWII, the Japanese automobile industry, which was intertwined with the Zaibatsu system, was reorganized into vertical Keiretsus. Unlike the Zaibatsus, the Keiretsus did not function as a centralized banking trust held by a single family. 

Kereitsu is a network of businesses and supply chain stakeholders. It encourages members to work closely together to lower costs and reduce competition for inputs, all with an eye toward long-term planning. In this sense, vertical keiretsu focuses on partnerships.

The Japanese have developed a close level of collaboration, to outcompete international automakers. Such was seen as a way of leading the supply chain of manufacturing automobiles.

Noteworthy Japanese classic cars

The automotive industry was irrevocably revolutionized by the golden period of Japanese luxury and performance. In 1989, the world saw the introduction of many Japanese classic cars. Of these, there are those being patronized by the new generation due to their good performance.

“A conspicuous number of people in their 20s and 30s are using this service, inspired by their parents who are fans of Japanese classics and themselves finding a refreshing surprise in how well these classic cars handle,”

shared in an article by The Yomiuri Shimbun, one of the five leading newspapers in Japan.

Some of the said classics are the Acura NSX, Mazda MX-5 Miata, and Nissan 300ZX. The first two are still in production with new innovative features. Meanwhile, the Nissan 300ZX went off production in 2000 but are now available from certain direct sellers.

The Honda NSX, or Acura NSX, was first shown at the 1989 Chicago Auto Show before it finally hit the Japanese automobile market in 1990. And although capable of clocking an impressive 0-60 mph sprint in about 5.5 seconds, the real success of the NSX was its then top-shelf performance.

Meanwhile, the Mazda MX-5 Miata was a convertible sports vehicle that was also for daily use. It was a compact rear-wheel-drive roadster that showcases duality.  In 1990, the MX-5 Miata won the inaugural Automobile of the Year award.

The Nissan 300ZX Turbo arrived on the market with a brand-new platform, engine, and performance-oriented mission in 1989. A unique twin-turbocharged 3.0-liter V-6 engine powers it. It has 300 horsepower.

On the side,  hybrid electric vehicles (HEVs) also gained momentum in the golden era. Way back in 1997, the first generation of the Toyota Prius went out. It’s the world’s first mass-produced hybrid passenger automobile, hailed from Japan.

“We don’t have any doubt that 100 percent electric vehicles are going to be a significant solution in the future,”

Toyota executive vice president Didier Leroy said in an expo.

Said car’s commercial success enticed other automakers to introduce their own hybrid models. Honda EV Plus was the first battery EV by a major automaker that doesn’t employ lead-acid batteries.

Only about 340 EV Plus versions were available to the public. Then, Honda announced the debut of the Honda Insight, the company’s first HEV, in 1999.

The present

Currently, Japan is the world’s fourth-largest vehicle market.  Toyota, Honda, and Nissan are the “Big Three” of the auto industry in Japan. Mitsubishi, Daihatsu, Mazda, Subaru, Isuzu, and Lexus were some of the other Japanese auto brands.

The country is also among the world’s largest car exporters. As of the year 2020, Japan shipped $83.1B worth of cars, making it the world’s second-largest exporter of automobiles. In the same year, automobiles topped the list of Japanese exports. The United States, Australia, China, Saudi Arabia, and Russia were the top five destinations for vehicle exports in December 2022.

Notably, the Japanese automobile industry’s popularity is partly attributable to the country’s reputation for innovation. Also, Japanese automakers have continued to adopt and refine the principles of the Toyota Production System, such as just-in-time inventory management, continuous improvement, and waste reduction.

These technologies have helped Japanese automakers to improve production efficiency, reduce labor costs, and enhance product quality. 

Another attributable factor to the market’s growth is the ushering of renewable green technologies and electric car development. Japan is among the 16 member nations of the Electric Vehicles Initiative (EVI). The EVI aims to hasten the spread of EVs around the globe by ushering in a forum for government policymakers.

“In an effort to make the country carbon neutral by the year 2050, the government has set some ambitious goals, “

Yukari Takamura, a professor at the University of Tokyo, said.

Looking ahead

Fast forward to 2021,  approximately 1.43 million hybrid vehicles had been registered in Japan. Despite the shift towards modernization, the golden era undeniably helped usher the Japanese automobile industry into a lucrative progressive market. The golden age is a time of rapid development with noteworthy practices and innovations.

Chinese and Western automakers now control around ninety percent of the worldwide electric-vehicle industry. While their Japanese counterparts, who similarly dominated a decade ago, have plummeted to less than 5 percent.

Because of the high price of EV batteries, Japanese automakers considered hybrids a more cost-effective method for selling low-carbon vehicles. Charging electric vehicle batteries with electricity from coal-fired Japanese power plants was perceived as unlikely to result in net carbon savings due to Japan’s slower adoption of renewable energy compared to Europe.

However, Japan’s share of the worldwide vehicle market is far smaller. The country risks falling behind international trends if automakers design hybrids solely for domestic consumption.

Another challenge is Japan’s aging population, which is causing a decline in its workforce. One, in which the advancement of robots and artificial intelligence are possible solutions based on an article from the International Monetary Fund. Japan’s population may continue to decline in the future. The estimation is around 24 million until 2050.

However, machines will always need intervention from humans for maintenance, programming, and other relevant work. Therefore, Japan needs to find and hone talents that are ready for the future economy.

It is a must for Japan to involve people, especially the younger generation, who will help circumvent their dilemma through the continuity of the labor force.  Whether the golden years of the Japanese automobile industry happen again or not would rely on their approaches to mitigate and progress their labor force.