The automotive industry represents a significant portion of Japan's economy, representing 13 % of its total manufacturing output and 10 % of employment. 16 Japan is home to 11 automobile manufacturers consisting of: Toyota Motor Corp., Honda, Nissan, Mazda Motor Corp., Isuzu Motors, Ltd., Suzuki Motor Corp., and Fuji Heavy Industries, Ltd., and Daihatsu Motor Co. Each of these automakers have manufacturing operations in the U.S. except Suzuki and Daihatsu. However, Suzuki is part of a joint-venture with GM, which is located in Canada.
Japan is also the third leading producer of motor vehicles after the U.S. and the EU. The U.S. is the largest market for Japanese vehicle exports, however, automobile production has fluctuated downward over the last several years in Japan.17 Like the auto industries in the other regions, the industry has also experienced major restructuring, which is the a result of a downturn in domestic demand. Japanese automakers have responded to stagnate domestic economic conditions by reducing production capacity through plant closures, and have offered equity ownership to foreign automakers to receive financial and managerial assistance. GM has equity in Suzuki and Subaru and controlling interests in Isuzu; Ford has majority equity in Mazda; DaimlerChrysler has majority equity control in Mitsubishi; and Renault has controlling interests in Nissan.18
The Japanese automotive industry relies heavily on exports with imports making up a much smaller percentage of auto trade. German automaker imports account for the greatest percentage of imports at nearly 70 %.19 However, trade barriers on foreign automotive imports in Japan have often created problematic trade relations with U.S. automakers and U.S. trade policy officials.
