The Future of Mobility (Automobiles): Strategic Pathways for Japanese OEMs in an Era of Declining Private Vehicle Ownership

The term 'automotive industry' readily calls to mind automakers such as Toyota Motor Corporation and Honda Motor Co., Ltd (hereinafter, “OEMs”). As this suggests, the automotive industry has grown with OEMs—responsible for vehicle manufacturing and sales—at its center. In fact, when domestic automotive-related industry revenues are divided into the manufacturing/sales phase and the usage phase, roughly 70% is accounted for by the manufacturing/sales phase, it is fair to conclude that OEMs constitute the core of the automotive industry.

Toyota Motor Corporation, which commands the world’s highest unit sales, has long been recognized globally as “TOYOTA,” and the businesses of Japanese OEMs are not merely central to the automotive industry— they stand as a hallmark of Japan's industrial prowess on the world stage.

For that reason, thinking about the future of the automotive industry is, in many ways, equivalent to thinking about the future of OEMs. At the very least, it is no exaggeration to say that it is impossible to discuss the future of the industry without considering OEMs.

So, how will OEMs change going forward?

For example, one of the most prominent recent topics surrounding OEMs has been intensifying sales competition in the global market with emerging EV players, particularly from China. However, sales competition is not a new topic that emerged only yesterday; even before China’s rise, it had long been central to discussions about OEMs.

Will sales competition of this nature indefinitely define the central discourse? More precisely: will the manufacturing-and-sales business conducted by OEMs continue to remain the core of the automotive industry in the future?

This paper takes a skeptical view of the sustainability of the manufacturing-and-sales model as the industry's organizing principle. Central to this argument is the observation that...