Thursday, May 04, 2006

Japanese Auto Manufacturers vs the World

After seeing these two articles:
http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/206241/1/.html
http://www.channelnewsasia.com/stories/afp_world_business/view/206272/1/.html

Not surprising, but that a long overdue final confirmation of the decline of auto manufacturing in the US.

All is not rosy for the Japanese though. After trying to understand the Japanese for years, and still learning, my take on the Japanese auto industry is this: while cars are still customized bespoke products without a generic cross-industry platform and industry standard mechanical specification for building cars, yes, the Japanese are KING and will not be toppled by the Koreans or the Chinese. The Japanese actually do these things cheaper than anybody in the world - bespoke customized platformless things.

Once a industry platform arises (much like Windows is a platform for all computers) Japan will fall faster than a falling brick, replaced by China. The traditional understanding that the Japanese cannot innovate and do best in a standards based industry - eg. manufacturing fax machines - is to a large degree false. At the risk of gross oversimplification, the Japanese do innovate, and their edge over the rest of the world is their attention to detail. They do best in an industry of manufacturing products of bespoke design, without standards links to many other things outside the parameters of the product, and innovate within the rules of the game.

However, I'm fully convinced that nobody can make a platform besides the Americans, other nations' language capabilities, human resources, and most importantly, sales capability, are insufficiently well developed anywhere else in the world.

In short, ONLY the Americans can create GLOBAL platforms.

But GM, Ford and Daimlerchrysler will not make the platforms. They are too old school. A new force will have to arise, but it will be very unlikely looking at the state of the industry and the current American business attitude of short-term gain at the expense of long term planning.

So possibly Japan will forever be the world's best and most cost effective car manufacturer.

More discussion here:
http://forum.carma.com.sg/showthread.php?p=17539415#post17539415

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