Japanese growth may slow

Press, 1 March 1984, Page 20

Japanese growth may slow

The meteoric growth of the Japanese car industry from an annual production figure of 200,000 vehicles in 1958 to around 11 million last year could soon be stemmed, according to the Economist Intelligence Unit. Japanese car makers will be forced to follow Nissan’s lead and set up assembly plants abroad to enable Japan to maintain its current level of production, according to its report. It points out that the market share of fully assembled cars from Japan is now approaching a ceiling in North America and Western Europe and quotas or other forms of restriction on supply are likely to continue for the rest of this decade. Such restrictions could force the Japanese to invest more in assembly operations in protected areas, if they are to maintain or

enhance their current position, the report suggests. ■ One of the few remaining alternatives for expansion would be through joint production agreements, such as Nissan’s with Alfa Romeo or Honda’s with British Leyland. However, the report forecasts that any hopes of the . Japanese expanding their markets in Third World countries, like Indonesia, Brazil or even South Africa, could end by the mid-1980s as governments demand more local assembly in place of imports of built-up cars. Western vehicle manufacturers are now responding vigorously to meet the Japanese challenge, according to the report. By adopting certain elements of Japanese assembly operations, Western manufacturers should narrow the production gap, at the very least.