Paper short abstract:

This paper investigates quality inspection/improvement efforts of foreign-affiliated car importers in Japan and challenges concerning the growing electric car and IoT market. These findings will help to better understand the global value chains and future implications in one of Japan's key markets.

Paper long abstract:

Over the decades, car importers in Japan have been playing an important role in the internationalization of Japanese trading by acting as intermediaries between the business and consumer needs of Japanese and foreign interests. This market has been growing, and Japan imported over 300,000 cars in 2017 for the first time in two decades. While foreign cars have been typically regarded as more expensive and premium than their domestic counterparts and therefore have been targeting the wealthy, companies have started attracting more medium-income earners and providing new-generation models including electric and hybrid vehicles with a broadened model lineup to meet the diversifying lifestyles and needs of Japanese customers.

In the past decades, the proper deployment of quality inspection and improvement activities have been crucial for importers to compete with Japanese brands, which have achieved worldwide reputation for the production of vehicles with high reliability, initial quality, and long-term durability, with Toyota being the leader in total quality management. However, the industry-wide trend to gradually switch from combustion to electric vehicles as well as the accelerating digitalization and interconnectedness (IoT) of products and services poses new challenges for future quality inspection and improvement needs that go beyond assuring legal conformity and reliability of cars.

The purpose of this study is to investigate how import OEMs in Japan perform quality inspection and improvement to meet customer expectations and what future challenges they are facing in light of the adoption of more electric cars as well as the digitalization and integration of products, components and services.

This paper presents findings from semi-structured one-on-one interviews with five major car import OEMs in Japan. The interviewees were senior managers in Customer Service, Retail Operations and Technical Service who play a key role in quality assurance of products and services. Findings from this study will help to better understand the global value chains and implications of future trends in one of Japan's key markets.