The decline of the Japanese automobile industry: Domestic and international implications

Abstract

The upheaval in the U.S. auto industry this past decade obscured a fundamental shift in the cost base of the Japanese industry. Wages there in dollar terms more than doubled, to levels slightly higher on average than in the U.S. At the same time the U.S. At the same time the U.S. industry was improving its management, bettering efficiency, quality and the vehicle design process. Now little gap remains there either. This paper explores the sources and implications of these changes in the industry in the two countries, both for assembly and parts manufacturing, and for bilateral trade