Japan's auto industry is facing mounting pressure as Chinese electric vehicle manufacturers continue to expand their global presence.
Speaking at Toyota's annual supplier meeting, Koji Sato said Japanese automakers are unlikely to maintain their current positions without major changes. He believes the industry should focus on developing technologies that matter most to customers while standardizing the production of basic components as much as possible.
Sato proposed creating a unified Japanese standard for steel products, plastic components, and wiring harnesses. According to him, suppliers currently produce about 70,000 different wiring harness variants, and reducing that number would significantly lower manufacturing costs. The savings could then be redirected toward software development, driver-assistance systems, next-generation batteries, and fast-charging technology.
The proposal comes as Chinese automakers continue to gain ground. According to the European Automobile Manufacturers' Association (ACEA), in May 2026, BYD, Geely, SAIC, Chery, and Leapmotor collectively sold more vehicles in Europe than Toyota, Honda, Nissan, Mazda, Suzuki, and Mitsubishi combined for the first time.
In China, Toyota's sales fell 17% in the first half of the year, while Honda's dropped 35%, highlighting intensifying competition from domestic electric vehicle manufacturers.
The proposal is already being discussed within the Japan Automobile Manufacturers Association (JAMA), which is chaired by Koji Sato. However, industry experts note that reaching agreement on common standards among competing automakers will be difficult given the differences in their product lineups, technologies, and manufacturing processes.