Japan Repositions Its Automotive Industry Around Software, Autonomy, and Smart Mobility
What
Japan remains one of the world’s most important automotive markets, ranking as the third-largest vehicle producer globally and with the sector accounting for around 11% of GDP and 17% of total manufacturing output. While domestic production volumes have declined from their peak in the 1990s, Japanese OEMs continue to hold approximately 30% of global vehicle market share and operate extensive international production networks, particularly in Southeast Asia and North America.
At the same time, the Japanese automotive industry is undergoing a structural transformation driven by demographic change, digitalisation, and global competitive pressure. An ageing population, acute labour shortages, and stricter overtime regulations have contributed to a growing logistics and driver shortage, challenging traditional just-in-time models and creating strong demand for technologies that improve efficiency, utilisation, and automation across transportation and mobility systems.
Japan is also repositioning itself after falling behind in the initial phase of the EV transition. With the government’s “Mobility Digital Transformation” strategy launched in 2024, Japan is now prioritising software-defined vehicles (SDVs), vehicle data platforms, autonomy, and digital infrastructure. The stated ambition is for Japanese automakers to collectively secure a 30% global market share in next-generation SDVs by 2030, supported by public funding, workforce reskilling, and the development of shared industry platforms.
Despite these challenges, Japan retains strong technological depth, particularly in autonomous driving, where Japanese companies rank among global leaders in patent filings. OEMs and Tier-1 suppliers are increasingly seeking external partners to complement internal capabilities, accelerate development cycles, and mitigate competitive pressure from China and other emerging players.
How
These structural shifts create concrete opportunities for Swedish companies with advanced automotive technologies, particularly in areas such as vehicle software, data analytics, ADAS and autonomy, connectivity, simulation, safety, materials, and mobility efficiency solutions. Japanese OEMs and Tier-1 suppliers are increasingly open to international collaboration as they transition toward software-centric development and new mobility models.
Business Sweden supports Swedish automotive and mobility companies in engaging with the Japanese ecosystem through targeted market entry support, stakeholder access, and strategic positioning. This includes facilitating dialogue with OEMs, Tier-1 suppliers, regulators, and innovation platforms, as well as creating structured opportunities for matchmaking, pilots, and long-term partnerships.
Activities range from sector-specific delegations and industry events to tailored B2B introductions and advisory support on localisation, partnership models, and regulatory considerations. Platforms such as Sweden Autotech Day during the 2025 Osaka Expo and participation in major Japanese automotive and mobility exhibitions provide Swedish companies with direct access to decision-makers and early-stage collaboration opportunities in Japan’s rapidly evolving automotive landscape.
Contact us
For more information contact Hideki Hayashi at hideki.hayashi@business-sweden.se