Abstract
The Japanese automobile industry forms a characteristic hierarchical structure composed of eleven car producers, and many parts-and-components suppliers under them. These suppliers generally cluster round final-assembly plants in order to satisfy the JIT (just-in-time) manufacturing system adopted by the car producers.
This paper examines mutual involvement among Mazda, direct parts and components suppliers to Mazda, and their sub-tier parts suppliers in and around Hiroshima. 86 suppliers located around Hiroshima organize a group of associate companies under Mazda called the‘Toyu-kai’in order to maintain their harmonic business relation. Most of the main plants of these suppliers were built in the Hiroshima metropolitan area adjacent to the final-assembly plant. Many of their branch plants were been eventually constructed in the neighboring rural area since '70, seeking extensive and low-cost plant sites and adequate labour force. Several suppliers built their branch plants in Hofu, Yamaguchi Prefecture, in accordance with the construction of a new Mazda assembly plant there in 1982.
Vertical as well as horizontal business transactions are common among the direct suppliers, and all of the 18 suppliers studied often subcontract production of small parts to the same-tier suppliers.
The shortage of labour at present is acute and a serious problem for these suppliers. As a result, some suppliers employ foreign factory workers, mainly among the second and third generations of Japanese emigrants to Middle and South America.
