The history of the Japanese automobile industry is characterized by the initial dominance of foreign producers with scale advantages and superior technology; technology acquisition by Japanese pioneers through reverse-engineering and/or technological tie-ups and then R&D and learning by doing; and plentiful entrepreneurship that resulted in numerous entry attempts and intensive investment under extremely risky circumstances. The government also played an important role in its development through financial incentives, standard setting, procurement by the military and the transportation authority, and protection from foreign competitors. After more than half a century of struggle, Japanese car manufacturers have now caught up with the European and US rivals technologically, and are surpassing them in certain areas. No book on the technology and industrial development of Japan would be complete without a discussion of this industry. 1
The first automobile driven in Japan is considered to be a steam-engine car imported from Europe by a foreign trader in 1897, when automobiles were still a novelty, even in Europe. An American established a company in 1901 to import steam-engine cars from a US manufacturer called Locomotive, and sold about ten units to curious Japanese. Yet, until 1903, when two cars, one steam-driven and the other electric- driven, were used as buses in a large exposition, few Japanese had seen automobiles. One of the visitors to this exposition, Yamabane Torao, was impressed and started an effort to make an automobile domestically. This effort produced one steam-driven car but it had so many troubles, particularly with the durability of tyres, that Yamabane gave up any commercial application. Four years later, domestic production of gasoline-driven cars started with the main parts (including engines, it seems) imported at first but gradually replaced by domestic production.