Title: Information technology and automobile distribution: a comparative study of Japan and the USA

Authors: Kiyohiko G. Nishimura, Masataka Morita

Addresses: Faculty of Economics, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-8654, Japan. Faculty of Business Administration, Rissho University, 4-2-16 Osaki, Shinagawa-ku, Tokyo 141-8620, Japan

Abstract: Automobile distribution has undergone a drastic change in recent years both in Japan and the USA, because of so-called ||market globalisation|| and ||digital/network revolution||. The purpose of this paper is to provide an analytic framework of this change and to apply it to Japan and the United States to foresee differences in future development. We argue that the firm|s strategic positions can be summarised in the three-dimensional ||strategic-pattern|| space; 1 - whether the firm is prone to ||combinatorial optimisation|| or ||process oriented optimisation||, 2 - whether the firm|s products are based on ||modular architecture|| or ||integral architecture||, and 3 - whether the firm adopts ||horizontal-dominance strategy|| or ||vertical enclosure strategy||. We then characterise recent developments in the US and Japanese car markets as a result of car manufacturers| and dealers| adaptation to global competition and information technology. We identify three typical combinations of strategic patterns; 1 - ||dealer consolidations by manufacturers||, 2 - ||dealer consolidations by retailers||, and 3 - ||informediaries| initiative||. We examine advantages and disadvantages among the three strategic patterns. We argue that, whilst the three strategic patterns are likely to coexist in the near future in the USA, because of strong regulatory restrictions (dealer protection laws) manufacturer-driven changes are more likely in Japan.

Keywords: international comparison; strategic patterns; combinatorial optimisation; process-oriented optimisation; modular; integral; horizontal dominance; vertical enclosure; informediary.

DOI: 10.1504/IJATM.2002.000064

International Journal of Automotive Technology and Management, 2002 Vol.2 No.2, pp.206-237

Published online: 13 Jul 2003 *

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