Automotive Components & Aftermarket

Something of significant importance behind these dramatic changes is a country’s standards for the automotive industry and the firms that supply it. For the members of the EBC Automotive Components & Aftermarket Committee, it is vital to stay in sync with the automobile manufacturers and the Government of Japan in regard to this key area.

The automotive components industry continues to face a range of persistent challenges. Ongoing shortages of semiconductors and other key materials, combined with evolving geopolitical tensions and shifts in consumer demand, have continued to impact production and delivery schedules across the sector. Although governments and industry leaders are taking steps to address these issues, a quick resolution remains unlikely. In light of these conditions, the EBC Automotive Components & Aftermarket Committee presents its recommendations aimed at strengthening Japan’s market environment and supporting long-term industry resilience.

Globalisation and intense competitive pressures have made outsourcing of automobile component development and supply a clear trend in the European automotive industry. This shift has fostered an environment characterised by lower risk, competitive pricing, and greater flexibility.

Historically, European component manufacturers that found success with Japanese transplants in Europe rarely progressed to become suppliers for parent companies in Japan. However, recent changes in the Japanese automotive sector are creating new opportunities. In response, many European firms are allocating resources to win business in Japan—investing in local infrastructure, gaining insights into technical requirements, and cultivating stronger relationships with Japanese clients.

In this context, the EBC highly values ongoing, structured dialogue between European component manufacturers and Japanese carmakers. Such engagement is seen as essential for information exchange, deeper mutual understanding, and the long-term development of mutually beneficial business opportunities.

The harmonisation of standards between Japan and the EU continues to be a key issue. This includes the mutual recognition of testing standards so items that have been approved in the EU can more easily be brought into Japan (and vice versa), as well as the streamlining of regulations for chemical substances of concern, for example. The EU and Japan should also work together to set — and roll out globally — certain standards and specifications for new technologies in the automotive industry, such as autonomous driving, hydrogen cars, and safety standards. If these goals are realised, consumers on both sides will benefit from faster access to better vehicles and components.

One area where regulatory change would ultimately benefit Japanese and foreign firms is the auto components independent aftermarket (IAM). At present, business is seriously constrained by restrictive practices; for example, when carmakers in Japan enter into supply contracts, the contracts routinely prohibit the suppliers from selling the parts independently, a practice at odds with the situation in Europe and the US. In fact, EU law prohibits carmakers from imposing such restrictions in their parts-supply contracts. The EBC urges Japan to introduce a similar legal framework, allowing healthy competition and fair opportunities for all, so that end customers have a wider choice. The introduction of the motor block exemption legislation in the EU has proved very successful in creating a vibrant aftermarket for automotive parts.