By Shinnosuke Kurama

Yomiuri Shimbun Staff Writer

Japan's automotive industry must make concerted efforts to improve supply chains and secure important resources, said Toyota Motor Corp. President Koji Sato, who assumed the post of chairman at the Japan Automobile Manufacturers Association earlier this month.

"There are many issues that require results to be delivered extremely quickly from the perspective of economic security," Sato told reporters on Jan. 6.

The following is excerpted from his responses to questions from media outlets.

Question: What do you think will be the key for Japan's economy in 2026?

Koji Sato: I believe (enhancing) international competitiveness is extremely important. The energy environment and the political and economic situations are changing significantly in every region. It is important to consider how to respond to each region and find winning formulas for Japan. We should avoid price-only competition. Instead, we should work on stimulating Japan's automotive industry, and build a sustainable business model while doing so.

There are many issues that require results to be delivered extremely quickly from the perspective of economic security and in the fields of supply chains and important resources. Cultivating collaboration (between automakers) will be very important, because there are limits to what individual companies can do.

We need to reexamine whether Japan can really compete globally with supply chains that have traditionally been established based on corporate groups and the areas to which they are connected. In a sense, we must develop large-scale collaborations that can achieve economies of scale. It's important to succeed in international competition squarely through such efforts.

Question: You have mentioned that Japan's strength in manufacturing lies in such things as real-world data, artificial intelligence and robotics. Could you go into more detail on the matter?

Sato: Currently, many people talk about robotics enthusiastically, saying it can change the landscape of manufacturing. However, I don't think it's that easy. Humanoids can act like humans, but that does not necessarily mean they can directly help manufacturing.

The accumulation of tacit knowledge depends on how hard each worker works to assure the quality of products. When companies introduce robots powered with physical AI into factories, (the quality) of software and data will be paramount.

The reason why price-to-book ratios of Japanese automakers don't rise is that their evaluation is solely focused on the number of cars they sell. (Japanese automakers) still believe in a formula that the growth in sales volume equals the growth of the automotive industry. I want to change that perception.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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January 13, 2026 00:55 ET (05:55 GMT)

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