Structure and the Change in Transaction Networks between Finished Auto Manufacturers and First Tier Suppliers in Japan

Author Name GOKO Hiromichi  (Toyota Central R&D Laboratories Inc.)
Creation Date/NO. April 2015 15-J-014
Research Project East Asian Industrial Productivity
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We investigate the parts transactions between finished auto manufacturers and first tier parts suppliers in Japan from 1989 to 2010. Our main results are as follows:

- The density of transaction networks has grown throughout the investigated period. In the 2000s, it was due mainly to suppliers transacting with more finished manufacturers.
- The finished manufacturers and the first tier suppliers have shuffled their transaction partners more rapidly than the growing density of their transaction networks.
- Throughout the investigated period, most parts have been transacted on continuously, and the transaction partners of suppliers (finished manufacturers) remain robust. On the other hand, there is a certain and consistent number of suppliers that conduct transaction for a short period of time. In recent years, transaction partners have changed parts by parts more rapidly than in the past.
- The numbers of transacting suppliers and the terms of transactions with suppliers are different between finished manufacturers. Some finished manufacturers have tended increasingly to change their suppliers parts by parts. These suggest that the management strategies of finished manufacturers affect the structures of transaction networks.

Computerization of automobiles and standardization and communization of their parts may cause drastic changes in the transaction networks of the automotive industry in the long run. So far, however, while some suppliers and parts have experienced significant change in their transaction networks, those of other suppliers and parts have remained almost unchanged. Moreover, auto manufacturers transact differently with their suppliers in many aspects.