Research in the International Journal of Automotive Technology and Management has looked at digital transformation in the German and Japanese automotive industries. The study highlights key differences in how companies in each country have adopted digital technology.
Martin Schröder of Ritsumeikan University in Osaka, Takefumi Mokudai of Kyushu University in Fukuoka, Japan, and Hajo Holst of the University of Osnabrück, Germany, explain how digital transformation in the automotive industry is an ongoing process. It is encompassing a range of technological developments, including automation, smart manufacturing, mobility-as-a-service (MaaS), and the broader shift towards new business models.
One might talk of “Industry 4.0” as being the state-of-the-art where the emphasis is on automation and data exchange in manufacturing technologies. It is this that has been particularly influential in shaping how companies innovate and adapt and how they make the most of new opportunities.
The researchers found some notable distinctions between German and Japanese companies and their approach digitalization. German companies tend to adopt top-down, systematic approaches, implementing digital technologies across entire production lines. This, the team explains, is done in order to optimize manufacturing processes. In contrast, Japanese firms take a bottom-up approach, integrating digital tools incrementally into existing systems. This, the research suggests has led to “island solutions,” or individual digital enhancements that are not necessarily integrated fully.
Nevertheless, firms in Germany and Japan are both evolving. Japanese firms are adopting more comprehensive and systematic digitalization models. While their German counterparts are increasingly focusing more on operational flexibility, reducing downtime, and improving product quality, rather than simply pursuing extensive automation. The changes reflect a broader shift in the automotive sector, as companies in both countries adapt to the challenges posed by digital technologies, the transition to electric vehicles, for instance.
Schröder, M., Mokudai, T. and Holst, H. (2024) ‘Industry 4.0 and lean augmentation? Digital transformation in the German and Japanese automotive industry’, Int. J. Automotive Technology and Management, Vol. 24, No. 6, pp.1–27.