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The Secret Weapon Against China? Toyota Says It's Collaboration
The Secret Weapon Against China’s Auto Giants? Toyota Says It’s Collaboration
Peter Lyon, Contributor Mon, July 27, 2026 at 11:38 AM EDT 4 min readFor decades, Toyota built its reputation on doing things differently. The Toyota Production System became the gold standard for manufacturing efficiency, while its suppliers formed one of the world's most tightly integrated industrial ecosystems. But in a remarkable twist, former Toyota CEO Koji Sato is now suggesting that Japan's carmakers should do something they have traditionally resisted: share more.
Speaking recently about the challenges facing Japan's automotive industry, Sato argued that manufacturers should pursue far greater standardization of components across the industry for better efficiency. In an era where Tesla and Chinese EV giants such as BYD, Geely, Chery and SAIC are rewriting the rules of car manufacturing, he believes Japanese automakers can no longer afford to develop thousands of near-identical parts independently.
It's an idea that sounds surprisingly familiar
More than a decade ago, the late Sergio Marchionne, then CEO of Fiat Chrysler Automobiles, in his Confessions of a Capital Junkie, repeatedly urged global automakers to stop wasting billions of dollars developing components that consumers never see. In a now-famous 2015 presentation, Marchionne argued that the industry was destroying shareholder value by duplicating research and development on everything from seat frames and wiring harnesses to electric motors, HVAC systems and battery technology.
His message was blunt: compete where customers notice the difference, but collaborate on everything else.
At the time, many executives politely ignored him. Today, Marchionne's argument appears more relevant than ever. Especially to Sato.
Chinese automakers have dramatically shortened development cycles while cutting manufacturing costs through vertically integrated supply chains and extensive parts sharing across multiple brands. Tesla has also embraced simplification, reducing the number of parts in many assemblies through innovations such as giga-casting, highly integrated electronics and software-defined vehicle architectures.
The result is faster production, lower costs and greater manufacturing flexibility.
Japanese automakers, by contrast, have traditionally prized engineering independence. Toyota, Honda, Nissan, Mazda and Subaru have each developed their own platforms, electronic architectures, steering systems and countless proprietary components, even when performing similar functions.
That philosophy helped foster innovation during the industry's golden years. Today, however, it can also mean duplicated investment at a time when companies must simultaneously fund electrification, autonomous driving, artificial intelligence, connected services and advanced battery technologies.
Story ContinuesSato believes the answer isn't eliminating competition—it is redefining where competition matters.
Sato says standardization is the answer
Standardizing thousands of unseen components would allow manufacturers to pool development costs while concentrating engineering resources on areas customers actually value, including design, driving dynamics, software, safety technologies and user experience.
In many respects, Toyota has already demonstrated the benefits of collaboration. Its TNGA architecture allows multiple Toyota and Lexus models to share common platforms and components, reducing complexity while improving quality and profitability. The company has also partnered with Subaru on the bZ4X and Solterra electric SUVs, and with Mazda and Suzuki on various powertrain and technology projects.
Sato's proposal simply extends that philosophy beyond Toyota's own corporate boundaries.
The challenge, however, is cultural as much as technical. Japan's automotive industry has long been built around fiercely independent engineering organisations, each supported by deeply rooted supplier networks. Convincing rival manufacturers to adopt common standards would require unprecedented cooperation between companies that have spent generations differentiating themselves through proprietary engineering. And is anyone can gain a consensus and get the job done, Sato can, especially with his new title of chairman of the Japan Automobile Manufacturers Association.
Yet competitive realities may leave them little choice.
China's manufacturers continue to gain market share worldwide, while Tesla has shown that software and manufacturing efficiency can be as important as horsepower and handling. The competitive battlefield is shifting from mechanical hardware to digital ecosystems and production speed.
Ironically, Sato's vision may represent the next evolution of the very efficiency principles Toyota pioneered decades ago.
Marchionne saw it coming in 2015. He argued that collaboration would become essential as vehicle technology grew exponentially more expensive. Eleven years later, with Chinese EV makers transforming the competitive landscape, Japan's biggest automaker appears to be reaching the same conclusion.
If Sato succeeds in persuading Japan's carmakers to embrace widespread parts standardization, it could become one of the industry's most significant strategic shifts since the birth of lean manufacturing—not because the companies would become more alike, but because it would free them to compete where it matters most.
This article was originally published on Forbes.com
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