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RealClearMarkets: The Positive Impact of Japanese Automakers On U.S. Economic Growth

Anita Rajan


May 18, 2023

With the upcoming G7 summit in Hiroshima, Japan, now more than ever the long-standing, dynamic partnership and steadfast alliance between the United States and Japan is on full display. During Japanese Prime Minister Fumio Kishida’s visit to Washington D.C. at the start of the year, President Joe Biden emphasized, “I don’t think there’s ever been a time when we’ve been closer to Japan.” Underscoring this sentiment is the fact that Japan is the United States’ largest foreign investor. And importantly, Japanese-brand automakers have continued to nurture this relationship by investing in local communities, leading with an innovative mindset, and bolstering U.S. competitiveness with their contributions to the U.S. economy and automotive industry. 

For years, Americans have been warned about the decline of U.S. manufacturing and policymakers have been urged to support domestic manufacturing. However, it needs to be understood that the Japanese-brand automaker story is an American success story. Throughout the years, Japanese-brand automakers have been a major, direct contributor in shaping the U.S. manufacturing landscape and have generated and supported millions of American jobs. Japanese-brand automakers have cumulatively invested $60.4 billion in manufacturing, and today, nearly one-third of all vehicles produced in the U.S. are made by Japanese-brand automakers. All told Japanese-brand automakers’ presence spans 24 manufacturing facilities, 43 R&D and design centers, 69 distribution centers, and countless new vehicle dealerships, meaning their impact can truly be felt in every state in the country.  

This impact is quantifiable. According to newly released data from the Japan Automobile Manufacturers Association (JAMA), Japanese-brand automakers directly employed over 107,000 workers while their dealer network employed more than 372,000 workers in 2022. Further based on a recent study by Dr. Thomas Prusa from Rutgers University, another 910,000+ U.S. workers are employed in intermediate goods and parts industries that supply Japanese-brand automakers’ U.S. vehicle production, other facilities and dealers, and an additional 900,000 U.S. jobs are bolstered by direct and intermediate employment. Altogether, Dr. Prusa estimates that more than 2.2 million U.S. jobs are supported by Japanese-brand automakers’ investments. 

While the number of jobs alone is impressive, the growth in Japanese-brand automakers’ U.S.-based employment is even more noteworthy. In the last decade, Japanese-brand automakers and dealers have increased their direct employment by 33% and 14%, respectively. This far outpaces overall U.S. employment during that same time period even after emerging from years of uncertainty brought on by the pandemic. This is undoubtedly a great American story of endurance, resilience, and perseverance. 

What’s more, as the industry pivots to a more electrified future, Japanese-brand automakers have been at the forefront of that change contributing to the U.S. economic competitiveness in the broader global transition to electrified vehicles. A widespread electrified future will revolutionize the mobility landscape, but it’s not a change that can happen overnight. It requires a complex U.S. ecosystem of available and reliable charging infrastructure, battery production and broad consumer confidence and acceptance. Not only are Japanese-brand automakers preparing for this transition by investing in vehicle and battery production in the U.S., but they are also building on a legacy of success in this space. Today, Japanese-brand vehicles represent over 50 percent of all electrified vehicles on the road.  

Since 1982, Japanese-brand automakers have called the United States home. Despite all the changes in the last four decades, including an unprecedented global pandemic, Japanese-brand automakers have not only shown an ability to produce high-quality vehicles for U.S. consumers but have also demonstrated a tremendous commitment to the communities they serve and the people in them. Despite the uncertainty that comes with rapid changes both within the automotive industry and the world, Japanese-brand automakers remain a tried-and-true presence in the U.S. and its economy and aim to be for years to come. 

Anita Rajan is the General Director of the Japan Automobile Manufacturers Association (JAMA USA). 

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