Koji Sato, previously Toyota CEO and now its chief industry officer, advocates stronger standardization and teamwork among Japanese carmakers to address challenges from expanding Chinese brands.

Sato, who heads the Japan Automobile Manufacturers Association, spoke with Automotive News and highlighted improving international competitiveness as the top priority for the sector.

While avoiding direct references, the focus on China is evident, as Chinese brands outsold Japanese ones in Europe for the first time in May.

In Europe through May, China led with 144,425 units sold compared to Japan's 117,332, placing it second. Chinese makers are advancing in Asia and emerging markets, though high tariffs limit access to the large US market.

Sato argues the Japanese industry must form strategic cooperation areas for efficiency in hidden components and materials, freeing resources for innovations like driver assistance systems, rapid-charging batteries, software platforms, and diverse powertrains.

Initial efforts target standardizing items such as wiring harnesses, where suppliers currently produce about 70,000 variants, hindering automation.

Standardizing key elements like harnesses, steel types, and resin specs could boost productivity by ten times and simplify recycling, per Sato.

Developing common specifications may require one to two years, with implementation delayed until the next vehicle generations arrive.

JAMA is also exploring six additional collaboration zones: logistics, raw material sourcing, circular economy recycling, talent acquisition, infrastructure for self-driving cars, and tax simplification.

The standardization push, backed by Sato and JAMA, gains support from Nissan CEO Ivan Espinosa, who noted opportunities to share critical commodities under common specs certified by JAMA for flexible supplier use.

Sato served three years as Toyota CEO before Kenta Kon took over earlier this year. He stays on the board as chief industry officer to promote cross-industry ties for Japan's competitiveness.

In his new position, Sato aims to link the broader industry with Toyota, which seeks growth benefiting all Japanese automakers rather than standing apart.

He noted JAMA leadership rotates to the firm best positioned for current challenges, and Toyota holds full ownership of Daihatsu and Lexus plus minor stakes in Subaru, Mazda, and Suzuki with some joint models and tech.

Nissan controls about 27 percent of Mitsubishi and nears a cooperation agreement with Honda on parts, software, and vehicles. Renault, Nissan's top shareholder, has shifted to looser case-by-case ties including shared models like the Micra and 5 E-Tech.