KOTRA: Korean auto electronics firms have until 2027 to enter Japan supply chain

KOTRA (대한무역투자진흥공사) said this year and next are the decisive period for Korean automotive electronics companies to enter the supply chains of Japanese carmakers. It made the assessment in a guidebook titled 'Japan Automotive Electronics Parts Market Trends and Strategy for Korean Companies', published on 22 October. [ 1 , 2 , 3 ]

KOTRA said Japanese carmakers' plans to mass-produce new models are expected to cluster around 2030. New-car development usually takes three to four years, so the choice of suppliers will be settled in 2026 and 2027, according to the guidebook. Yonhap added that the Japanese government is pursuing a goal of converting new passenger car sales to 100% eco-friendly vehicles by 2035. [ 1 , 2 , 3 ]

The reports cite rising demand for parts. According to the Japan Automobile Dealers Association, hybrid car sales in Japan grew from 1.03 million in 2021 to 1.53 million, about 49%. Hybrids also need electronic parts such as power semiconductors, and driver-assistance functions are increasingly fitted as standard. The Japan Auto Parts Industries Association reported that in 2024 shipments of in-car chargers rose 91.1%, body electronic control units 89.3% and in-car cameras 15.1%. Asia Economy added that eco-friendly vehicle parts shipments in fiscal 2024 totalled 1.2971 trillion yen, up 15.3% from the year before. [ 1 , 2 , 3 ]

KOTRA also said trading practices are changing. The custom of long-term dealing with affiliates inside a corporate group is weakening, and a parts maker now supplies an average of 7.09 carmakers. Selection criteria are moving from price to stable supply and security reliability. Seoul Economic Daily said KOTRA judges that this favours Korean firms that are geographically close and competitive on quality. [ 1 , 2 , 3 ]

KOTRA advised Korean firms to approach as partners that fill gaps rather than replace existing Japanese supply chains. In areas where Japanese firms are strong, they should seek to become a 'second source' alongside existing suppliers. In areas where Korea leads, such as communication modules, memory and camera modules, they should lead with those strengths. It also advised obtaining IATF 16949 quality certification, cybersecurity compliance and Japanese radio law certification in advance, and preparing prototypes quickly. [ 1 , 2 , 3 ]

The guidebook proposes a step-by-step approach that builds a delivery record at carmakers' plants in the Kyushu region before widening sales to development hubs such as Aichi and Kanto. Park Yong-min (박용민), head of KOTRA's Japan regional headquarters, said Japan is a market where hybrid cars, light electric cars and software-centred cars are growing at the same time. He said the next two years are the window for entry and that firms should hurry with certification and prototypes. A Korean electrical and electronic parts employee who supplies Japanese carmakers told Seoul Economic Daily that Japanese carmakers are widening procurement to new partners. [ 2 , 3 ]