Japan's Automotive Components Supply Chain Opens Up... "2027 Is the Golden Window for Korean Firms"

by Park Joonyi

Published 22 Oct.2026 08:02(KST)

Demand for Automotive Components Grows as Hybrid Vehicles and SDVs Gain Ground
Shipments of Parts for Eco-Friendly Vehicles in Japan Rise 15.3% Year Over Year
Procurement Sources Diversify... Certifications and Local Delivery Track Record Key

As the hybrid vehicle and software-defined vehicle (SDV) markets grow in Japan, demand for automotive components such as vehicle cameras, chargers and power semiconductors is increasing. With supplier selection for parts for new vehicles scheduled to launch around 2030 expected to be concentrated in 2026 and 2027, analysts say this will be a golden opportunity for Korean companies to enter Japan's supply chains.

The Korea Trade-Investment Promotion Agency (KOTRA) said it published a guidebook on Oct. 22 titled "Trends in Japan's Automotive Components Market and Strategies for Korean Companies to Enter the Market," analyzing trends in Japan's automotive components market and changes in its business structure and outlining strategies for Korean companies seeking to enter the market.

According to the Japan Automobile Dealers Association, sales of hybrid vehicles in Japan rose about 49%, from 1.03 million in 2021 to 1.53 million in 2025. Hybrid vehicles also require automotive components such as power semiconductors, and as driver-assistance features increasingly come as standard, demand for components is growing regardless of vehicle type.

According to the Japan Auto Parts Industries Association, shipments of parts for eco-friendly vehicles totaled 1.2971 trillion yen in fiscal 2024, up 15.3% from the previous year. Shipments of vehicle chargers, electronic control units for vehicle bodies and vehicle cameras rose 91.1%, 89.3% and 15.1%, respectively. The Japan Electronics and Information Technology Industries Association forecast that the share of new vehicles that are software-defined vehicles would rise from 0.03% in 2025 to 62.0% in 2035.

Exterior view of the Korea Trade-Investment Promotion Agency (KOTRA). KOTRA.

As Japanese automakers take three to four years to develop new vehicles, supplier selection for models scheduled to enter mass production around 2030 is expected to be concentrated in 2026 and 2027. The weakening of the longstanding practice of doing business with existing partners and the diversification of procurement sources are also seen as opportunities for Korean companies. According to the Japan Auto Parts Industries Association, parts suppliers did business with an average of 7.09 automakers each in 2024. Supplier selection criteria are also expanding beyond price to include reliable supply capacity and security credentials.

KOTRA recommended that Korean companies position themselves as partners that strengthen, rather than replace, Japan's existing supply chains. For products in which Japanese companies are highly competitive, companies should seek to enter the market as a "second source" that complements existing suppliers. In areas where Korean companies have strengths, such as communication modules, memory and camera modules, they should emphasize those advantages. KOTRA also recommended securing automotive quality management system certification, meeting cybersecurity standards and obtaining certification under Japan's Radio Law in advance. It advised companies to build a track record of deliveries in the Kyushu region before expanding their sales efforts to Aichi, Kanto and other areas.

Park Yong-min, head of KOTRA's Japan Regional Headquarters, said, "Japan is a market where hybrid vehicles, kei electric vehicles and software-defined vehicles are growing at the same time." He added, "With supplier selection set to peak over the next two years, this is the golden opportunity to enter the Japanese market. Companies should expedite certification and prototype preparations and demonstrate that they are reliable partners for Japanese automakers."