Japan Data

Software Industry Accounts for Largest Segment of Toyota Group Subcontractors

Economy Work

With the number of high-tech features in cars constantly growing, the latest survey of Toyota’s subcontractors found that their most popular industry category is software development.

Toyota Motor Group, which includes 15 major affiliates and subsidiaries, has 41,427 subcontractors, including 6,380 primary subcontractors that deal directly with the company, and 35,047 secondary subcontractors that deal indirectly through the primary subcontractors. This is the finding of a survey conducted by Teikoku Databank, the fourth of its kind, in which the total number of subcontractors exceeds 40,000 for the first time.

By industry category, software development ranked first for both primary and secondary subcontractors, whereas the category was second for both types of subcontractors in 2014. This reflects the increase in transactions with software-related industries involved in the development of software essential for system control, automatic driving technology using artificial intelligence, and map data or navigation screens, as well as the analysis of various experimental data.

According to Teikoku Databank, the development of various power units, such as electric vehicles and fuel cell vehicles, and the move toward decarbonization have opened up business opportunities for software and materials manufacturers in the automobile industry with which they had little involvement in the past.

Industry Type of Toyota Group Primary Subcontractors

2014 2021
Manufacture of automobile parts (221) Software development (296)
Software development (195) Manufacture of automobile parts (261)
Manufacture of molds and parts (183) Manufacture of molds and parts (225)
Wholesale of industrial-use electronics (166) Wholesale of industrial-use electronics (200)
Dispatch of temporary workers (105) Dispatch of temporary workers (186)

Created by Nippon.com based on data from Teikoku Databank. Figures indicate number of companies.

Industry Type of Toyota Group Secondary Subcontractors

2014 2021
Wholesale of industrial-use electronics (964) Software development (1,525)
Software development (749) Wholesale of industrial-use electronics (1,201)
Wholesale of steel and processed products (747) Manufacture of molds and parts (988)
Wholesale of mechanical tools (696) Manufacture and repair of machinery and machine parts (912)
Manufacture of molds and parts (665) Manufacture of metal press products (875)

Created by Nippon.com based on data from Teikoku Databank. Figures indicate number of companies.

In fiscal 2020, 18,718 of the 25,000 Toyota Motor Group subcontractors surveyed, or 73.2%, reported a decrease in sales. In fiscal 2019, there was an even split between increased and decreased sales, at around 40% each, but the following year sales were negatively impacted by the rapid fall in automobile demand due to the global COVID-19 pandemic. Sales in the market for new cars subsequently began to recover, but it was not enough to rebound from the drop in sales at the beginning of the fiscal year.

(Translated from Japanese. Banner photo © Pixta.)

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