YOKOHAMA, Japan — The mantra among Japanese automakers these days is that changing times mean changing tactics, changing technologies and, perhaps most jarring of all, changing parts suppliers.
For foreign suppliers, long blocked from the local market by Japan's close-knit keiretsu system of vertically integrated parts makers, the upheaval presents a game-changing opportunity.
German giant Continental thinks the moment is right for sales to surge in Japan, says Bert Wolfram, CEO of Continental Automotive Japan, the supplier's local subsidiary.
"Bringing cutting-edge technologies to the Japanese market is going to drive us forward," Wolfram said at his company's headquarters here just south of Tokyo. "That's what customers want and require. That's where the open door is.
"In the past, they were more conservative when it comes to technology."
The world's No. 5 parts maker forecasts ¥544 billion ($5.2 billion) in sales to Japanese automakers in 2019, double its 2014 sales. That would be a nice leap for an international supplier that set up operations in Japan only in 2000.
Over the past 18 years, Continental has expanded its payroll here to almost 1,300 employees, nearly half of them in engineering. Last July it moved into a bigger headquarters building in Yokohama, across the street from a four-story technical center it opened in 2007.
Latest and greatest
Sales to Japanese automakers worldwide now account for about 30 percent of Continental's global automotive revenue. And to match the annual double-digit sales growth, Wolfram says he expects to hire 100 to 200 additional workers a year for the foreseeable future.
Japan's automakers are looking outside their keiretsu for several reasons.
As they localize production in overseas markets, Japanese automakers need suppliers with an established international footprint and the ability to supply the same part anywhere in the world. But they also are increasingly on the lookout for the latest, greatest technologies.
That means changes for Continental too. In the past, the supplier was apt to offer its most cutting-edge products to its core group of customers. But no more.
"We have to bring our latest technologies right away also to our Japanese OEMs and not just to European or American OEMs," Wolfram said. "I think that's different from the past."
Continental made a big breakthrough in 2015 when it began supplying a precrash emergency braking system to Toyota for use across its compact car range.
First dibs
Marketed as Toyota Safety Sense C, the package is now in such nameplates as the Corolla, Yaris and Prius C hybrid. That order took a big slice of a pie that might otherwise have gone to Japan's Denso Corp.
Toyota has since begun supplying a similar setup to Suzuki and Mitsubishi.
Going forward, Japanese automakers will have first dibs on other advanced technologies.
Among them, Continental plans to deliver a flash lidar system to a Japanese automaker by 2020 to use in an autonomous driving system. Wolfram declined to name the customer but said it would be among the first worldwide to get the product. The vehicle is expected to be a low-volume, upscale model and need several of the lidar scanners to flesh out the system.
Continental brought the lidar know-how in-house through the acquisition several years ago of a California startup. The flash lidar under development has no moving parts and builds a 3-D image of a car's surroundings by beaming out lasers 30 times a second.
"We will step into the sensor field with this new technology," Wolfram said. "We definitely want to bring our latest technologies to our Japanese OEMs right away."