Enabling a just transition for Japanese automotive parts SMEs

The global automotive industry is undergoing a period of significant structural transformation as countries pursue climate objectives and adapt to advances in digital and clean technologies. These developments are reshaping production systems, employment structures and the skills required of workers. In Japan, where the automotive supply chain is extensive and deeply embedded in regional economies, this evolution presents both significant opportunities and important challenges. SMEs, which constitute the majority of firms in the sector, remain central to maintaining innovation, competitiveness and employment. The transition towards connnected, autonomous, shared and electric or CASE vehicles requires enterprises to adapt long-established production models and to integrate emerging technologies. It also requires workers to learn new competencies and to navigate changes in job tasks, employment prospects and workplace practices. Supporting this transformation in a manner that safeguards rights at work, advances decent work opportunities and promotes social dialogue is essential to ensuring a just transition for all. This report, Enabling a Just Transition for Japanese Automotive Parts SMEs, provides new evidence on how enterprises and workers are experiencing and responding to these industrial changes. Drawing on enterprise data, worker perspectives and interviews with sectoral stakeholders, the study offers an in-depth assessment of the levels of preparedness among automotive supplier SMEs and identifies the conditions that either enable or hinder adaptation.