Strategic alliances in the Japanese car industry: the impact of the current crisis on governance mechanisms

International audienceIn Japan there exists an alliance system called keiretsu. Keiretsu may involve formal and informal relationships with suppliers which have developed over the years) or other interfirm links (for example, among manufacturers and supporting financial institutions). In the late 1990s, the Japanese economic system has undergone some changes such as the dissolution of cross-shareholdings and the decline of the main bank system (relationship-based financing) leading to changes in the corporate ownership and the governance system of Japanese companies. The shareholdings of foreigners have increased and pressures by foreign investors on Japanese managers have become stronger. These are shareholders who are much more interested in short-term profits rather than on long-term growth. In the car industry, Nissan and Mitsubishi (previous keiretsu) restructuring in Japan has resulted in a breakdown of the Keiretsu system of preferred supplier agreements across the whole Japanese industry opening up opportunities for new suppliers to break in to this market. Consequently, since the end of the 1990s several alliances have been signed with foreign cars manufacturers : Nissan/Renault, Mazda/Ford, Mitsubishi/ DaimlerChrysler (ending in 2004). In 2009, Mitsubishi and PSA (Peugeot Citroën: a French automotive company) have started negotiations to form a new strategic alliance. The aim of this chapter is, in the end, to examine the impact of the crisis on Japanese automakers corporate governance in reference to the relationships between the different actors in the automobile system. In particular, the evolution of governance mechanisms underlying the implementation of corporate strategies in the case of strategic alliances and keiretsu will be analysed as the shareholders structure and the degree of capital control of a firm do influence its management. We will examine the extension (or not) of governance procedures to all stakeholders and how widely this should be interpreted in these alliances and the role of culture in these operations