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Japan’s recent dominance of the international auto industry does not result from some major single factor, such as technological superiority or advanced automation. It derives from twenty years of building flexible, durable industrial systems integrating assemblers, suppliers, and related companies. Current competitive advantages result from combinations of seemingly unrelated company, government, and labor practices. Japan’s position of leadership will instigate major changes in international labor forces, corporate strategies, and government policies, as former auto powers adapt to new competition, and simultaneous shifts in energy and economics.