| Auto industry is one of the mainstay industries in a country. The scale and diffusion effects of the auto industry in a country mean quite a lot to the country's economic development and economic security. Recent years have seen rapid development of auto industry in China. It is worthwhile to mention that by October 2009, China had produced more than 10 million automobiles, just after the United States, and Japan. However, the true indication for a country's auto industry is the production of passenger vehicles represented by cars. As is known to all, China's passenger car production is lagged much behind, heavily dependant on the assemblage of automotive products made by Volkswagen, Toyota, General Motors and the like.Along with the rapid development of economy since the adoption of the reform and open-door policy in China, the national standard of living has dramatically increased and accordingly the level of demand in the country has equally increased. People have begun to satisfy themselves by consuming more and more high-grade products such as cars which are the chief high-grade products for the Chinese people at present. It goes without saying that as far as the productive basis and the consumptive demand are concerned, the present era is the best historical chance for the development of the auto industry in China.However, there are still many problems with China's auto industry. For instance, almost all the auto enterprises in China are small in scale, and nearly 100 automotive enterprises exist as "small and complete" plants. To make the matter worse, many regions are competing with one another to produce quite similar automobiles, only to waste resources because of duplication. This goes sharply against the Big Three in the U.S and the nine autos in Japan. One of the problems China's auto industry has to face is that it has not yet had its own national automobile brand, which can put it on the equal footing with its foreign counterparts on the international market. The so-called few large plants have so far produced automobiles with the world-famous brands (like Toyota, Honda, Volkswagen, General Motors) on them. All this indicates that in competing with its foreign counterparts, China's auto industry has long been in an inferior situation. Needless to say, innovation has not been satisfactory in the country's auto industry.One of the undeniable facts is that because of ever increasing competition in today's world economy, the position of a country's auto industry on the world market is heavily dependent on its scientific and technological innovations and the country's own national brands, which also decide on the driving force and promoting function which the auto industry serves as the mainstay industry for a country. The auto industry in a country should contribute a great deal to such matters as consumption and employment, and this has become one of the issues for the country as well as for its people.Japan's auto industry came into being after the world war II. It has since made a surprising success. It has spent less than 3 decades in making itself world-famous for its fuel efficiency, lightweight, low-emission and now it has occupied an irreplaceable position on the world market. It has, in production and sales surpassed the U.S., which it has learned from and imitated as an example. Nowadays, Japan's auto industry has been imitated by many countries. It is even worth the study by China. . The dissertation comprises nine chapters.The first chapter is introduction, in which the author presents the background of the topic at issue, the approaches and methodology he takes to deal with the topic and the innovation and shortcomings in the present research.The second chapter is basic theories and general analysis, in which the author tries to define the term innovation in the light of Schumpeter's innovative theory. He also discusses the relationships between innovation, profit and economic circle and the role innovation plays in economic development. This chapter also touches on the categorization and model of innovation. The third chapter is the development history of Japan's auto industry, in which the author deals with the development and evolution of Japan's auto industry at a historical angle, arguing that Japan's auto industry began in the 1930's, going through such periods as the formation period of production system, the construction period of passenger-cars system, the production period of cars, the expansion period of export and the balance and development period of present.The forth chapter is the cooperation and innovation of Japan's auto industry, in which the author asserts that Japan's making industry with auto industry as its head has made a prominent achievement innovation. He thinks that Japan has invented an innovative model of its own, which came into existence through the absorption and use of the advanced technology and experience from Europe and the U.S. This innovative model is nothing but the reason for Japan's auto industry to surpass its counterparts in Europe and the United States. In fact, this model is also an innovation in management, and it can solve the paradox both in technology and organization.The fifth chapter is the research and development network of Japan's auto industry, which discusses seriation between Japan's auto plants. Seriation means that auto plants mutually hold stocks. Seriation is of great help for the efficient allocation of resources, and for the cooperation and competition between suppliers. Suppliers of parts are also important in Japan's auto industry.The sixth chapter is the innovation of recycling economy in Japan's auto industry. Nowadays, the idea of sustainable development has been fully accepted in the whole world, which finds its best expression in the views of recycling economy, low-carbon economy and constructing environment-friendly society China put forward. China should imbibe as more as possible from Japan's recycling economy as shown in its auto industry.The seventh chapter is the joint research and development of Toyota. Toyota is the largest auto maker in Japan. In 2008, it sold as many as 8970,000 automobiles and became the largest auto plant in the world. The case study is supposed to identify and clarify"Toyota Production,""JIT","Lean Production,"and"Zero Inventory Management."In this chapter, the author tries to discuss the cooperative innovation of Toyota by taking the designing and making of Lexus as a case.The eighth chapter is a reexamination of innovation in Japan's auto industry in terms of Toyota Recall Incident. Toyota Recall Incident is one of largest incidents in the world economy in 2009 and 2010. It is the big crisis in Toyota's history. Through this recall, people began to reexamine the lean production for which Japan making is famous. People question why Toyota, which has been well-known for its quality, is involved in quality issues. The author discusses what goes behind this recall incident.The ninth chapter is the suggestions on the innovation in China's auto industry. On the basis of the innovation in Japan's auto industry, the author makes suggestions as to the innovation in China's auto industry. He argues that China should exercise its advantages to promote and realize its auto economy. The government should also try to lend support to auto industry so as to increase China's competitiveness in auto industry. China should also learn lesson from Toyota Recall Incident, and try to better the system of auto recall in China.
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