ABSTRACT
This chapter traces progressive emergence of product variety in the history of the Japanese automobile industry, based on a statistical analysis of the subject. It explores how the Japanese automobile industry has been developed on the basis of a systematic quest for critical mass, combining the various beneficial effects of large size, with a gradual diversification of product range. Beyond the management of product variety, it is necessary to reveal the different combinations of volume and variety effects on which Japanese producers have based their strategies. The chapter analyses the form of production flexibility which is in fact specific to the Japanese industrial model. The Toyota system is the only one able to benefit from the several forms of production flexibility. As in each organisational improvement, Toyota focused on realising economies through the modernisation and rationalisation of its suppliers.
