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Business trends

Japan suppliers break out of traditional auto groups to bulk up

Hitachi and Honda parts makers plan merger to marshal resources for R&D

The Honda Sports EV electric concept car. As automakers prepare for an electric, autonomous-driving future, Japanese parts makers are scrambling to keep up.   © Reuters

TOKYO -- As new technology shakes up the auto industry, Japan's midtier suppliers are breaking out of traditional alliances and joining to secure the resources and market share necessary to survive in a high-tech era.

Makers of conventional auto parts are being forced to adapt to the rise of connected, autonomous, shared and electric vehicles -- known by the acronym CASE -- even as revenue from their mainstay products dwindles. The merger of Hitachi and Honda Motor suppliers represents a new possible solution for Japan's players, which until now have remained loyal to their keiretsu -- a group of closely-knit suppliers dedicated to one specific automaker.

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