The Korea Institute of Machinery and Materials (KIMM) diagnosed in a report analyzing the AI transformation strategy of the Japanese automotive industry that the standard for manufacturing competitiveness is shifting from "whether or not an organization possesses AI" to "the way an organization utilizes AI."

The Korea Institute of Machinery and Materials (KIMM) published the 123rd issue of *Machine Technology Policy* titled 'Current Status and Implications of Japanese Manufacturing AX – Focusing on the Automotive Industry,' presenting the AX (AI Transformation) and DX (Digital Transformation) strategies of the Japanese automotive industry and the response direction for the Korean manufacturing sector. The report also reflects the Japanese government's 'Mobility DX Strategy 2025,' announced on June 9, 2025, as a major policy trend.

According to the report, the Japanese automotive industry is utilizing AI not as a simple automation technology, but as 'Auxiliary Intelligence' that supports on-site experience and judgment. The key elements are Human-in-the-Loop, where humans participate in the decision-making process; Kaizen-driven DX, which combines on-site improvement activities with digital transformation; and Cultural Intelligence, which is the digitalization of organizational culture.

Toyota is reducing development time and enhancing field suitability through a citizen development system in which field workers directly develop applications and AI. In addition, it is expanding its collaborative decision-making culture, 'O-Beya,' into a multi-agent AI system to support the transfer of skilled knowledge and design decision-making.

Honda is expanding AX by visualizing data and improving decision-making structures through on-site DX. In particular, it is developing a "discussion-type AI" in which multiple AI agents collaborate based on "Waigaya," an evidence-based discussion culture, thereby implementing a collective intelligence-type decision-making structure for solving complex problems.

The scope of application for generative AI is also expanding beyond the production process to the early stages of design and development. Honda is utilizing natural language-based 3D design generation technology for design review, while Toyota is pursuing the reduction of design lead times through AI-based computer engineering and shape optimization technology.

The Korea Institute of Machinery and Materials suggested that the Japanese case has implications for the Korean manufacturing industry for field-oriented AI internalization, AX integration throughout the design, production, and quality lifecycle, the introduction of collaborative AI based on organizational culture, and the expansion of the industrial ecosystem. In particular, it was analyzed that a 'hybrid manufacturing AX model' combining Korea's physical AI strategy and Japan's human-centered DX is needed.

Kim Cheol-hoo, a senior researcher at the Machinery Policy Center of the Korea Institute of Machinery and Materials (KIMM), stated, “Japan is not merely adopting AI, but is redesigning its organization around AI,” adding, “In the future, manufacturing competitiveness will be determined by how organizations utilize AI, rather than by the technology itself.”