The auto industry must take the initiative to be more competitive until the benefits of Prime Minister Shinzo Abe's deflation-busting economic policies are fully felt, according to Akio Toyoda, chairman of the Japan Automobile Manufacturers Association.

"In a word, the industry (as a whole) needs to increase further competitiveness" to take advantage of Abe's aggressive economic plan, dubbed "Abenomics," Toyoda said in a recent group interview. "It all depends on strengthening global competitiveness while maintaining the competitive edge of domestic production and development bases."

Abe is advocating radical monetary easing, public works spending and growth strategies to encourage private investment.