The purpose of this paper is to consider important factors and appropriate policies in the development of the Polish passenger car industry, compared with Japanese experience of government intervention policies and remarkable development in the passenger car industry after the World War 11, 1951-1971. The situation both internationally and domestically in the development of the Japanese passenger car industry was extremely different from the current situation for the Polish industry. It is very difficult to simply compare the two cases. However, investigating important driving forces and appropriate methods in the expansion of the passenger car industry seems to be a helpful work. From the Japanese experience (and even when we examine the 'infant industry' discussion seriously in the Polish case) a subsidy policy should be preferred to import regulation policies because, in a case of import regulation policies a terms of trade differs from a domestic price ratio and the difference lowers a level of the Polish national welfare. Especeally, in a case of mixed policy of import regulation policies with attracting internal direct investment policies, the method is undoubtedly to be inferior. When focusing on internal direct investment, from the Japanese experience of remarltable development, an extremely important consideration for Poland is to raise competition in the domethtic market to get a higher share among the ddmestic suppliers jointly producing with foreign manufacturers. Also from the Japanese experience, a rapidly expanded domestic market led by good macro economic performance was another essential factor. Therefore, the basic things needed to expand the passenger car industry are successful measures for a good macro economic performance.