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Japanese firms are importing more goods

For over a century Japan has become renowned for exporting a lot and importing very little, the age-old mantra being, ‘what is sold in Japan sho...

Freddie Pierce
|Aug 31|magazine6 min read

 

For over a century Japan has become renowned for exporting a lot and importing very little, the age-old mantra being, ‘what is sold in Japan should be made there’. However, recent studies reveal that Japanese companies, including manufacturing giants Nissan are increasingly building products abroad owing to a stronger yen, an ageing workforce and improved skills overseas.

Could the Japanese manufacturing boom be nearing an end? 

In 2010 Nissan made the decision to import foreign-made vehicles, which set a president for others including cosmetic company Shisedo and electronics manufacturer Toshiba. Recent government figures suggest that imports from overseas plants have more than doubled in the last decade and have jumped by a massive 31 percent in the last two years alone. Further, the Japanese government records a 61 percent gain in total imports over the last 10 years.

Speaking of the increase, Masato Sase, an auto industry analyst at Deloitte Tohmatsu Consulting in Tokyo told the Detroit Free Press, “Nissan's decision was epochal. Before then there was a tacit assumption that cars sold in Japan would be made in Japan.”

The shift reflects a monument change in the country’s industrial strategy, which since the 19th century has revolved around a ‘made in Japan’ model. This new wave of manufacturing could see companies move operations abroad to spark competitiveness.

According to reports, next month Shiseido will introduce to domestic customers its Za range of makeup made in Taiwan and Vietnam. Kubota, Japan's largest tractor manufacturer, started domestic sales of its Chinese-made rice-planting machines and US-built lawnmowers last year.

Toshiba ended domestic fabrication of its Regza TV sets last fiscal year after almost half a century of production at home and Panasonic, Japan's biggest appliance manufacturer, shifted all its production of mobile phones to factories in Malaysia and China ‘to improve price competitiveness’.

Japan's manufacturers will make a record 39 percent of their products overseas in the year through March 2015, up from 33 percent two years ago, a Japan Bank for International Cooperation survey showed in December.

It is highly likely that Japan will remain one of the world’s largest manufacturers, particularly for high-end products, however the lure of shifting production abroad will come at a cost. Analysts predict Japan will lose more than four million manufacturing and construction jobs this decade bringing the factory based workforce to an all time low. Could this shift be the beginning of the end for Japanese manufacturing?

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