The Rise and (Everlasting?) Fall of Japan's Manufacturing
An interesting statistics has just been released by the JEITA(Japan Electronics and Information Technology Industries Association), whose objective is, according to them, "to promote the healthy manufacturing, international trade and consumption of electronics products and components in order to contribute to the overall development of the electronics and information technology (IT) industries, and thereby further Japan's economic development and cultural prosperity".
Don't understand? In essence, it's a group of Japan's electronics firms like Sony, Panasonic, or Toshiba.
What's interesting here is that Japan's imports of high-tech consumer products are, according to JEITA's latest release, supposed to exceed its exports last year, the first time since the statistics began in 2000.
This kind of story like "Japan is losing in manufacturing" isn't new unfortunately, but the current report looks like more revealing in the sense that the country has had to respond to domestic demand of its thought-to-be-dominant staples by import.
Some may think of this phenomenon as tentative, taking into account that the demand for TV rose sharply last year due to the government subsidies. Companies are in a rush to transfer their factories into other countries, especially Asia, to cut costs and circumvent rising yen, so the rise of imports seems inevitable.
In fact, looking at the component of consumer electronics, the trade balance of video equipments including TV declined precipitously in 2010, while audio equipments like radio have kept in favor of import since 2001. It's the government policy, not the country's competitive edge, some may think so.
"Made in Japan" products are, however, going to be much scarcer in the markets. Look at the other electrical products. According to the JEMA, another electrical industry group, the imports of home electrical appliance has surpassed exports since 2001. So, refrigerators, hair dryers, or microwaves that you find in Japan are likely to originate in the other countries, even if the company's brand is Hitachi or Panasonic.
Some Chinese come to Japan for "Made in Japan" products, which they think are superior to "Made in China" in quality. It generally ends up buying more Chinese products, though.
Can companies benefit from offshoring production? I don't think so. Japanese firms have already lost the share of their once-dominant products like semiconductor or LCD panel to their Asian competitors. Given shrinking domestic markets, they are in a hurry to switch into "overseas production, overseas sale", but up until now nothing has emerged to stop the tide of losing battle in the markets.
Basically, it's doubtful to succeed in the business in low-income countries by high-income countries. Products made in or by high-income countries should be costlier than those made in or by low-income countries. Can consumers in low-income countries afford to buy those expensive products? Some may buy it, but sales are supposed to be disappointing given the thin layer of the high-income class in low-income countries.
Japan is fighting in an unfavorable ground.
Don't understand? In essence, it's a group of Japan's electronics firms like Sony, Panasonic, or Toshiba.
What's interesting here is that Japan's imports of high-tech consumer products are, according to JEITA's latest release, supposed to exceed its exports last year, the first time since the statistics began in 2000.
This kind of story like "Japan is losing in manufacturing" isn't new unfortunately, but the current report looks like more revealing in the sense that the country has had to respond to domestic demand of its thought-to-be-dominant staples by import.
Some may think of this phenomenon as tentative, taking into account that the demand for TV rose sharply last year due to the government subsidies. Companies are in a rush to transfer their factories into other countries, especially Asia, to cut costs and circumvent rising yen, so the rise of imports seems inevitable.
In fact, looking at the component of consumer electronics, the trade balance of video equipments including TV declined precipitously in 2010, while audio equipments like radio have kept in favor of import since 2001. It's the government policy, not the country's competitive edge, some may think so.
"Made in Japan" products are, however, going to be much scarcer in the markets. Look at the other electrical products. According to the JEMA, another electrical industry group, the imports of home electrical appliance has surpassed exports since 2001. So, refrigerators, hair dryers, or microwaves that you find in Japan are likely to originate in the other countries, even if the company's brand is Hitachi or Panasonic.
Some Chinese come to Japan for "Made in Japan" products, which they think are superior to "Made in China" in quality. It generally ends up buying more Chinese products, though.
Can companies benefit from offshoring production? I don't think so. Japanese firms have already lost the share of their once-dominant products like semiconductor or LCD panel to their Asian competitors. Given shrinking domestic markets, they are in a hurry to switch into "overseas production, overseas sale", but up until now nothing has emerged to stop the tide of losing battle in the markets.
Basically, it's doubtful to succeed in the business in low-income countries by high-income countries. Products made in or by high-income countries should be costlier than those made in or by low-income countries. Can consumers in low-income countries afford to buy those expensive products? Some may buy it, but sales are supposed to be disappointing given the thin layer of the high-income class in low-income countries.
Japan is fighting in an unfavorable ground.
Labels: Japan
posted by Akihiro Gotoda at
1:50 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home