Japan’s new export market is none other than itself

Article by Christian A., on September 3, 2012

Japan automakers used to strictly follow the mantra that products sold in Japan are made in Japan. But now, several products are being built abroad and are being shipped home due to the strengthening yen, aging workforce and the improved skills of overseas workers. It appears that Japan’s new export market is none other than itself. Nissan Motor Co. made this decision in 2010, paving the way for other automakers to import foreign-made vehicles.

Two of the largest companies in Japan -- Shiseido Co. and Toshiba Corp. – also took the plunge. According to government data, the shipments from the overseas plants of Japanese producers have more than doubled and have broken records. There was a 31% increase in the last couple of years, compared with a 61% increase in total imports over the past decade.

Masato Sase, an auto-industry analyst and partner at Deloitte Tohmatsu Consulting Co. in Tokyo, referred to Nissan’s move as “epochal.” The trend represents one of the most major departures from an industrial strategy, started by the Meiji leaders who drove out the last shogun in 1868 and established western-style plants, says Bloomberg. The global competitiveness of manufacturers may receive a boost with having a “made by Japan” model but they’d have to sacrifice jobs at home.

They will be perceived to have a lower regard for nationalism and this will deepen deflation pressures. Shiro Kakinuma, a salesman at Taiyo Nissan Auto Sales Co.’s Shibaura Chuo showroom in Tokyo, which sells the Nissan March subcompact that’s made in Thailand, said that people consider the shift as “a sign of the times.” He said that the quality of the new March was cast in doubt at first but this isn’t the case anymore.

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