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Machinery & Tools Japan 2008
1.
Machinery
& Tools Japan Market Reports © G&S International Japan 2007. All rights reserved. Partner in Japan G&S International Japan 6-4-13 Soshigaya, Tokyo Setagaya-ku 157-0072 Japan Web www.gs-int-ltd.com
2.
Japan 2007 “In Japan,
machines must be adjusted …” "In Japan muss man eine Maschine anpassen!" The trade journal VDI reported this statement on the findings of a study on German companies in Japan conducted by Roland Berger Strategy and the German Chamber of Commerce in Japan (DIHKJ). According to the study, German companies find it easier to be profitable in Japan than is generally expected (2006). There are good growth opportunities in particular for traditional engineering industries such as engineered products or environmental and medical technology. Made in Germany has an extraordinary good image when it comes to machinery, machine tools and related technology. Japanese users appreciate the German quality. Source: VDI Nachrichten 2006 2 © G&S International Japan 2007. All rights reserved.
3.
Japan 2007
Machinery market facts & potentials & obstacles In Japan, machine tools must comply with JIS and ISO standards. The Japan Industrial Standards (JIS) define machine tools, in the narrow sense, as tools for shaping mainly metal articles into a desired shape by cutting, grinding or removing unnecessary portions using electricity or other forms of energy, but excluding tools that are handheld during use or held in position by magnetic stands or similar devices. In Europe and North America, machine tools are interpreted more broadly to include presses and woodworking tools. Machine tools in Japan may be broadly divided into three main categories: a) Lathe types: lathes (machines for shaping & rotating work) b) Milling types: milling machines, machining centers, drilling machines c) Grinding types: grinders, planning machines (finishing process), tec. other types: laser processing machines, electrical discharge grinders, etc. Output, exports and imports of Japanese machine tools over the past years have been as follows (note: 1 USD = 112 JPY): Source: Japan Machine Tool Builders' Association 3 © G&S International Japan 2007. All rights reserved.
4.
Japan 2007
Japan machinery & tools market outlook Machinery & tools in Japan are mainly sold directly to end-users and via specialist trading companies. Manufacturers that export overseas are all covered by product liability insurance. Although there are apparently occasionally major incidents, these are generally resolved individually by the companies concerned. 60-70% of parts are procured from external sources. Despite the high cost of the products themselves, margins are rather thin for Japanese makers due to the fierce international competition and level of labour costs. Regarding the outlook for the future, the Japanese machine & tool manufacturers' considerable technological edge will continue to give them an advantage for the time being. Growth in sales to the IT industry has run its course, however, and hopes are pinned on increased sales in the future to overseas automakers and semiconductor manufacturers. Machinery imports to Japan are increasing … In 2004, imports of machinery and equipment (yen base) increased 10.2% from the previous year to ¥15,393.9 billion, while the share of imports of machinery and equipment in the total imports decreased by 0.2 points to 31.3% from the previous year. Looking at the type of machinery imported, we see that imports of general machinery increased 10.0%, electrical equipment increased 12.9%, and transportation equipment and precision instruments increased 3.1% and 8.4% each from the previous year. The share of general machinery in the total imports of machinery and equipment was 33.6%, same with the share in the previous year. The share of electrical equipment increased 1.1 points from 43.4% to 44.5%. On the other hand, the share of transport equipment decreased 0.9 points from 13.4% to 12.5%, and precision instruments decreased share 0.2 points from 9.6% to 9.4%. 4 © G&S International Japan 2007. All rights reserved.
5.
Japan 2007
Imports in the Machinery Industry (by type, in thousand USD, not including electronics) Weight of machinery equipment imports (2004, in billion JPY) 5 © G&S International Japan 2007. All rights reserved.
6.
Japan 2007 Looking at
the change of 2004 imports from the year earlier for 5 main countries, it was unchanged for U.S.A., 23.7% increase for China, 7.5% increase for Taiwan, 11.0% increase for R. Korea, and 16.2% increase for Germany. Germany increased imports to Japan by 16 % … Looking at the share of imports of machinery and equipment by country, the United States, from which the most machinery had been imported, had seen its share of total imports exhibit a growing trend from 1996 to 1998. But since 1999 when U.S. share fell sharply to 33.9%, U.S. share continuously fell to 29.5% in 2000, to 27.7% in 2001, to 25.7% in 2002, to 22.6% in 2003, and it fell to 20.5% in 2004, and China came to the top share position with 26.1% in 2004. By region, the share of North America fell 2.3 points from 23.4% in the previous year to 21.1%, while the share of Asia increased 2.5 points from 56.4% in the previous year to 58.5%. 6 © G&S International Japan 2007. All rights reserved.
7.
Japan 2007
Imports of Machinery and Equipment by area (though dollar base) Weight of investment in plants and equipment by sector in Japan 7 © G&S International Japan 2007. All rights reserved.
8.
Japan 2007
G&S International Japan services G&S Japan are providing on market entry support and marketing/ sales services for European companies in Japan. The firm assist enterprises especially from Europe that do object to market – expand -- start their business operations in Japan. Japan We provide professional support for Japan business development: market research & marketing intelligence Marketing sales partner sourcing & partner negotiation marketing & direct sales Experts logistics & import services e-commerce & web development start-up coordination & turn-around management HR recruiting & interim management firm representation & PR management We are very experienced in the above fields and hold excellent client references. You are welcome to discuss your Japan business perspectives and objectives with us. Feel free to contact us today! We look forward hearing from you! G&S 8 © G&S International Japan 2007. All rights reserved.
9.
Japan 2007
Japan -- Business opportunities in 2007/2008 1. Japan - the world's 2nd largest economy Japan boasts dynamic business activities coupled with robust personal High productivity and strong purchasing power make Japan an attractive market. consumption. 8 Advantages of 2. One of the world's top markets Japan is a promising market, with a market scale ranking among the top in the developed nations, in fact investing or the 2nd biggest consumer market worldwide. 3. Strong purchasing power Supported by high personal savings, the Japanese market has the potential to maintain its strong trading with Japan purchasing power in the future. 40% of all luxury goods worldwide are sold in Japan every year. 4. Highly advanced technology Japan's high level of technology, supported by its vigorous investment in research and development (R&D) is one of the sources of Japan's competitiveness. 5. Highly skilled human resources Japan's national labour market has abundant highly-skilled human resources. In addition, the advancement of lab or market liquidity is facilitating the recruitment of highly-qualified staff. 6. Highly developed infrastructure Japan enjoys an advanced ICT and logistics network. ICT infrastructure at the cutting-edge of technology - Japan has the world's fastest and most cost-effective broadband environment and is rapidly moving towards the goal of becoming a real IT-oriented society. 7. Lowered business costs Recent years have seen the cost of doing business in Japan decrease – real estate prices, communication costs, labour costs, logistics costs, and others have decreased dramatically. 8. Successful investment in Japan Many foreign-owned affiliates in Japan have achieved profitability, and are making a success of their investment in the Japanese market. 9 © G&S International Japan 2007. All rights reserved.
10.
Japan 2007
Japan -- Main economic figures 2006 Japan Germany (Bank of Japan, 2006) (Deutsche Bunderbank,12/2006) Population 127.7 million 82.5 million Total Area 377.9 tkm² 357.0 tkm² GDP, nominal 4.668.7 billion USD 2.745.5 billion USD GDP, change rate +3.7% +2.5% GDP, per employee 36,140 USD 31,400 USD Consumer prices, change rate -0.1% +1.4% Unemployment Rate 4.1% 9.6% Employed person 63.1 million 39.6 million Currency ¥ (yen) € (euro) Japan is the 2nd strongest economy & market worldwide after the USA GDP by country (in %, billion USD, 2005) Per capita GDP in the G7 countries (USD, 2005) 10 © G&S International Japan 2007. All rights reserved.
11.
Japan 2007 Can small
/ medium sized businesses gain profits from Japan? The answer is “YES.” -- Because the Japanese love foreign products. Years ago, “foreign products” or “imported products” meant “quality products” in Japanese. Today the situation has slightly changed (as the shares of the Western products has been lowered in the whole imported products), but the stores are still full of foreign products and foreign brands. Still, many of the Japanese consider foreign brands more trustable than Japanese, with a few exceptions such as high-tech appliances. In consumer goods (such as housing, household, life-style, fashion, cuisine, food, etc) -- as well as in industrial technology (such as machinery, tools, medical devices, biotechnology, materials, system engineering, environment technology, etc) -- besides other fields … the Japanese prefer to buy fashionable foreign products or count on sophisticated foreign technology. Important factors on preparing for business in Japan Consider a partner company. There are nine giant trading companies, and hundreds of smaller ones. These companies might serve as your source of market information, your distributor, and your guide in Japan. They can introduce you to Foreign products are Japanese customers, and potential business associates will be invaluable. selling well in Japan Understand the market in Japan. Think about how you can tailor your product to meet Japanese requirements and specifications. Your Japanese clients will want products that satisfy their needs, and a supplier who is interested in their requirements. Japanese buyers want products that have a substantial international image. Patience counts. The purpose of your first meeting with your potential client in Japan is to obtain a second meeting. Don't expect to close a deal without taking many steps to building a relationship. Your potential clients, customers and business partners in Japan want to know you as a reliable firm, and a reliable individual, before they will take the step of giving you business. Persistence pays. Japanese firms are not likely to make snap decisions on product selection. Expect your business development to take about 2-3 times longer than it does at home. That is why you will need to focus on relationship building, along with sales activities. Performance is paramount. Products must be delivered as promised, on time, and in accordance with specifications. Late delivery, improper packing, missed specifications and the alike will cost you your business in Japan easily. 11 © G&S International Japan 2007. All rights reserved.
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Japan 2007
References & Sources JETRO Japan External Trade Organization DBJ Development Bank of Japan METI Ministry of Economy, Trade and Industry MHLW Ministry of Health, Labour and Welfare MITI Ministry of International Trade and Industry Arigato! JIEA Japan Import and Export Association JMA Japan Machinery Federation Thank you! JMTBA Japan Machine Tool Builders Association JMTDA Japan Machine Tool Distributors Association Feel free contacting us today! We’d be delighted to lead you & your products into the Japanese market, a very exiting market with lots of opportunities! 12 © G&S International Japan 2007. All rights reserved.