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More and more signs indicate that Japan is losing its dominant position in the global supply chain, and the high-end manufacturing industry is accelerating its decline.
A clear signal is that since 2018, more and more Japanese overseas companies have retreated back to their hometowns, or have begun to engage in mid- and low-end manufacturing industries that they had despised before.
For example: In the past two years, Canon has closed several factories in China and ASEAN , and moved all the production lines back to Japan; this has led to the increase in the proportion of Toyo's local production capacity in its global production capacity from 40% to 60-70%.
. Canon moved its production line back to Japan not because of the low labor costs in Japan or the developed supply chain; it was just because Canon's digital camera market was replaced by smartphones with ultra-definition cameras; the printing and copier markets were also seriously eroded by the file transfer function of Internet software, and Canon's global market shrank severely.
In 2007, Canon's global revenue was US$39 billion; by 2021, this figure dropped to US$30.5 billion, a drop of 22%. If inflation factors are taken into account, the "Canon 2007 global revenue" that translates to purchasing power parity in 2021 is as high as US$50.7 billion, and Canon's global revenue shrank by as much as 39.8% in 15 years (2007-2021).
As the global market shrinks, revenue plummeted, Canon has no financial resources to maintain the normal operation of overseas factories. It can only shrink its front line and concentrate its production capacity on the local level; to save costs, cut off the tail and survive.
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Another example: "Yannoyi Pharmaceutical Co., Ltd.", which ranks the top five in Japan's pharmaceutical industry, will launch the "antibiotic raw material production line" in Iwate Prefecture, Honshu Island this year (2022); the initial production capacity of this production line will reach 370,000 tons/year, and will expand to 500,000-1 million tons in 5 years.
You should know: Before Shinoyi Pharmaceutical set up the " pharmaceutical raw material production line" locally, Shinoyi Pharmaceutical and most other Japanese pharmaceutical companies needed were imported. Japanese pharmaceutical companies were only responsible for the early research and development, as well as the final high-profit links such as drug synthesis and finished product sales.
Pharmaceutical raw materials are not very popular due to the low technical requirements and the profit is too small. Japanese pharmaceutical companies do not pay much attention to it.
In the 2000s, Japan's pharmaceutical industry was once very strong, accounting for as much as 12% of the global pharmaceutical market, and they were both finished drugs with high profits; however, by 2019, the share number had dropped to 7%, almost halved.
As Japan's pharmaceutical level declines, the competitiveness of Japanese finished drugs in the world has declined year by year. Japanese pharmaceutical companies have to engage in the business of "production of raw materials that they were not despised before" to maintain revenue scale; to put it bluntly, it is just to survive.
again and again: Some of the " labor-intensive industry " that we remember, such as clothing manufacturing, also have cases of returning to Japan.
According to the "Japan Sankei Shimbun", the shoes and clothing sold by Japanese clothing giant WORLD have achieved 40% localized production; in 3-5 years, the localization rate will approach 100%; all outsourcing production lines of WORLD in China and Vietnam will be closed.
At the same time, Japanese fashion giant TSI Holdings also plans to increase the localized production ratio of its products to 30-50%; by the end of 2021, TSI Holdings' localized production ratio is less than 10%.
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From the above three examples, we can also draw three ways for Japan's high-end manufacturing to decline rapidly.
First: Due to Japan's defeat in the latest round of industrial revolution (smartphones + mobile Internet), Toyo companies have lost most of the global consumer electronics (mobile phones, cameras, PC computers, etc.) market. Sony Walkman and Canon cameras have been replaced by Apple , Huawei , OV smartphones.
Canon, Sony and other former Japanese companies have to close overseas factories and gather all production capacity to survive.
market has shrunk to "Japan's local production capacity can meet global demand."
Second: Because Japan lost some of its technological competitiveness in the field of high-end manufacturing, Japanese companies had to condescend and reduce their popularity and began to engage in mid-range manufacturing that they were not very popular before.
As we said in the previous article, "Shino Yoshi Pharmaceutical, Meiji Holdings Pharmaceutical and other pharmaceutical giants" have begun to engage in the production of pharmaceutical raw materials and compete for business with China and India.
Third: Due to the drastic decline in Japan's industrial strength, there are not many high-end manufacturing that can be controlled; so some Eastern people are willing to reduce their identities and engage in labor-intensive industries such as the textile industry.
This reflects a cruel fact: Although the saying "Japan industry has only cars left", "is indeed" highlights the dilemma facing Japan's high-end manufacturing today.
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If the bursting of the economic bubble in 1990 was the starting point of the decline of Japan's industrial strength; since 2018, "Japanese overseas companies' retraction and the collapse of high-end manufacturing" is a major turning point in the accelerated decline of Japan's industrial strength.
lost white appliances yesterday, and today lost consumer electronics and pharmaceuticals. Then I had to sleep all night, look at the four realms, and the competition between China, the United States and South Korea has arrived again.
When Japan's only remaining industrial ace (automotive manufacturing) is also facing the encirclement of China and the United States ( electric car ), " craftsman spirit ", "Japan only does high-end supply chain upstream", "There is also a Japan hidden overseas", the fact that Japanese industry is leaking everywhere.
heavy rain is coming, and there are not many good days left for the Japanese.
