Manufacturing in Japan

Japan's majorexportindustries includeautomobiles,consumer electronics(seeElectronics industry in Japan),computers,semiconductors,copper, andiron and steel. Additional key industries in Japan's economy arepetrochemicals,pharmaceuticals, bioindustry,shipbuilding,aerospace,textiles, andprocessed foods.
The Japanese manufacturing industry is heavily dependent onimportedraw materialsandfuels.Japanese manufacturing and industry is very diversified, with a variety of advanced industries that are highly successful. Industry accounts for 19.4% (2022) of the nation's GDP.The country's manufacturing output is the third highest in the world.
Well-known Japanese manufacturing and tech companies includeToyota,Hitachi,Mitsubishi Heavy Industries,Mitsubishi Electric,Nissan,Honda,Fujitsu,Yamaha,Epson,Toshiba,Sony,Panasonic,Nintendo,Sega,Nippon,Takeda Pharma,Mazda,Subaru,Isuzu,Komatsu,Sharp,Nikon,CanonandNEC.
In 2018, the top TWO export markets for Japan were:South Korea,Thailand(Nippon Steel,JFE SteelandKobe Steel) accounting for 85.25 million metric tons, or 82 percent of total 2018 production, based on available data.
The iron and steel industry of Japan is mainly concentrated in the Tokyo-China region,Chukyo region,Osaka - Kobe,Fukuoka-Yamaguchi,Oka-YamahaandHokkaido regioncontributes about 20 per cent of the Japanese steel production.Major cities in where steel industries based areKobe,OsakaandKitakyushu.
Japan dominated worldshipbuildingin the late 1980s, filling more than half of all orders worldwide.Its closest competitors wereSouth KoreaandSpain, with 9 percent and 5.2 percent of the market, respectively.
The Japanese shipbuilding industry was hit by a lengthy recession from the late 1970s through most of the 1980s, which resulted in a drastic cutback in the use of facilities and in the work force, but there was a sharp revival in 1989.The industry was helped by a sudden rise in demand from other countries that needed to replace their aging fleets and from a sudden decline in theSouth Koreanshipping industry. In 1988, Japanese shipbuilding firms received orders for 4.8 million gross tons of ships, but this figure grew to 7.1 million gross tons in 1989.
Although facing competition from South Korea and China, Japan retains a successful, advanced shipbuilding manufacturing industry.Japan lost its leading position in the industry to South Korea in 2004, and its market share has since fallen sharply.
Thebiotechnologyandpharmaceuticalindustries experienced strong growth in the late 1980s. Pharmaceutical production grew an estimated 8 percent in 1989 because of increased expenditures by Japan's rapidlyaging population. Leading producers actively develop newdrugs, such as those for degenerative andgeriatricdiseases. Pharmaceutical companies were establishing tripolar networks connectingJapan, theUnited States, and WesternEuropeto co-ordinate product development. They also increasedmergerandacquisitionactivity overseas.Biotechnologyresearch and developmentwas progressing steadily, including the launching ofmarinebiotechnology projects, with full-scale commercialization expected to take place in the 1990s.
Biotechnology research covered a wide variety of fields:agriculture,animal husbandry,pharmaceuticals,chemicals,food processing, andfermentation. Humanhormonesandproteinsfor pharmaceutical products were sought through genetic recombination usingbacteria.
Biotechnology also is used to enhance bacterialenzymeproperties to further improveamino-acidfermentationtechnology, a field in whichJapanis the world leader. The government cautions Japanese producers, however, against overoptimism regarding biotechnology and bioindustry. The research race both in Japan and abroad intensified in the 1980s, leading topatentdisputes and forcing some companies to abandon research. Also, researchers began to realize that such drug development continually showed new complexities, requiring more technical breakthroughs than first imagined. Yet, despite these problems, research and development was still expected to be successful and to end in product commercialization in the mid-term.
In 2006, the Japanese pharmaceutical market was the second largest individual market in the world. With sales of $60 billion it constitutes approximately 11 percent of the world market.The Japanese Pharmaceutical Industry and Lawsare very particular. They are ruled by The Ministry of Health, Labor, and Welfare which was established by a merger of the Ministry of Health and Welfare and the Ministry of Labor, on January 6, 2001, as part of the Japanese government program for re-organizing government ministries.
Thepetrochemical industryexperienced moderate growth in the late 1980s because of steady economic expansion.The highest growth came in the production ofplastics,polystyrene, andpolypropylene. Prices forpetrochemicalsremained high because of increased demand in the newly developing economies ofAsia.
By 1990, the construction of factory complexes to makeethylene-based products in theSouth KoreaandThailandwas expected to increase supplies and reduce prices. In the long term, the Japanese petrochemical industry is likely to face intensifying competition as a result of the integration of domestic and international markets and the efforts made by other Asian countries to catch up withJapan.
Themotor vehicleindustry is one of the most successful industries in Japan, with large world shares in theautomobile,electric vehicle,electronics, parts,tireandenginemanufacturing industries. Global Japanese motor vehicle companies include:
Densois the world's largest company in automotive component manufacturing. In addition,Honda,Suzuki,YamahaandKawasakiare global motorcycle companies.
Japan is home tosix of the top ten largest vehicle manufacturersin the world. For example, it is home to multinational companies such asToyota,Honda,Nissan,SuzukiandMazda. Some of these companies cross-over to different sectors such aselectronicsto produce electronic equipment as some of them being a part ofkeiretsu. Japan'sautomobilesare generally known for theirquality, durability,fuelefficiency and more features for a relatively lower price than their competitors.
Japanese automakersMitsubishiandToyotahave had their patents violated by a number ofMyanmarcar companies, such asUD Group (Mandalay)andKyar Koe Kaung (Yangon). These companies producedMitsubishiandToyotaproducts including Mitsubishi Pajero, Toyota TownAce pickup trucks and other various types of Japanese cars under their ownmarques(e.g., Khit Tayar Pajero, Shwe Surf, UD Light Truck and KKK Light Truck) without license.
In 1991,Japanproduced 9.7 millionautomobiles, making it the largest producer in the world; theUnited Statesin that year produced 5.4 million. Just under 46 percent of the Japanese output was exported. Automobiles, other motor vehicles, and automotive parts were the largest class of Japanese exports throughout the 1980s. In 1991 they accounted for 17.8 percent of all Japanese exports, a meteoric rise from only 1.9 percent in 1960 with kaya being one of the largest exporters.
Fear ofprotectionismin theUnited States(in the wake of the 1973 Arab Oil Embargo where Japanese automobile manufacturers began exporting automobiles en masse) led to majordirect foreign investmentin the U.S. by Japanese automobile manufacturers. By the end of the 1980s, all the major Japanese producers had automotiveassembly linesoperating in the United States:Isuzuhas a joint plant withSubaru; one ofToyota's plants is inAlabama. Following the major assembly firms, Japanese producers of automobile parts also began investing in theUnited Statesin the late 1980s, most Japanese auto parts are nevertheless made in Japan.
Automobileswere a major area of contention for theJapan-United States relationshipduring the 1980s. When theprice of oilrose in the1979 energy crisis, demand for small automobiles increased, which worked to the advantage of Japan's exports to theUnited Statesmarket. As the Japanese share of the market increased, to 21.8 percent in 1981, pressures rose to restrict imports from Japan. The result of these pressures was a series of negotiations in early 1981, which produced a voluntary export agreement limiting Japan's shipments to the United States to 1.68 million units (excluding certain kinds of specialty vehicles and trucks). This agreement remained in effect for the rest of the decade, but Japanese competition only increased with new plants being built and
with the export agreement being voluntary. The JapaneseBig Three(Toyota, Nissan, Honda) also sold luxury automobiles similar to its European counterparts (BMW, Audi, Mercedes, Jaguar) where it was possible to yield profits - since the parent companies had a connotation as an econobox manufacturer with their mass market automobiles, they established their stand-alone luxury marques (Lexus, Acura, Infiniti) where the parent company marketed the same product as a JDM (Japanese Domestic Model). The luxury marques (sold initially for the USA market) may not have their own brand language or brand identity of its own since they are often associated with their parent companies. Similar voluntary restraints on Japanese exports were imposed byCanadaand severalWest Europeancountries. Nonetheless, Japanese car competition only increased due to new plants being built and with the export agreements being voluntary. Since then, tensions have greatly decreased. Canada and Western Europe, like the U.S., repealed restrictions on Japanese auto imports. Nissan has an assembly plant inSunderlandin England.
Foreign penetration of the automotive market in Japan has been less successful partly because of the population density and limited space of the country. Imports of foreign automobiles were very low during the forty years prior to 1985, never exceeding 60,000 units annually, or 1 percent of the domestic market. Trade and investment barriers restricted imported automobiles to an insignificant share of the market in the 1950s, and as barriers were finally lowered, strong control over the distribution networks made penetration difficult. The major United States automobile manufacturers acquired minority interests in some Japanese firms when investment restrictions were relaxed,Fordobtaining a 25 percent interest in Toyo Kogyo (Mazda),General Motorsa 34 percent interest inIsuzu, andChryslera 15 percent interest inMitsubishi Motors. This ownership did not provide a means for United States automobiles to penetrate the Japanese market, and the American car companies eventually got rid of their shares of the Japanese carmakers. One concern was that the USA market automobiles sold in Japan were imposed a taxation bracket due to vehicle sizing and engine displacement - which affected sales.
After the strong appreciation of theyenin 1985, however, Japanese demand for foreign automobiles increased, but with most cars imported from Germany. In 1988, automobile imports totaled 150,629 units, of which 127,309 were European, mostly West German. Only 21,124 units were imported from the United States at that time.
Theaerospaceindustry received a major boost in 1969 with the establishment of the National Space Development Agency (nowJapan Aerospace Exploration Agency), which was charged with the development ofsatellitesandlaunch vehicles.
The Japanese military industry, although a small share of GDP, is a major sector of the economy.It is technologically advanced and is very successful, and has produced such aircraft as the new Mitsubishi fighter planned to be launched.ASIMOis an advancedhumanoid robotmanufactured byHonda Company.
The production value of thefood industryranked third among manufacturing industries after electric and transport machinery. Japan produces a great variety of products, ranging from traditional Japanese items, such as soybean paste (miso) andsoy sauce, tobeerandmeat.
The industry as a whole experienced mild growth in the 1980s, primarily from the development of such new products as "dry beer" and precooked food, which was increasingly used because of the tendency of family members to dine separately, the trend toward smaller families, and convenience.
A common feature of all sectors of the food industry was theirinternationalization. As domestic raw materials lost their price competitiveness following the liberalization of imports, food makers more often producedfoodstuffsoverseas, promoted tie-ups with overseas firms, and purchased overseas firms.
In 2004, the Japanese food industry was worth $600 billion whilst food processing was worth $209 billion. This is comparable to the food industries of theUnited Statesand theEU.They also develop an abundance of sugar confectionery products.
Japan has 7  of top 20 largestchipmanufacturers as of 2005. Japanese electronics  are known for theirquality, durability, and technological sophistication. Some of these companies cross over toautomobileandfinancesectors as part of akeiretsu. Many of the world's majorelectronicscompanies are based inJapan, includes:
Japan's computer industry developed with extraordinary speed and moved into international markets. Japanese computer technologies are some of the most advanced in the world. The leading computermain framemanufacturers inJapanat the end of the 1980s (in the domestic market) wereFujitsu,Hitachi,NEC, IBM Japan andUnisys. Leading personal computer manufacturers wereNEC,Fujitsu,Seiko Epson,ToshibaandIBM Japan.
In 1988, Japan exported US$1.5 billion of computer equipment, up more than twelvefold from the US$122 million in 1980. Japanese firms were not very successful in exportingmainframecomputers, but they did very well inperipheralequipment, such asprintersandtape drives. In the rapidly growingpersonal computermarket, Japan achieved a major market share in theUnited Statesduring the 1980s. Imports of computer equipment in 1988 came to US$3.2 billion (including parts).
Economic developments, namelyoutsourcingandglobalizationmade these disputes obsolete by the 1990s. Japanese and U.S. influence in the computer market dwindled, withTaiwaneseandmainland Chinesecompanies taking overcomponentproduction and laterresearch and development.