Manufacturing in Japan

Japan has a large and highly advanced manufacturing sector. Manufactured goods from Japan enjoy a well-earned reputation for high quality, durability and sophistication. Japanese automotive manufacturers such as Toyota, Honda and Mitsubishi are among the largest in the world. It is little surprise then that Japan is the third largest manufacturer of vehicles, producing 9,278,321 in 2015. Shipbuilding, robotics and electronics are other notable manufacturing industries in Japan.

While manufacturing has declined as a proportion of Japanese GDP over the past couple of decades, Japan still has a very large manufacturing base. In addition, Japanese manufacturers have extensive global links, especially in Southeast Asia, with many having substantial operations in countries like Thailand. 

Japan does not rely on low labour costs to remain a competitive location for manufacturing. Rather, it relies on innovative product design, high quality standards and a world-class manufacturing workforce to remain competitive. An Australian manufacturer looking to develop an innovative product and have it produced to the highest standards may find what they are looking for in Japan. Coupled with Japan’s excellent infrastructure and international trade links throughout Asia and beyond, manufacturing in Japan may prove to be a viable option for some. 

Contract manufacturing, though not common historically in Japan, is gaining popularity as a business model, especially as reforms in Japan make its economy increasingly open.

Manufacturing locations

With the economy dominated by services and manufacturing, economic activity in Japan is heavily concentrated in Japan’s cities.

Tohoku: Renewable energy, in addition to semi-conductor, automobile and medical equipment manufacturing, are being promoted as future growth engines for this region. Large cities 
in Tohoku include Sendai, Akita, Aomori, Fukushima, Morioka and Yamagata.

Chubu borders both the Kanto and Tohoku regions and is home to much of Japan’s advanced manufacturing, especially around Nagoya, the largest city in the region and home to automotive giant Toyota. Chubu accounts for 15 per cent of Japan’s GDP and produces about 25 per cent of its manufactured products.

Shikoku is the smallest of Japan’s four main islands, accounting for about 5 per cent of the nation’s total land area. Agriculture, fisheries and aquaculture are important contributors to the local economy, along with value-adding activities such as food processing. Shipbuilding, electronics and paper manufacturing are important secondary industries, while nanotechnology and biotechnology are growth sectors.

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