Insights Into Japanese Plants in US

Here are some useful summary statistics on Japanese manufacturers in the US. This is useful market intelligence for those of you eager to see your existing Japanese companies expand or if you are seeking to attract new investments from Japanese companies.

JETRO, the Japanese External Trade Organization, publishes an annual survey of Japanese manufacturing plants in the US. The chief findings of the 2002 operating year report (published in 2003) are:

1. Just under 2,000 Japanese plants exist in the US now, which has declined below 2,000 for the first time in 4 years.

2. Two-thirds of these plants were making a profit, which is up from the previous three operating years.

3. Just under 50 percent of the plants expected to see a rise in profitability in 2003 over 200. Another 36 percent expected 2003 profits to be comparable to 2002.

4. 42 percent said their capital investments in their US-based operations would remain the same in 2002 and another 31 percent increased investments in 2002.

5. Two-thirds of the plants purchased at least 50 percent of their materials and supplies from US suppliers, which can include other Japanese companies operating in the US. Another 53 percent purchased at least 70 percent of their materials and supplies from US based sources.

6. US-based Japanese plants increased purchases from sources in China, other Asian NICs, and Mexico in 2002. Many expected to increase their purchases from China and Mexico in 2003.

7. Nearly 70 percent of these plants export a portion of their US based production. Key export markets include: Mexico, Europe and Canada.

8. When asked what types of operations these companies had in the US, they gave these replies:

- Regional headquarters: 99.2%
- Sales office: 99.1%
- Finished product mfg.: 96%
- Component mfg.: 94%
- R&D/Design: 88%

9. 48 percent of the plants saw growing competition from Chinese imports into the US that was either placing price pressure on Japanese companies in the US or was causing a decline in sales.

10. Nearly 600 (30%) or the 2,000 Japanese plants operated in the US were concentrated in the states of Ohio, Indiana, Michigan, Illinois, and Kentucky. The majority of which were transportation equipment (motor vehicle-related) producers.

These numbers point to the significance of the US as a production platform and market for Japanese companies. The US is vitally important to Japanese companies. The numbers also indicate that more Japanese companies are exporting from US plants and that these plants are experiencing increased competition from Chinese production facilities. Finally, they tell us that the Japanese companies here are operating a diverse array of facilities, including R&D operations.

Go here to download the report.