lecture-stillmadeinjapan.docVIP

PAGE  PAGE 16 Manufacturing in Japan (Still) made in Japan How are Japans manufacturers faring against low-cost competition from China? Apr 7th 2004 | TOKYO | from the print edition JAPANS manufacturing has been steadily moving overseas, most obviously to China. Among the reasons: wages in Japan are much higher, by a factor of between 20 and 30 times. Look more closely, however, and China is far from being the only threat facing Japans manufacturers. Individual Japanese companies talk as much about competitors in America and Europe as they do about China. Some are most concerned about the technological prowess of South Korean firms such as Samsung and Hyundai. Many Japanese companies are raising their game, using a range of strategies to fend off low-cost competition from overseas. Some of them are fortunate because they start from positions of relative strength. Leading firms such as Toyota and Canon have developed integrated manufacturing systems that are far more sophisticated and complex than rivals can manage. In other sectors, companies have learned how best to protect trade secrets that have long made them competitive, often bringing back home activities that might otherwise risk exposure to rivals. And most big firms believe that they can keep an edge in future by continuing to invest in new generations of products. Japans weak spot is in low-cost, mass production, which has been steadily leaving for lower-wage countries (just as it has also been seeping out of western Europe and America). There are only rare examples of Japanese companies trying to compete from a domestic base in the low-cost arena. One is Suzuki Motor. Its latest hit is a stripped-down budget scooter that costs one-third as much as regular scooters. Designed for urban short-distance drivers, it has eliminated some parts, such as rear suspension, once thought essential. Clever though this is, low-cost manufacturing in Japan is likely to be limited to niche products; Suzuki admits