Report on Japanese Manufacturers' Overseas Business Operations FY2008 (the 20th) Survey on Foreign Direct Investment
International Business Development , Knowledge sharing NR/2008-59
November 25, 2008
November 25, 2008
- The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe) *1 released today the results of a survey on Japanese manufacturers' overseas business operations, entitled “Survey Report on Overseas Business Operations by Japanese Manufacturing Companies.” The survey was conducted from July through August 2008, covering 982 companies, of which 620 returned effective responses, an effective response rate of 63.1%. Its purpose is to identify the current trends as well as future outlook of the overseas business operations of Japanese manufacturing companies engaging in business operations abroad. This year's survey is the 20th of an annual series that began in 1989.
- The survey examined “competitors in the global sales market” and “important domestic and overseas efforts to maintain/improve international competitiveness” continuously from the last survey, in addition to the consecutive topics of “medium-term prospects of business operations,” “evaluation of overseas business performance” and “promising countries and regions for overseas business operations.”
The highlights of this year's survey are as follows (For the full document, please click here):
(1) Although downside pressure on overseas operations is increasing, enthusiasm for forays into overseas markets remains; a majority wish to maintain their present levels of domestic business
Of the respondent companies, 79% said that they want to strengthen or expand overseas operations (down three points from last year). At the same time, only 41% said they wanted to strengthen or expand domestic operations (down 10 points from last year), with 53% responding that they wanted to maintain the present level.
(2) China still holds the top position for promising countries, but popularity is spreading to include India, Russia, Brazil, and other emerging nations
In the portion of the survey dealing with promising countries (including quantifications of countries viewed as promising for business expansion), China maintained the top position, but the number of companies viewing China as promising is declining. On the other hand, more companies are viewing India, Russia, Brazil, and other emerging countries as promising, which is indicative of a further dispersing of interest among countries and regions seen in a positive light from a business perspective. The number of companies that view India as promising has increased to a level on par with China.
(3) Resources put into new product development, lowering unit costs, and overseas-related businesses in order to improve international competitiveness
Overseas related issues, which include finding personnel capable of dealing with the global environment and expansion of overseas production, were cited as important efforts to be made in order to maintain and improve international competitiveness. Development of new products, and cost reductions are also highly cited as important efforts. For material-related companies in particular, the stable procurement of raw materials is a very high-priority matter.
(4) New investment is going to India and Vietnam; companies are expanding investment in existing bases in China and Thailand
Although China and Thailand remain high on the list for concrete business plans for many companies, the majority are further investments in existing bases in these countries. India and Vietnam are prominent destinations for new investment. The majority of business plans for Russia are sales-related. By industry, the number of companies planning to expand in automobile-related fields has dropped off.
(5) Assessments of business performance for North America have declined significantly; for EU, the effects of a strong euro are being felt
As for assessments of recent business performance (sales and profits) by region, North America has seen a major drop. The EU has relatively high ratings, but these were largely due to the effects of a strong euro.
- JBIC will draw on the findings of the survey to provide well-tuned support for overseas business activities of Japanese companies which are exposed to increasingly intense global competition, and to improve the investment climate in individual countries and regions by conducting dialogues with foreign governments and their agencies.
Appendix: Promising Countries/Regions for Overseas Business Operations over the Medium Term (excerpts)