Report on Japanese Manufacturers’ Overseas Business Operations FY2009 (the 21st) Survey on Foreign Direct Investment
International Business Development , Knowledge sharing NR/2009-41
November 6, 2009
November 6, 2009
- 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 2009, covering 1,004 companies, of which 625 returned effective responses, an effective response rate of 62.3%. Its purpose is to identify the current trends as well as the future outlook of the overseas business operations of Japanese manufacturing companies engaging in business operations abroad. This year's survey is the 21st of an annual series that began in 1989.
- The survey examined “Medium-term business prospects,” “Evaluations of overseas business performance,” and “Promising countries or regions for overseas business operations” continuously from the last survey, in addition to the topics of “Reactions to the economic crisis,” and ”Important domestic and overseas efforts to maintain/improve international competitiveness.”
- The summary and the highlights of this year's survey is as follows (for the full document, please click here):
The recent economic crisis had a major impact on Japanese companies, and its effects are undergoing. Nevertheless, the search for new business opportunities overseas continues, with increasing degrees of interest being shown in China, India, and other emerging markets, driven by its domestic demand. In addition, despite the recession, robust motivation for research and development (R&D) is continuing steadily, with a particular focus on environment-related businesses as a great potential area.
(1) Two-thirds of the companies implement both “offense” and “defense” measures for the economic crisis. Offense strategies include domestic R&D as well as expansion of production in Asia.
Two-thirds of the companies reported that they are implementing both “offense” and “defense” measures, with the remaining one-third responding that they are concentrating on “defensive” steps. Most companies can be said to have taken some forward-oriented policies. In many companies however, those policies consist of domestic R&D and production expansion in Asia.
(2) The portion of companies that wish to strengthen overseas operations is 66% of the total. While this is down from the previous year, a majority of companies are still positive about overseas businesses.
The number of companies responding that they wish to strengthen overseas operations accounts for 66% of the total (down 13 points from the previous year). On the other hand, only 27% of companies said they wanted to strengthen domestic operations (down 14 points from the previous year), with 55% wishing to maintain their businesses as it is.
(3) The will to strengthen overseas operations has largely fallen off in the auto industry, but remains at high levels for food industry.
Of the industries for which respondent companies reported that they would strengthen overseas operations, automobiles was the lowest among all industries, a 35 point drop to 50%. Meanwhile, 83% of foodstuff companies responded affirmatively, up 5 points from last year, making it the highest rated industry in terms of desire to strengthen overseas operations. Responses for strengthening domestic operations mirrored this trend, with automobiles at low levels and foodstuff at high ones.
(4) China has regained its status as a promising country. India, Brazil and Indonesia are also strong.
In the portion of the survey (including expectation), China retained the top spot. In the past few years the number of companies that viewed China as promising had been on the decline, but for this fiscal year it increased. In addition, while more companies viewed the markets of India, Brazil, and Indonesia as promising, companies holding the same view of Russia, Thailand and the United States have decreased.
(5) Efforts to strengthen global competitiveness continue to be directed foremost towards new product development. Consolidating bases and centers has risen for priority, while human resources has fallen.
The development of new products and cost reductions continue to be in first and second place for priority. Issues that significantly gained importance included “Consolidating domestic and overseas production” and “Creating a healthier financial standing,” while issues such as “Procuring human resources to globalization” saw a major drop.
- 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)