FY2015 Survey (the 27th) Report on Overseas Business Operations by Japanese Manufacturing Companies

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December 3, 2015
  1. The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) released today the FY2015 Survey Report on Overseas Business Operations by Japanese Manufacturing Companies, the results of an annual survey on Japanese manufacturers' overseas business operations (the survey). The survey was conducted by sending questionnaires to 1,016 companies in July which were returned from July through September 2015, and 607 companies returned valid responses (response rate: 59.7%). Its objective is to identify the current trends as well as future outlook of overseas business operations by Japanese manufacturing companies with an extended record of overseas business. This year's survey is the 27th of an annual series that began in 1989. (Please click here for the full report)
  2. As has been conducted in the past, the survey examined "medium-term business prospects", "evaluations of overseas business performance" and "promising countries or regions for overseas business operations". This year, it had the following additional individual themes.

    【Individual Themes】

    • Management Challenges to be Addressed 
    • Status of Overseas M&A and Policy of Engagement
    • Trends in Production Repatriation by Companies with Overseas Business Operations
    • Comparison of Mother Plants in Japan and Overseas Plants
    • Recent International Affairs Considered by Japanese Companies with Overseas Business Operations
    • Situations in China and Stance towards Future Business Operation
    • Needs and Issues Regarding Infrastructure in the Asian Region
    • Long-Term Financing (of more than three years) for Business Operations in Emerging Countries
       
  3. The following are highlights of the results of this survey:

    (1) Medium-Term Stance toward Overseas Business Operations
       Reflecting the recent state of the global economy, this year's results - when compared with those of the past surveys - indicate signs of a standstill, despite the fact that over 80% of responding companies showed a stance toward strengthening/expanding overseas operations.

    (2)Promising Countries over the Medium-Term
     As was the case in the previous survey, India was given most as the promising country. 2nd and 3rd were Indonesia and China. These countries received similar percentage shares around the 40% mark and balanced out - much higher figures than the lower ranked countries. While the percentages of Brazil (9th) and Russia (12th) saw significant decreases, there were increases of the figures for Mexico (6th), USA (7th), and the Philippines (8th), all of which indicate the effects of recent economic conditions in each country and region. In addition, a look at the promising countries by industry shows that for the automobile industry, Mexico, which had finished in 4th place in the previous survey, ended up in 1st place in this survey- the first time for that country since JBIC started surveying by industry.
     

    (3)Management Challenges to be Addressed
      The top responses were standard challenges: "Expand current businesses qualitatively and quantitatively" and "Develop products that are strongly competitive (high market share product in niche market)." However, "develop individuals who are capable of managing overseas bases", "the creation of new businesses that will be new growth drivers", and "product development in line with local needs" were given as the challenges with the next highest level of importance.
     

    (4)Engagement in Overseas M&A
      As part of overseas business operations, overseas M&A was recognized as an important means of management by over 70% of responding companies and over 50% indicated that they were engaging in overseas M&A. As for an objective of overseas M&A, "Exploration of new markets, expansion of sales network" was given by almost 80% of the respondents.
     

    (5)Domestic Business Operations and Repatriating Production
      Of the companies that will be strengthening/expanding overseas business, for three consecutive years there has been an increase in the ratio of those that expect to either maintain or strengthen/expand domestic business, leaving that ratio at almost 90%. Regarding the repatriation of production, "Has been done" and "There are plans to do so in the future" were given by a total of 13.8% of the respondents, and the overseas production bases that have been transferred to Japan have mainly come from Chinese bases. The dominant reason for having repatriated production was "Due to improvement of export competitiveness via yen depreciation."
     

  4. Taking into account of the findings of this survey, JBIC will support the overseas business activities of Japanese companies operating under international competition, while conducting dialogues with governments and relevant authorities in foreign countries and regions in an effort to improve their investment climate.

    Appendix 1: (Extract) Ranks Promising countries/Regions for Business Development over Medium Term (the next 3 years or so)

    Appendix 2: (Extract) Trend of Overseas Production Ratios, Overseas Sales Ratios and Overseas income ratios

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