The following are highlights of the results of this survey:
(1) Intention to strengthen/expand overseas business operations appears to be in a slowdown
Both overseas production and sales ratios fell slightly from the previous year, and were 35.0% and 38.5%, respectively. As for business prospects, "Strengthen/expand" regarding overseas operations stood at 72.1%, and the decreasing trend continued since the peak of 87.2% in FY2011. Meanwhile, "Strengthen/expand" regarding domestic operations rose to 37.7%, reaching the highest level since FY2008.
(2) Expected effects of the Trump administration differ between the markets in the U.S. and Mexico
As for the effects of the Trump administration regarding business in the United States and Canada, a large part of the responses consisted of "Not sure" and "Probably no effect," but in regard of business in Mexico, around one-fourth of the companies responded with "Probably negative." As for the effects of Brexit, over 20% of companies responded with "Probably negative" regarding business in the United Kingdom.
(3) Promising Countries over the Medium-term: China and India gain high ratings, and assessments of the U.S. and Mexico diverge
China took first place for the first time in five years with the percentage share of 45.7%, up 3.7 points from the previous year. India, which was previously in first place, fell to second place but kept a high percentage share of over 40%. Vietnam (third place) and Thailand (fourth place) rose in the ranking, while Indonesia fell from third place to fifth place. Ratings for the United States and Mexico clearly diverged, as the percentage share of the United States (sixth place) increased significantly, while Mexico in seventh place saw a sharp decrease.
(4) Competition intensifies among manufacturing companies providing consulting and solution services, and providing value for customers using big data and/or IoT is set to increase though lack of experts remains a challenge
1. As for services provided by manufacturing companies, "Maintenance and after-sales services," "Customization services," and "Consulting and solution services" were the most widely implemented. In the future, "Providing value for customers using big data and/or IoT" is expected to increase.
2. As for the reasons for providing services, "Essential for selling products" had the highest response rate, followed by "To differentiate ourselves from other companies." In regard to challenges, "Intense competition with rival companies" had the highest response rate, followed by "Lack of experts in the field." Moreover, reasons and challenges for providing services differed somewhat depending on the type of services; "Providing value for customers using big data and/or IoT" tend to be carried out in order "To develop and diversify business" but "Lack of experts in the field" is a challenge, while "Solution services" are provided in order "To differentiate from other companies" but "Intense competition" is a challenge.
(5) As for services received by manufacturing companies, local companies are used for the most part, but as for quality, Japanese companies are rated highly
For "Legal/accounting/tax services," a high ratio of companies used local companies, and for "Logistics Services," local companies were used slightly more than Japanese companies. As for the quality of the services, Japanese companies were rated highly. The ratio of companies using Japanese companies for "Marketing/advertising services" was low, and "Design services" was not used by most of the companies.
(6) Transferring of headquarter functions to overseas bases and utilization of local personnel are in progress
1. The ratio of companies transferring headquarter functions overseas increased, compared to FY2013. Transferring of product design functions to emerging countries is currently not executed at a high level, but is expected to increase in the long-term.
2. As for human resource management, an increasing number of companies are giving substantial responsibility to locals. Localization of human resources is expected to increase further in the medium-term, particularly in "Production and sales functions."
3. In regard to challenges related to human resource management at oversea bases, "Unable to find/hire/retain local talent" and "Communication/collaboration difficulties due to linguistic/cultural differences" accounted for most of the responses, and "High turnover rate" among workers was also a challenge. As for initiatives related to human resource management, "Trainings at headquarters/regional bases" and "Standardizing work process and sharing management policies globally" gained high response rates.
