Japan's spare parts companies flock to Southeast Asia: 350 in 3 years

According to statistics from the Nihon Keizai Shimbun, according to statistics, 350 key Japanese manufacturing companies and small and medium-sized enterprises will enter Southeast Asia in the next three years, focusing on Indonesia, Thailand, the Philippines, and Vietnam, mainly auto parts companies and electronic machinery parts companies. One of the main reasons is that large auto and electric appliance manufacturers expand overseas production scale and increase the proportion of overseas parts purchases. For example, Toyota Motor has built a new factory in Indonesia, Matsushita will move its procurement logistics headquarters to Singapore, and second, it will respond to the appreciation of the yen.

To this end, Japan’s major trading companies have accelerated the construction of industrial parks in Southeast Asia, improved infrastructure such as electricity, roads, and water treatment, and created conditions for the entry of small and medium-sized enterprises that lack financial resources. The two-day “Greenland Industrial Park” built on the outskirts of Jakarta in Indonesia expanded from 400 hectares to 700 hectares. After the second phase of the project, it will reach 1300 hectares. It will become the largest industrial park in Indonesia and will enter 60 companies. The auto parts company FUTABA and SHIROKI have decided to enter; Toyota Tsusho has also acquired 15 hectares of land in the industrial park near Jakarta, and has already discussed with more than a dozen auto parts companies; Itochu is in Kuala Perak, Indonesia. The International Industrial Park (KIIC) operates a leasing plant business; Sumitomo Corporation will also provide a leasing plant for Japanese SMEs in the industrial park in Vietnam. All plans were implemented in the first half of 2012. The company’s plan to build or expand industrial parks has increased the price of land in countries such as Indonesia.

According to a survey conducted by the Cabinet Office in January, the overseas production ratio of key players and SMEs rose rapidly from 1.4% in 2004 to 5.7% in 2009, and is estimated to reach 8.2% in 2015. Although it is lower than 22.6% (2009) of large companies, it is close to the trend.

As the backbone of the manufacturing industry and SMEs entering the overseas market, they can increase their international competitiveness. However, there is concern in Japan that domestic employment will be reduced and the industry will be hollowed out.