business

On Japan Sea coast, small firm feels effects of China's economic woes

5 Comments
By Tetsushi Kajimoto

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Japan should look back and learn from recent history. When Japanese auto makers decided to stop investing because of slow down in US market a decade ago, it gave market share to German and Korean makers (permanently). It also gave German and Korean car makers the opportunity to surge ahead. Instead of slowing down investments, the Germans and Koreans invested more heavily and increased presence or entered new markets.

The difference in mindset could not be more black n white. Japan saw cheap money as poor economic conditions not worthy of investments. Koreans and Germans sees cheap money as opportunity to develop technology and markets cheaply.

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A much cheaper yen, driven by unprecedented money-printing from the Bank of Japan, has made the country's exports more competitive globally. This has spurred a long export boom and record corporate profits, promoting hiring, creating the tightest labour market since the 1970s and delivering modest pay raises.

Very good description of the problem. This is a failed economic model that benefits only the export industry on the expense of everybody else. As a result of this export-led economy, the service sector is not well developed, and the economy is not diversified enough. All the good paying jobs are in the export industry. They need to stop subsidizing the export industry, let the currency rise in value so people can have more purchasing power, reduce the regulatory burden so more foreign competition can enter the market. The economy needs to become diversified, and the service sector needs to be developed much more than it is today. High standards of living comes with an increase of alternatives.

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The Japanese never look at ramping up demand in Japan; it is always about the export markets.

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if anything, this company is an example of bad planning and executive incompetence.

you build your business on a shaky ground of exporting "high quality" to a country that has massive resources and quickly learning to produce same and better "high quality" .. this combined with shaky demand is a path to failure.... maybe patenting the knowhow would have been a better option

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@Sh1mon M4sada

Japan did not roll back investment on their US markets years ago. What happened instead was Japanese automakers were hit with a slew of scandals. The toyota acceleration scandal and the Takata airbag scandal hit Japanese automakers the hardest. Even though almost all makers were using Takata airbags, it was something Japanese so it reduced consumer trust in Japanese vehicles. Moreoever, the reemergence of Ford and other US automakers also took market share away. Lastly, Korean automakers big push with offering 10 Year warranties also gave them market share. German market always went through its usual ups and downs in America. Honda and Toyota had a stranglehold on the top two spots. They still do, but they have never reduced investment.

Japanese automakers were the number one beneficiaries of the U.S. economy slowdown because German and American cars were always viewed as expensive as well as gas guzzlers. The slowdown drastically increased Japanese automaker's market share in the U.S. because they were viewed as cheaper vehicles that were more gas effecient.

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