Interview Japan: Automotive sector as biggest business opportunity

Author / Editor: Ahlam Rais / Susanne Hertenberger

Yoji Ishimaru, President, Japan Machine Tool Builders’ Association speaks to Ahlam Rais on the current happenings in the Japanese machine tool sector along with potential future opportunities for this industry.

Yoji Ishimaru, President, Japan Machine Tool Builders’ Association
Yoji Ishimaru, President, Japan Machine Tool Builders’ Association
(Source: Vogel Business Media)

What is the current scenario of the Japanese machine tool market?

Yoji Ishimaru: The Japanese machine tool market is doing quite well as we have many orders from the overseas as well as domestic markets. In 2017, the total order volume was record high in the history of the Japanese machine tool business as the total number of orders was 1.64 trillion yen (14.8 billion dollars).

On the other hand, we are facing issues in terms of supply of main parts such as linear guides or ball screws. This is a big concern for the machine tool business but in due course we will be able to produce these machine tools.

Overall, we are happy as all the user sectors in the domestic and international markets are booming especially the general machine industry which comprises of small and medium industries. This shows the general development of the economy across the globe and at present, we see a balanced and steady growth.

What are the initiatives undertaken by the Japanese Government for boosting the machine tool industry?

The Japanese Government is promoting the ‘connected industry’ concept for boosting Industry 4.0 and the IoT industry. The initiative is a more concrete concept for the new age industry. The government has joined hands with the private industry and is focussing on diverse ways in which it can develop IoT. It also guides industry players on how to deal with changing technologies and the industry as a whole.

We have to make an endeavour to make better machine tools along with innovative technologies in the future especially in the field of Industry 4.0, IoT or smart manufacturing. Almost all the Japanese machine tool companies are focussing on this aspect.

In terms of exports, which are the major countries that Japan caters to? Which are the top countries in the world for the machine tool sector?

When we speak about exports, about1/3rd of the total foreign demand comes from China and about a half including China comes from Asia as a whole. North America takes 1/4th of the share and 1/5th of the demand comes from European countries.

In terms of quality, Japan, Germany and Switzerland are the top three countries for the machine tool sector but in some specific areas such as defence and aeronautics, the USA is also a leader. Southern European countries including Italy and Spain are next in line followed by Korea, China and Taiwan.

Taiwan is gradually becoming a big name in the Asian market, what are your views on the same?

Taiwan is located very favourably as it is quite near to Japan, China and Korea. The Taiwanese machine tool industry has developed to a certain degree and also has many joint venture projects with Japan and Mainland China. Several Japanese machine tool builders import machine parts from Taiwan and also export their products to Taiwan, this way we have a good compensatory relationship with Taiwan.

Which sectors do you think will bring more business opportunities for the Japanese machine tool industry in the coming years?

The automotive business will continue to be our biggest business opportunity. Of course, we are also looking at Electric Vehicles (EVs) and a few people are also stating that if all the cars transform to EVs the need for machine tools will diminish but we do not think so. If the share of EVs increases then the need for semi conductors or new mouldings and dies will also increase. In short, maybe the content of the need might change but the volume itself might rather increase. We are keen to see the impact of the so-called ‘EV shift’. Apart from the automotive industry, the aeronautical and medical sectors are other potential sectors that will drive the growth for the Japanese machine tool industry in the coming years.

Thank you for the interview

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