Can PM Allure Japanese Manufacturing Sector to India?

Our PM Left for the official visit of Japan today. It is a great opportunity that our economist PM is visiting Japan and shall be interacting with the top leadership of the country that is more known for its cutting technologies rather for its political clout.. Each nation and ethnic group has “national traits” and “ethnicity”. Japanese are not so good at financial business, may be Indians are. Japan’s strong point is in “Manufacturing”. I have been a fan of Japanese manufacturing capability. Japanese have perfected manufacturing, and India must do everything to bring as many as possible Japanese manufacturing companies to India.

Japanese are today the leader in automotive industry with Toyota very soon coming to the number one in the world. Japanese are also superb in household appliance and electronics. By integrating Japanese manufacturing strength with India’s IT technology, both the countries can get into a win-win position. India with a vision to become global manufacturing must strengthen its electrical electronics sector. Japan can provide much of the technology needed for the manufacture of advanced high-end electronics components and products.

Japanese manufacturing was the first to pioneer the low volume high variety method of flexible and reconfigurable manufacturing system to satisfy customers’ various demands. With many management tools such as lean manufacturing, quality engineering, QFD and modular designing, Japanese have fine tuned product and process design and achieved ultimate in manufacturing. Speed, quality and the ability to provide the customer with the right price are some of the competitive advantages that Japanese have mastered.

Japanese got disenchanted in their first effort to come in manufacturing in India in 1980s in big way. Even today, except for Suzuki neither Toyota nor Honda have gone for significant investment in product design or even manufacturing in India, as Korean Hyundai in automobiles or Samsung and LG in household appliances have done. Japanese manufacturers have their own constraints, and perhaps apprehensions about the work culture in India. I don’t think either business or political leaders have made much effort to change the impressions of Japanese business leaders.

Japanese attention was substantially diverted to China, which over the past ten years has won investments of over $27 billion in a wide range of sectors when India got barely a tenth of that, and that too largely in two spheres, automobiles and electronics.

However, with changing global political equations and its historical problems with China, Japanese also may like to come nearer to India. It appears so from many of the recent statements of the Japanese bureaucrats. As reported, Ryoichi Horie, deputy chief of mission of Embassy of Japan in New Delhi, has said recently, “Many top Japanese companies have manufacturing hubs in Asean countries, but their products are sold in India. It’s more a multilateral business. But now, many Japanese companies are willing to set up their own manufacturing base in India.” And the Japanese Ambassador, Yasukuni Enoki, in an interview to ‘Hindustan Times’ made very encouraging promises for the Indian’s manufacturing sector on the eve of the PM’s visit. He said, ” Japan helped the Asean countries develop their manufacturing industries in the eighties, and did the same with China in the nineties. Now, in the new century, Japanese investment and technology will benefit India similarly. I believe this elephant is about to start galloping and we are there to give it a push.” Naoyoshi Noguchi, director general of Japan External Trade Organisation (JETRO) argues that Japanese companies have realised the missed opportunities in Indian market, and are now serious about long-term stay in the country. “The market dynamics in India are very different. It’s a highly price-sensitive market. That’s why many quality-conscious Japanese companies hesitated to explore the Indian market. Now, as many as 352 Japanese companies are operating in India and the number will only increase substantially,” unlike the Chinese and Indians, the Japanese don’t take hasty decisions. Their decision-making process is very slow. But once they decide, there’s no going back. I feel Japanese companies are convinced that the future lies in investment in India.” No sayonara any more.

The CII delegation of Indian CEOs accompanying Prime Minister Manmohan Singh to Japan will be expected to assuage fears among Japanese companies about growing incidence of labour unrest in the country and slow pace of decision-making in the government.

India must do everything to convince Japan to bring its manufacturing sector to India as a reliable global base for domestic as well export market. Will Toyota and Honda make India its main base for R&D and manufacturing of its whole product range?

To the land of rising opportunities
SEZs, industry corridor: Delhi, Tokyo in new economic deal

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