The OEM has announced the move in light of the Japanese government’s “yen-weakening policies”.
Canon’s global headquarters in Ota, Tokyo
London Free Press reported on the decision by the OEM to move manufacturing capacity back to Japan, which it claims is an “apparent vindication” of Japanese Prime Minister Shinzo Abe’s economic policies, which have “made it more profitable for some Japanese manufacturers to produce and export from home”.
Canon was said to have been “caught out” by its previous reliance on domestic production in the wake of the 2008 financial crisis, with the yen “soaring” and thus devaluing the OEM’s “overseas earnings” as well as increasing labour costs, “forcing [it] to produce more overseas”. The move back to Japan is “set to reverse that shift” by “boosting jobs and factory operations”, as well as “erode the competitive advantage” of competitors manufacturing overseas.
The OEM’s proportion of products manufactured in Japan is expected to rise to 50 percent in the next three years from 42 percent, with Canon’s CEO Fujio Mitarai telling reporters he was “looking forward” to a further slide in the yen because “we have spare capacity at home” due to “gradually mov[ing] production overseas”.
The option to manufacture overseas will be left open, with Canon claiming the latest decision is “designed to make manufacturing more flexible” in case the yen strengthens again, with “no plans to build new factories in Japan” at this point.
The OEM was planning an automated printer cartridge factory in the Netherlands, which has been “stalled by the prolonged chill in the European economy” and has not begun construction, with Mitarai noting that “we’ve bought the land but demand in Europe isn’t strong enough yet […] our forecasts for Europe at the beginning of last year were way off”.