Concerned about the impact of Chinese market demand and policies on the supply chain, more and more Japanese companies have begun to clearly switch to the US, linking their growth plans to it.
In recent months, a number of companies have expressed interest or announced plans to expand in the US, robot manufacturers$YASKAWA Electric (6506.JP)$, beverage company$Asahi Group Holdings (2502.JP)$, chip manufacturer$Renesas Electronics (6723.JP)$and car manufacturers$Honda Motor (7267.JP)$These are some of those companies.
Historically, the US has always been the most profitable market for Japanese car companies, even surpassing mainland Japan.
At the end of last year, Toyota said it would increase its investment in its electric vehicle battery plant in North Carolina by 8 billion US dollars, bringing the total investment to about 13.9 billion US dollars. The plant is expected to be put into operation in 2025 and is Toyota's first automotive battery factory in the world. Additionally, Honda said this month that it will invest at least $700 million to transform its Ohio plant to build the state's electric vehicle center.
Anita Rajan, president of JAMAUSA, a lobbying group representing Japanese automakers, said that Honda's investment shows that Japanese car companies are investing not only for next year, but for “the next few years.”
A Japanese automaker executive said privately that he was surprised by the vitality of the US economy and believed that the US market provided better opportunities for development.
According to LSEG data, Japan's total overseas mergers and acquisitions reached 8.1 trillion yen (53 billion US dollars) last year, the highest number since 2019, about double the previous year, with more than half of them in the US.
Japan plans to increase its share of North American expansion to more than 50%. However,$Nippon Steel (5401.JP)$Bidding$United States Steel (X.US)$How the tense situation will affect the outlook remains to be seen.
Nippon Steel's $15 billion deal to buy US Steel has angered US politicians. Biden said that US Steel must continue to be owned and operated by the US, while Trump vowed that if re-elected as president, he would block this deal.
Currently, the US is Japan's largest export market. While some companies may think the US market is a better long-term option, this is not the case for others, says Miyake of Canon Research.
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