Japanese military manufacturers still struggling despite relaxed export ban
Japan lacks the marketing and technology transfer expertise of the US and other major exporting countries.
A year after Japan eased a long-standing ban on military exports, barely a trickle of deals has formed for its powerhouse manufacturers who are reckoning with latecomer status in a crowded global industry.
Following Japan’s defeat in the second world war, its defence manufacturing industry was confined to the domestic market apart from some joint projects under the Japan-US security alliance. Partly in response to China’s rising military assertiveness, Japan last year loosened restrictions on technology transfers and sales of military equipment.
Industrial giants such as Kawasaki Heavy Industries seem poised for a windfall but ambitions are hitting a wall. So far, the only known deals in the pipeline are the possible sale of Soryu-class submarine technology to Australia and ShinMaywa Industries’ US-2 amphibious aircraft for India.
After decades of near isolation from the global defence industry, “Japan is not up to speed with global trends,” said Toru Hotchi, director of the Defence Ministry’s Equipment Policy Division and Japan’s go-to person for procurement.
Hotchi shares with Prime Minister Shinzo Abe the mission of selling Japan’s defence equipment. He travels to industry fairs and visits foreign militaries to study global defence and weapons trends. He also fields contacts from foreign governments and companies seeking opportunities from Tokyo’s.
“Japan can make anything, in principle, except for nuclear weapons,” Hotchi said in an interview. “The potential is high.”
Japan’s home market is only worth about 1.5 trillion yen (US$12.5 billion) annually. Big-ticket sales overseas could enable its defence contractors to scale up, increasing profits and slashing costs for the Ministry of Defence as it stretches its budget to upgrade outdated hardware and beef up defences against China.
