How have global economic concerns affected German companies operating in Japan? We asked key decision-makers in this area about their strategies and the challenges they face.
A favourable outlook for German-Japanese business: Despite global economic anxiety, the managers at branches of German companies in Japan are for the most part optimistic.
As one of the largest and strongest economies in the world with a strong presence across the whole of Asia, Japan is seen as a top priority at the group level for more than a third of the German corporate groups surveyed and represents a significant share of group revenue. These are the findings of our survey "German Business in Japan 2019". A German, English and Japanese version is available for download.
In cooperation with the German Chamber of Commerce and Industry in Japan (AHK Japan), we surveyed around 100 German companies with operations in Japan about their business situation and their assessment of Japan's economic development.
87% of the surveyed companies generate profits before tax in Japan; of these, 17% generate profit margins of more than 10%. 57% (PY: 73%) of the managers at German companies in Japan anticipate moderate to significant growth in their business in the next 12 months, while 17% (PY: 0%) predicted a decline. However, 38% of the managers expect Japan's economic output to decline over the year, compared to just 8% in the prior year. At the same time, 30% of those surveyed believe an economic upswing is likely within the next 12 months.
The free trade agreement between Japan and the EU (JEFTA), which came into effect on 1 February 2019, is seen by many companies as an economic boost for their business in Japan. Almost half of those surveyed expect the agreement to have a positive or very positive impact.
In our "German Business in Japan 2019" survey you can also find out about the effects of the Society 5.0 initiative and cooperation with Japanese partners in third markets, in particular ASEAN.
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