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Foreign investments: German companies in Japan

German companies in Japan

Those who venture out reap the rewards: The vast majority of German companies in Japan generate profits. And they increasingly tap into other markets in the area, as our survey with the German Chamber of Commerce and Industry in Japan has shown.

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More profitable, more important and extremely reliable - that is the Japanese market for German companies in 2020. This has been shown by our survey 'German Business in Japan 2020', which we conducted together with the German Chamber of Commerce and Industry in Japan (AHK Japan).

Those who are already active in Japan give these investments increasing priority. For good reason: 94% of the 92 companies surveyed by us generated profit before tax there in the past year. 

Japan as a springboard

The Japanese domestic market of 126 million people is a great motivator for investment. But not only that. Japan's regional network is equally important. 63% of the Japanese subsidiaries of German companies are involved in foreign projects and activities with Japanese partners, most of which are in the ASEAN region.

"Japan is and remains a strategically important partner for German companies. This partnership is being strengthened even further through the coronavirus crisis. This is because countries which so far have not been a major focus of German business will gain importance in the future", explains Andreas Glunz, Head of International Business at KPMG Germany. "Japan's role as a springboard into the Asian market and thereby for global business of German companies will therefore become even more important in future."

Growing passion for innovation of the Japanese

Japan also provides a glimpse into the future. Nearly half of those surveyed keep an eye on Japanese competitors. This is also because of the rise in innovative activity which German companies find in Japan. 

All of this occurs within the framework of the Japan-EU Free Trade Agreement (JEFTA), which forms the basis of trade relations since 2019 and is highly valued by German companies. Stability is now more important than ever before. This applies to business relationships, the economy as a whole and also to society. 

"Especially in times of global trade disputes and crises, this clearly underscores that stability is the key factor for choosing Japan as a business destination," commented Marcus Schürmann, Delegate of German Industry and Commerce in Japan and CEO of AHK Japan.

You can find further details on the findings and challenges encountered by German companies in Japan in our survey 'German Business in Japan 2020' conducted at the end of February before the coronavirus crisis had fully unfolded. 

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