Japanese shipyards reemerge armed with weak yen

By Choi Sung-jin

Japanese shipbuilders dominated global markets for more than 50 years until they gave the top position to their Korean competitors in 2003.

Armed with the weak yen and a renewed competitive edge, they are now coming back, industry sources report. For Korean shipyards, which have been reeling from losses from offshore plant business and undercutting Chinese competitors, the emergence of their Japanese rivals constitutes the last of a triple whammy, the sources note.

The Japanese shipyards’ market share has more than doubled in the past five years, from 12.5 percent in 2010 to 27.1 percent in 2015, according to Clarkson Research, a British agency analyzing shipping and shipbuilding industries.

“The low yen has attached additional wings to Japanese shipbuilders, whose only weakness was price competitiveness,” an analyst here said. In contrast, the Chinese shipbuilders, despite their cheap prices, have been the targets of complaints for low quality and failure to meet delivery deadlines. “Shipping companies will find few reasons not to buy Japanese vessels, which offer good quality, and now, competitive prices.”

Japan’s biggest strength is technology. “In almost every aspect, such as the quality of materials, efficiency of construction, delivery schedule, quality control and research and development, Japanese experience beats their counterparts in Korea and China,” said a report by Korea Institute for Industrial Economic and Trade.

Japan is now increasing their investment in R&D even further to build more fuel-efficient and environment-friendly vessels.

“Japanese shipbuilders can master any advanced technology if they decide to do so,” said an industry executive. “For the domestic shipyards, the Japanese are far more formidable rivals than the Chinese.”