Rudlin Consulting

Category: Japanese business in Europe

  • Impact of Brexit on Japanese companies in the UK, 6 months on

    Impact of Brexit on Japanese companies in the UK, 6 months on

    (This article was first published in Japanese in the Teikoku Databank News in July 2021)

    It has been six months since the UK left the EU and the transition period ended.  According to my research and also a recent survey compiled by METI and MUFJ Research, the impact on Japanese companies in the UK has not been as severe as many were expecting.

    This is partly because Japanese companies have been thorough in their preparations for a worst-case scenario over the five years since the 2016 referendum. The METI survey points out that larger (over Y10bn/$90m revenue companies, which is around 60% of the Japanese companies in the UK) are more positive about further expansion in the UK than smaller ones. They have had the resources and the networks to stockpile, set up logistics and warehousing on the continent and bear the costs of increased paperwork at the customs borders. They still see the UK as an important market and a useful base for regional coordination across Europe, Middle East and Africa.

    Even amongst the larger companies, however, there is some diversion in views. The METI survey summarises the Japanese automotive companies as viewing the outlook for the UK market as bleak  whereas chemicals, pharmaceuticals, foods and electrical machinery manufacturers are more positive. This diversion is clear in the employee totals – Nissan has 11% fewer employees year ending 2020 compared to a year previously. Honda is closing its UK plant in July and its employee numbers were 14% down in the year ending 2020 compared to the year before. Other double digit falls in UK employee numbers were Nomura and Konica Minolta.

    It is becoming increasingly difficult to be accurate about employee trends, however, as one impact of Brexit has been that some of the larger companies such as Sony and Panasonic have moved their incorporated European subsidiaries to the Netherlands and Germany. The UK operations are now branches, so do not have to file their full accounts, including employee numbers, with Companies House.

    Many of the financial services companies such as Mizuho and MUFG were branches of Japan or a European subsidiary anyway, and several others have moved to this model, as well as opened up subsidiaries on the continent, to ensure they are still approved to offer financial services in the EU. The EU has indicated it may put further pressure on financial services companies to move decision making and client facing personnel to the EU.

    The UK is increasingly a services sector economy, and this shows in the Japanese companies where employment is growing – NTT, who have moved their global headquarters to London and Outsourcing, who continue to acquire recruitment companies across Europe.

    According to METI’s survey, the reasons for choosing to continue to expand in the UK were the ability to use English, the presence of other multinationals and a transparent legal system. It would seem that the UK is still going to be the base for coordinating an increasingly dispersed network of people and businesses across the region.

  • Top 30 Japanese Employers in the Netherlands 2021

    Top 30 Japanese Employers in the Netherlands 2021

    There’s no doubt the Netherlands has done well from Brexit in terms of Japanese investment into Europe. Its strong services sector has made it a useful alternative regional coordination hub to London and there is a longstanding thriving Japanese community in the Amsterdam area. Both the numbers of Japanese nationals living in the Netherlands and the numbers of Japanese companies in the Netherlands have shot up the past few years, in contrast to a clear decline in Japanese companies in the UK, and a rather more bumpy but downward trend in Japanese nationals in the UK.  There have also been some significant acquisitions of Dutch companies by Japanese companies since 2016.

     

    The number of Japanese companies in Germany, the largest host in Europe, has also grown steadily over the past few years, making the sudden rise in Japanese companies in the Netherlands and Italy in the past two years look somewhat anomalous. The Ministry of Foreign Affairs (MoFA) does not explain what caused this sudden leap but they are sticking to their guns with the recent release of the data for 2020.

    Cross referencing the MoFA data with the Toyo Keizai directory and our own desk research, we think the sudden jump in the number of Japanese companies in the Netherlands and Italy are probably to do with the recent acquisitions – perhaps Outsourcing acquiring Netherlands headquartered Otto Work Force in 2018, supplemented by Mitsubishi Corporation acquiring Dutch energy company ENECO in 2020. In the case of Italy, it could be due to Hitachi acquiring various companies from Ansaldo STS.

    Our database contains 352 Japanese companies in Italy, sitting neatly betwen the 415 registered by MoFA and the 269 recorded in the Toyo Keizai directory.  But our estimate of 503 Japanese companies in the Netherlands is lower than both the 525 in the Toyo Keizai and the 639 in MoFA’s records. We only enter companies which we can verify have employees into our database, which is why we appear to have under-recorded the number. Many of the companies identified by Toyo Keizai and presumably MoFA are brass plate, holding company type entities. As was seen in the acquisition of Otto Work Force, even one company in the Netherlands turns out to have multiple legal entities attached to it – at least 9 different subsidiaries are associated with Otto Work Force in the Netherlands. According to Dun & Bradstreet, Outsourcing’s holding company in the Netherlands now has over 50 companies associated with it.

    Some of the Netherlands based companies we have not recorded may well have employees, but it seems Dutch companies are not obliged to disclose as much information as similar companies in the UK, for example – where employee numbers, even for the smallest company, are disclosed and freely available on Companies House.

    Bearing the lack of data in mind, our Top 30 Japanese companies in the Netherlands needs to be treated with caution, but we can certainly see that Outsourcing and Mitsubishi Corporation‘s recent acquisitions have pushed them into the Top 30. Recruit, another major Japanese recruitment company, also entered the Top 30 with its acquisition of USG People in 2015 and Orix, the Japanese financial services company, acquired Dutch asset manager Robeco in 2013.

    As these acquisitions show,  Japanese companies have mainly been investing in the Netherlands’ services sector. There are some companies with manufacturing operations such as Omron, making control equipment, factory automation systems, electronic components, automotive electronics, ticket vending machines and medical equipment.  Toyota Industries entered the Top 30 with its acquisition of materials handling systems manufacturer Vanderlande in 2017 and Canon manufactures printing production systems, as one of its legacies of acquring Oce more than ten years ago. Other major manufacturers are Astellas (pharmaceuticals) and Teijin (fiber). The notable absences from the Top 30 in terms of manufacturing are from the automotive sector – no Japanese car companies have plants in the Netherlands, and as a consequence, none of their suppliers do either.

    The 30,000 employees who work for the Top 30 largest Japanese employers in the Netherlands represent around 70% of the total number of Netherlands based employees working in Japanese companies. This puts the Netherlands in equal 7th place with the Czech Republic in terms of largest numbers of employees in Europe, after Germany, UK, France, Poland, Italy and Spain. As the Netherlands is host to the fifth largest number of Japanese nationals and fourth largest number of Japanese companies, this is a further indication that the Netherlands has relatively few manufacturers with large numbers of employees and rather more in the way of holding companies with no employees,  and a relatively higher density of Japanese expatriates compared to some other European countries.

    See our 2022 top 30 Japanese employers for the Netherlands for updates.

  • Trends in Japanese companies and Japanese nationals in Europe in 2020 – did the pandemic have any impact?

    Trends in Japanese companies and Japanese nationals in Europe in 2020 – did the pandemic have any impact?

    The number of Japanese nationals resident in Western Europe had grown steadily over the past seven years to reach over 220,000 by 2019. But by October 2020, according to Japan’s Ministry of Foreign Affairs,  that number had dropped 5% to around 212,000. Of course the pandemic may have been an influence on this, evidenced by the fact that the number of Japanese residents overseas fell consistently around the world, with a global decline of 3.7% from October 2019 to 2020. But the latest statistics also show that some longer term trends continue and that the UK, while dominant as a host of Japanese companies and nationals, is also something of an outlier.

    I’m surprised the numbers only fell 5% in Western Europe, as anecdotally I had heard of Japanese managers who were supposed to be moving to Europe staying in Japan, and ending up doing European working hours, trying  to do their coordination job in a Japanese time zone. I have a sinking feeling they were also glued to their laptops during Japanese working hours too.

    The fall in numbers of Japanese nationals resident in the UK had been a long term trend since 2015, but had shot back up in 2019. Since Japan’s Ministry of Foreign Affairs stopped giving breakdowns by visa category in 2017, it’s hard to work out what was behind this decline. It seems likely as I mentioned in previous posts, that it was more to do with how student visas were classified, with a secondary impact of Brexit on corporate expatriation to the UK.

    The number of Japanese nationals in the UK fell 5%, the Western European average, from October 2019 to October 2020, compared to an 6.7% drop for Germany and an 8.4% drop for France.  The UK is still the biggest host of Japanese nationals in Europe, with 63,000, compared to Germany with 42,000 and France with 31,000.

    The Nordics buck the trend?

    Some European countries hosted more Japanese nationals in 2020 compared to 2019 – mostly the Nordics – Finland, Norway, Denmark – and Austria. If this was anything to do with which countries were safer in the pandemic, this must have been more to do with perception than reality, as no country in Europe had been particularly badly affected until November 2020, just after the statistics were collated.

     

    As the Financial Times charts show, in the winter of 2020, UK, Austria and Denmark all had a higher number of cases and the UK and Austria had a higher number of deaths than the European Union average. But it does seem that Norway and Finland were good choices in terms of staying healthy.

    The rising phenomenon of non-resident Japanese directors

    I’ve also seen a rise in Japanese directors of UK companies, who used to be resident in the UK, now being resident in the Netherlands. Although the Netherlands is still a much smaller host of Japanese nationals than the UK, Germany or France, the trend for Japanese nationals resident there is strongly upwards, with only a slight (-1%) downward turn in 2020.

    Maybe the trends and impact of coronavirus will become clearer when the statistics for October 2021 are published in autumn of next year. It may turn out that COVID-19 accelerated trends that were already there, of consolidating and reducing the number of Japanese corporate expatriates, as Japanese directors and managers of UK and other European Japanese companies decided that they can manage their European subsidiaries remotely.

    Turning to the statistics for Japanese companies in Europe, the rise in the number of Japanese nationals in Netherlands clearly has something to do with the numbers of Japanese companies in the Netherlands shooting up these past two years. I had previously speculated as to what was the cause of the sudden rise in Japanese companies in the Netherlands and also Italy. Both have continued at that level for 2020, so it was clearly not a glitch and more a rebasing or redefinition of what counted as a Japanese company as there is no evidence that a sudden jump in the number of new Japanese entrants happened in either country.

    The UK managed to claw back some of the 12% decline in the number of Japanese companies it hosts since 2012, but is the only country in Europe, along with Belgium, to show a decline over the 9 years, when the numbers rose 23% on average for the whole of Europe.  As we have outlined before, this decline is less about a complete withdrawal from the UK, and more about some long overdue tidying and consolidation, accelerated by Brexit, of shifting European regional bases to the continent and turning UK subsidiaries into branches.

  • Top 30 Japanese employers in France 2021

    Top 30 Japanese employers in France 2021

    It’s been 4 years since we last looked at the top 30 Japanese employers in France. Much of what was true four years’ ago is true today. The top 30 partly reflects France’s traditional strengths, at least in Japanese minds, of food and drink, fashion, beauty and imaging technology – with Ajinomoto and Suntory still in the top 30 along with Shiseido, Fast Retailing (Uniqlo, Princesse Tam Tam and Comptoir des Cotonniers), Canon, Ricoh, Toshiba and Konica Minolta.

    The automotive sector is still a big employer, as you might expect with Toyota having a plant in Onnaing making the Yaris, and Nissan having some of its models made by Renault, supplied by NTN, JTEKT and Nidec.

    Some of the new entries are in the pharmaceuticals sector, including Taisho Pharma, who acquired UPSA from Bristol Myers Squibb in 2018 and Otsuka who have grown and made several acquisitions since they bought Nutrition et Santé in 2009.

    SoftBank is still in the Top 30 as they have a substantial number of employees via ARM, which they still have not managed to get approval to sell. They have also said they are cutting half of the staff in France who were working on robotics, including the not very popular Pepper, brought in with their acquisition of Aldebaran in 2012 and may be planning to sell it to a German company.

    According to our estimates, France is still the third largest base for Japanese company employees in the European region, with 76,000 employees. This is still less than half the employees of Japanese companies in the UK (176,000) or Germany (167,000) however. Around 60% of these employees are working for the top 30 largest Japanese employers (see below).

    The largest employer is Toyota Tsusho, (the trading sister company to Toyota Motor) who shot to the top of the rankings after their acquisition of French company (with a major presence in Africa), CFAO in 2016.  Nidec have also become a substantial presence in France thanks to their acquisition of Leroy-Somer, also in 2016.

    The most recent acquisition in France by a Japanese company is Nippon Paint‘s acquisition of Cromology, Europe’s fourth largest architectural paints manufacturer.  The acquisition was done via a new UK based company, DGL International, which is in turn owned by the DuluxGroup, an Australian paints company acquired by Nippon Paint in 2019. Nippon Paint sees this acquisition as a way of accessing markets across Europe, particularly France, Spain, Italy and Portugal, and then into Central European countries.

    Up until now France has hosted far fewer regional headquarter companies than the UK or Germany. Perhaps these recent acquisitions show the start of a trend towards France becoming a base for Japanese companies to expand into the wider EMEA region.

    Update:

    We have received some more recent data regarding Hitachi’s employee numbers in France, following their acquisition of ABB Power Grids and JR Automation and other growth, so have updated the Top 30 for France accordingly. We welcome such updates so please do get in touch if you think we are missing something.

    You can download the (updated) Top 30 Japanese employers in France below:

    PDF DOWNLOAD OF TOP 30 JAPANESE EMPLOYERS IN FRANCE 2021

  • Japanese companies’ preparations for Brexit pay off

    Japanese companies’ preparations for Brexit pay off

    I was relieved to see that the prediction I made in September 2019 that Japanese companies would be well prepared for a hard Brexit has proved to be correct. I would imagine Japanese logistics companies had a large part to play in this.

    Japanese car manufacturers have had to halt production in the UK, but this has been more to do with the impact of coronavirus and a shortage of semiconductors than any Brexit related problems.

    According to a JETRO survey at the end of last year, the main countermeasure adopted by Japanese manufacturers in the UK to cope with a hard Brexit was to stockpile. Other British companies have stockpiled too, and as a consequence there have not been as many trucks backing up in the UK or France as was feared. But I suspect Japanese companies have also faced few problems because many have adopted the second most popular countermeasure chosen by Japanese manufacturers in the JETRO survey – to reconfigure their supply chains. I estimate at least 30 Japanese companies in the UK have moved their EU supply hubs to the continent over the past few years.

    The companies who are suffering the most from Brexit are those smaller British companies who are reliant on supplying EU countries. Up until now they had been able to ship small quantities to EU based customers cost effectively, without any worries about certifications or customs clearance.

    Now they have to fill in all kinds of forms and if they are supplying food or livestock, they need health and hygiene certification. Some European logistics companies are refusing to supply the EU from the UK because they cannot cope with the paperwork. They also do not want to send trucks with imports into the UK if they cannot find a load to take back to the EU to justify the expense.

    This may all resolve itself eventually, but I suspect that many of the measures that Japanese companies have taken are not temporary and reflect long term trends, as well as the impact of Brexit. For example, the number of Japanese companies manufacturing in the UK has fallen by 22% since 2014, according to Ministry of Foreign Affairs data. This is greater than the 11% overall drop in Japanese companies in the UK. Many of them have converted to sales companies and others have become branches of EU parent companies. As a consequence, there has been a 31% increase in the number of branches in the UK, and a 16% drop in the number of incorporated subsidiaries. Companies who have converted to branches include financial services companies ensuring they can continue to trade in the EU.

    Japanese companies are continuing to start up in the UK, but they are mostly in the energy and lifestyle sectors, which are very domestic in orientation. Japanese logistics companies may find that their expertise in international goods trade is more in demand from British companies than Japanese companies in the UK from now on.

    This article originally appeared in Japanese in the Teikoku Databank News in March 2021

  • Pernille Rudlin interviewed on the history of Japanese companies in the UK and Brexit

    Pernille Rudlin interviewed on the history of Japanese companies in the UK and Brexit

    Pernille Rudlin is in conversation with Tom Hayes of BEERG (Brussels European Employee Relations Group) on how Japanese companies have responded to Brexit, tracing the progress of UK/EU/Japanese trade relations from Margaret Thatcher’s promotion of Britain as a Japanese gateway to the EU in the early 1980’s, through to the present day.

    The video and podcast links are as below

     

    BEERG Byte #32 from Derek Mooney on Vimeo.

  • The opportunity for Japan to help Europe with its housing shortage

    The opportunity for Japan to help Europe with its housing shortage

    One of the few new Japanese companies to join the Japanese Chamber of Commerce & Industry in the UK in 2020 was Sekisui House. Daiwa House also announced at the end of 2020 that they were going to acquire Dutch modular housing builder Jan Snel.

    Both companies cite the housing shortage and scarcity of skills across Europe as a reason for their expansion. We have certainly been suffering from a housing shortage in the UK for many years. When I studied the problem 30 years’ ago at university, I remember being told that one issue was not so much a lack of housing, but a lack of adequate housing. There were and still are a lot of older houses, even dating back to the 19th century, which are not fit for modern day living.

    Another issue which has become more acute is that these houses, even if refurbished, are not where people want to live. We still have an economic north/south divide in the UK, thanks to the decline of industry. Big northern towns and cities have no jobs, but plenty of empty, dilapidated housing. Cities in the south are not building enough new housing for the increase in population. As a result, young people are having to share crowded houses and apartments and cannot afford the mortgage needed to buy anywhere.

    Building more new houses in those cities is the obvious solution, except that there is a lack of land on which to do so. There was an attempt to allow old office blocks to be turned into apartments, but this resulted in some very low quality, unhealthy housing.

    Land is available in the commuter zones outside London, but this has been protected for many years by a so-called Green Belt, which tries to preserve green fields and woodland. Although this may seem a worthy ecological cause, it has mostly been exploited by the residents of those areas who do not like the idea of new houses and newcomers and a consequent hit to the value of their own homes.

    I used to live in one of those areas, near a train station which took me directly into central London in 47 minutes. It was right by the M25 orbital motorway, and there was a constant noise from nearby Heathrow and Gatwick airports. I thought at the time that claiming this was green belt and refusing to build more homes in the area was not only selfish, but a denial of reality.

    For the first time in the UK, and possibly in the world, air pollution has been ruled as the cause of death of little girl who had asthma and lived in London. I thought back to our time living in the “green belt” and the air pollution we tolerated there. If Sekisui and Daiwa are going to be able to build housing in those areas, their low carbon technology, with effective air conditioning systems,  should be much welcomed.

    This article originally appeared in Japanese in the Teikoku Databank News

  • Top 30 Japanese companies in Poland 2021

    Top 30 Japanese companies in Poland 2021

    Poland and other Eastern European nations are a forgotten economic success story, according to Ruchir Sharma of Morgan Stanley Investment Management in a recent Financial Times opinion piece. The Czech and Slovak Republics, Lithuania, Latvia, Estonia, and Slovenia have all made it into the advanced economies, as defined by the IMF, and have a per capita income of $17,000, with Poland not far behind at a per capita income of $15,000. Hungary is even closer, with per capita income of $16,000 and Romania is also catching up, on $13,000.  Quality of institutions and other more subjective factors are included in the IMF criteria, so it may be that if some of these countries are judged to have deteriorated under a populist government, then promotion to the premier division will be delayed.

    Sharma argues that consistent long term growth is the key to economic success, and manufacturing prowess lies behind this for Eastern Europe. Poland has grown at an average of 4% a year over the past three decades, without a single year of negative growth. Japanese companies do seem to have been attracted to this economic stability. According to our research, Japanese companies in Poland now employ around 53,000 people, making it the fourth largest base for Japanese company employees in the European region after the UK (176,000), Germany (167,000) and France (75,000).

    The largest Japanese employers in Poland are indeed manufacturers such as Sumitomo Electric Industries (Sumitomo Electric Wiring/Bordnetze producing harnesses and Sumitomo Riko producing hoses for the automotive industry) and other automotive suppliers such as NGK Insulators, NSG (automotive glass), Toyota Motor, NSK, Bridgestone and Yazaki.

    Beer and cigarette manufacturers also feature – Asahi after their acquisition of Polish beer brands Tyskie and Lech, and Japan Tobacco has a factory in Poland manufacturing Winston and Camel. A further vice, chocolate, is also manufactured by a Japan headquartered company Lotte, via their 2010 acquisition of Wedel.

    There are some large services sector employers as well – Fujitsu has around 3,000 employees working in its global delivery centres in Katowice and Łódź. However, we estimate around a third of the 200 Japanese companies in Poland have plants there, compared to 16% of the 1000+ Japanese companies in the UK or Germany.

    We may still be missing a few Japanese companies in Poland. There are relatively fewer Japanese expatriates in Poland compared to other countries which host larger numbers of Japanese companies. This may cause some underreporting to database survey companies such as Toyo Keizai, which only records around 130 Japanese companies in Poland, and less than 20,000 employees, compared to our estimates of over 200 companies and 53,000 employees.  There is still a tendency by Japanese companies to locate their Japanese expatriates in Germany, to manage Eastern European subsidiaries and branches from there. The Polish investment agency says there are 300 companies in Poland employing over 40,000, in 2019.

    Cornel Ban, of the Copenhagen Business School, responded to Sharma’s piece by arguing that a high risk of stagnation in countries such as Poland is “baked in”, if they only rely on low labour costs. There is a lack of investment in training and R&D and that “the multinational manufacturing firms that dominate these countries’ export-led growth regimes have few incentives to relocate significant technical innovation systems in the region.”  As far as we can ascertain, there are only a few Japanese companies that are conducting R&D in Poland – Canon Ophthalmic Technologies, Fujitsu‘s FQS in computational chemistry systems and Rigaku in thin films and materials.

    PDF DOWNLOAD OF TOP 30 JAPANESE EMPLOYERS IN POLAND 2021

  • Top 30 Japanese employers in Italy 2021

    Top 30 Japanese employers in Italy 2021

    We’ve just compiled our first ever Top 30 for Japanese employers in Italy (see below for updated 2022 version). We’ve thought for a while that Tōyō Keizai underreported the number of employees in Italy, and that it probably ranked fourth after the UK, Germany and France in terms of numbers employed. Tōyō Keizai records 16,500 employees at 270 companies.  We estimate it’s more like 50,000 employees at 350 or so companies. We were also wondering what might be behind the Japanese Ministry of Foreign Affairs data showing a sudden rise from 300 Japanese companies in Italy in 2018 to 425 to 2019.

    The answer to both puzzles might lie in the fact that the Hitachi group, which was the largest Japanese employer in Italy, acquired various rail businesses from Ansaldo in 2019 and one of its subsidiaries, Hitachi Chemical, acquired FIAMM in 2020.  Hitachi has now dropped one rank, to the second largest Japanese employer in Italy, behind the NTT group, as Hitachi Chemical was acquired by Showa Denko in 2020. Another factor is that the NTT group has also grown substantially in Italy recently, mainly thanks to acquisitions by NTT Data.

    Other large Japanese employers in Italy are the result of earlier acquisitions: Denso has some of its major manufacturing operations in Italy, deriving from acquisitions from Magneti Marelli more than 20 years’ ago. Denso Thermal Systems S.p.A. is now the regional headquarters for the air conditioning manufacturing business.

    Mitsubishi Electric at #5 acquired Italian firm Climaveneta in 2015. Nidec, the 6th largest Japanese employer in Italy, acquired Ansaldo Sistemi Industriali S.p.A. in 2012. Sumitomo Heavy Industries acquired Lafert (electric motors and drives) in 2018.

    So it seems likely the underestimation of Italy lies more in acquisitions unaccounted for than a sudden influx of Japanese greenfield investment.

    Half of the Top 30 Japanese employers in Italy are also in the EMEA region top 30, so would be expected to have substantial presence in Italy too. The acquisitions detailed above show that Italy’s strengths, as far as Japanese companies are concerned, are in engineering – particularly rail and air conditioning. Judging by the companies that are only in the Italy Top 30,  textiles (Toray) and pharmaceuticals (CBC and Takeda) are still attractive sectors for Japanese investment – and of course food – such as the Princes tomato processing plant, owned by Mitsubishi Corporation.

    New 2022 edition

    The 2022 Top 30 has just been published – it can be downloaded from our website here.
     We can provide more detail on the 85 companies within the Top 30 – each company name in full and employee total per company (a truer indicator of size of the company than turnover in our opinion)  for £9.99 – please email us for a PayPal invoice.
  • UK still number one in Europe for Japanese automotive manufacturing – just

    UK still number one in Europe for Japanese automotive manufacturing – just

    The recent news about Nissan and its Chinese battery manufacturing partner Envision deciding to go ahead with expanding the battery plant in Sunderland, to supply a new electric vehicle model, led me to revisit my researches on trends on the Japanese automotive sector in the Europe, Middle East and Africa region. I had blogged in October 2020 that for the first time in at least five years, according to Toyo Keizai data, there were more Japanese automotive manufacturers in Germany than in the UK.

    Toyo Keizai’s new directory came out this April, and adding in their more recent data, it seems that the number of Japanese automotive manufacturers in Germany actually dropped by 11, from 31 to 22. So the UK is back in the top spot. Cross checking this against all data for Japanese companies in Germany, it seems that this is more that those 11 companies switched categories rather than left Germany. Many automotive suppliers of parts supply parts for other industries, so they may have decided that the bulk of their business was no longer automotive, or preferred not to be classified as automotive.  There were also falls in the numbers of Japanese automotive manufacturers in Spain, Russia, Poland and Portugal.

    The number of people employed by Japanese automotive manufacturers is perhaps a better indicator of general health than self classified numbers of companies. The numbers employed by Japanese automotive manufacturers in the UK has dropped by 12% comparing 2015/6 to 2020/21 and by around 8% over the year 2019/20 to 2020/2021.  I only have comparable employee numbers for the rest of the region for the past two years,  and these show that there has been a 2% drop employee numbers from 2019/20 to 2020/2021. The only other notable decrease was in France, where employment fell by 11%. The most growth was in Morocco, but only by 3%.

    So the UK still has the most employees of Japanese automotive manufacturers in the region, but the number of employees has dropped below 30,000 for the first time in five years. The Czech Republic, Germany and Poland are not far behind in terms of employee numbers, and it’s possible Germany still does have more Japanese automotive related manufacturers than the UK, it’s just that they have chosen not to classify themselves as being in the automotive sector. The closure of Honda Swindon and other suppliers to the Swindon plant this month will probably result in the UK losing its top spot both in terms of employees and companies hosted.

    The biggest Japanese automotive employers, apart from the actual car assemblers themselves, are the wire harness suppliers- Yazaki and Sumitomo Electric being the dominant Japan owned companies. Unsurprisingly, they base most of their factories in lower labour cost countries in Eastern Europe and North Africa.

    Overall, Japanese automotive manufacturers employ around 280,000 people in the region, not including those in the supply chain who are wholesale/importing rather than manufacturing.  So it is no wonder that any investment by them is welcome news, but it may take a little more than the recent Nissan announcement to reverse the trends in the UK and across the region.