The European summer holidays have come to an end and although we only took short breaks to British locations, where the weather was cool and rainy, I was glad to have avoided the experiences of other Europeans, of unbearable heat.
My business partner in Germany had to cut short her family holiday in Sardinia because of the forest fires – joining the many tourists who were evacuated from Italian and Greek islands. This may have undermined Italian Finance Minister Giancarlo Giorgetti’s claims that the Italian economy could grow by as much as 1.4% in 2023, in expectation of a tourist boom in the first full summer season since the pandemic struck.
A slowdown in the Italian economy was already showing through in the second quarter (April-June) of 2023, with GDP unexpectedly contracting 0.3%. Economists attributed this to low domestic demand, high interest rates, persistent inflation and a lack of net export growth. Industry and agriculture were particularly hard hit, with factory production down in both June and July.
Japanese companies have nonetheless been expanding in Italy over the past year or two, as I discovered through my recently completed my research on the 30 largest Japanese companies in Italy – they now employ over 31,000 people, up around 8% from the previous year, and more than half of the 50,000 or so people in Italy who work for around 400 Japanese companies. This makes Italy joint 4th in Europe alongside the Netherlands in terms of numbers of people employed by Japanese companies, after the UK, Germany and France.
The largest Japanese company in Italy is NTT, thanks to its acquisition via NTT Data of Italy’s Value Team in 2011 and also Spain’s Everis, which had substantial presence in Italy, in 2013. The second largest is Hitachi, which completed its acquisition of Ansaldo STS, an Italian rail systems company, in 2019.
The biggest growth in employee numbers recently, however, were at Daikin and Panasonic, thanks to their acquisitions of Italian HVAC companies. Italy has been more proactive than other European countries in giving tax credits worth up to 110 per cent of the cost of energy efficiency upgrades. This has boosted sales of heat pumps to be the seventh highest in Europe last year.
Other countries besides Japan have woken up to the opportunity that Europe’s wish to reduce dependency on Russia and tackle climate change brings. China’s Midea is planning to build a heat pump factory in Italy, and Germany’s Bosch and Vaillant are expanding. The USA’s Carrier Global has spent €12bn on acquiring Germany’s heating equipment company Viessmann.
Here in the UK there are grants available for heat pumps but the lowest take up in Europe for heat pumps. This is explained by low gas prices (which fires most of our central heating) relative to electricity, the need for planning permission for heat pump installations, a lack of skilled labour to install the pumps and our miserable weather, which means we are not so interested in the air cooling side of heat pumps.
This article by Pernille Rudlin was first published in Japanese in the Teikoku News, 13th September 2023
A list of the 30 largest Japanese corporate groups in Italy can be downloaded for free here
For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。Read More