geography project study on japanese automobile industry group member: lam tsz wai,jenny (12) lau...
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Geography ProjectGeography Project
Study on Japanese automobile Study on Japanese automobile industryindustry
Group member: Lam Tsz Wai ,Jenny (12)Group member: Lam Tsz Wai ,Jenny (12) Lau Chun Yat ,Sai (13)Lau Chun Yat ,Sai (13) Li Yi Lut, Lawrence (15)Li Yi Lut, Lawrence (15) Tsoi Wing Ki, Winnie (22)Tsoi Wing Ki, Winnie (22) Yeung Sze Lok, Delvin (30)Yeung Sze Lok, Delvin (30)
An overview of An overview of automobile industry in automobile industry in JapanJapan
Japan is the Japan is the world’s largest automobile world’s largest automobile manufacturermanufacturer and exporter by number of and exporter by number of vehicles manufactured in a year, and has vehicles manufactured in a year, and has three of the world's ten largest three of the world's ten largest automobile manufacturers.automobile manufacturers.
Currently, 50 million of these high-price Currently, 50 million of these high-price products of over 100 million yen are being products of over 100 million yen are being produced and sold per year worldwide.produced and sold per year worldwide.
A list showing the world automobile production in 2007
According to the list
Japan ranked no.1 in the world
followed by US (no.2) and PRC (no.3).,
showing the importance of Japan to the world automobile industry
A pie chart showing the export percentage of manufacturing products in 2006,
Automotive industry accounts for 17.2%, which ranks the FIRST POSITION among all industries
Pie chart showing the export of
manufacturing products in 2007.
Automobile accounts for 22.1%,
which is higher than the one in 2006 (17.2%).
Reflecting the increasing
importance of automobile
industry in Japan.
Automobile IndustryAutomobile IndustrySpatial distributionSpatial distribution Automobile industry tends to Automobile industry tends to
cluster along coastal areas as only cluster along coastal areas as only 1717%% of the country is flat land of the country is flat land
Mainly found in SE part of Honshu Mainly found in SE part of Honshu like Tokyo-Yokohama region, like Tokyo-Yokohama region, Osaka-Kobe region and Aichi Osaka-Kobe region and Aichi region (the base of Toyota)region (the base of Toyota)
Some are found in northern Some are found in northern Kyushu like Oita and FukuokaKyushu like Oita and Fukuoka
These locations have the proximity These locations have the proximity to local market (presence of steel-to local market (presence of steel-using industries and large using industries and large population concentration)population concentration)
Export of products is also easy Export of products is also easy with portswith ports
Locational advantages of Locational advantages of Osaka-Kobe regionOsaka-Kobe region
1.1. Availability of extensive flat land as Availability of extensive flat land as automobile factories are space-automobile factories are space-demandingdemanding
2.2. Proximity to major cities of the Hanshin Proximity to major cities of the Hanshin region, e.g. Nagoya, Kobe, Osakaregion, e.g. Nagoya, Kobe, Osaka
3.3. Presence of large local market, with Presence of large local market, with population of about 8.3 million, e.g. population of about 8.3 million, e.g. Osaka is Japan’s second largest cityOsaka is Japan’s second largest city
4.4. Well-developed infrastructure, e.g. Well-developed infrastructure, e.g. Toyota is located at junctions of major Toyota is located at junctions of major highways and railwayshighways and railways
5.5. Large cities supply scrap metalLarge cities supply scrap metal
6.6. Agglomeration of other heavy industries, Agglomeration of other heavy industries, e.g. iron and steel industrye.g. iron and steel industry
7.7. Coastal location facilitates import and Coastal location facilitates import and exportexport
8.8. Further expansion is possible by Further expansion is possible by reclamationreclamation
Kansai regionKansai region The largest automobile manufacturer, Toyota, builds The largest automobile manufacturer, Toyota, builds
most of the manufacturing plants in Nagoya regionmost of the manufacturing plants in Nagoya region
Top 3 automobile Top 3 automobile manufacturers in Japanmanufacturers in Japan
ToyotaToyota
NissanNissan
Honda Honda
ToyotaToyota
Toyota is the biggest automobile Toyota is the biggest automobile manufacturing company in the world.manufacturing company in the world.
As shown on the next page, the number As shown on the next page, the number of cars manufactured by Toyota is the of cars manufactured by Toyota is the largest.largest.
Toyota has its own production
plants on 27 places
throughout the world.
IMPLICATIONS:
•Multi-point production
+
Trend of globalization
Tsutumi Plant (Toyota)
Weld LineTochigi Plant(Nissan)
Characteristics of Characteristics of automobile industryautomobile industry
Energy-demandingEnergy-demanding Transport-oriented e.g. port location is Transport-oriented e.g. port location is
crucialcrucial Capital intensive/ Hi-tech industryCapital intensive/ Hi-tech industry Heavy industryHeavy industry Fabricating industryFabricating industry
Automobile
Industry
Market
Port
Transport
land
Labour
Institutional
Power
Market as a Market as a locational factorlocational factor
Cost-minimizationCost-minimization
Heavy products (Cars)Heavy products (Cars)
i) Distribution cost is lowered i) Distribution cost is lowered ∵ ∵ High proximity to large cities or High proximity to large cities or
towns towns (i.e. Osaka, Amagasaki)(i.e. Osaka, Amagasaki)
ii) Price is lowered ii) Price is lowered further salesfurther sales
Locations of Toyota’s plants in the region of Osaka-Kobei
Collecting informationCollecting information
Allow close contact with Allow close contact with demands and tastes of demands and tastes of consumersconsumers
Collection of feedbackCollection of feedback ++ Quick adaptation of Quick adaptation of market changesmarket changes
Market as a Market as a locational factorlocational factor
2.Por2.Portt Ports along Osaka Bay facilitatesPorts along Osaka Bay facilitates
i)i) import of raw materials import of raw materials lower importance of pulling of raw lower importance of pulling of raw
materialsmaterials
ii) ii) export of manufactured productsexport of manufactured products expansion to new marketsexpansion to new markets cheaper distribution cost using cheaper distribution cost using shipmentshipment
3.Transport3.Transport
Well-developed Well-developed transport network transport network linking up industries linking up industries area and large cities area and large cities (e.g. railway, (e.g. railway, expressway )expressway )
high accessibility to high accessibility to markets markets
4.Land4.Land
Space-demanding industriesSpace-demanding industries
Extensive and flat land is requiredExtensive and flat land is required
i.e. Along Osaka Bay , large piece of i.e. Along Osaka Bay , large piece of reclaimed land is available for automobile reclaimed land is available for automobile industries industries
Manufacturing
Plants
5.Labour 5.Labour
Well-educated labour is needed for hi-Well-educated labour is needed for hi-technology used in productiontechnology used in production
Highly-skilled scientists, engineers and Highly-skilled scientists, engineers and technicians available i.e. Osaka technicians available i.e. Osaka University nearbyUniversity nearby
Sectoral spatial division of labour Sectoral spatial division of labour
Automation and capital-intensive production methodAutomation and capital-intensive production method
demand for labour decreasesdemand for labour decreases
only small amount of skilled-labour neededonly small amount of skilled-labour needed high mobility of labourhigh mobility of labour
Japan has a lot of universities in other places Japan has a lot of universities in other places (e.g. Kyoto University, Tokyo University)(e.g. Kyoto University, Tokyo University)
sources of labour supplysources of labour supply
6.Raw-material6.Raw-material Steel used as a raw material of components in Steel used as a raw material of components in
the production is heavy and bulkythe production is heavy and bulky
located neared to Iron &Steel plants which are located neared to Iron &Steel plants which are established along the coastal areas established along the coastal areas
procurement costs lowered procurement costs lowered
price loweredprice lowered further sales further sales
More and More corporations have More and More corporations have set up plants in NICsset up plants in NICs
Component parts can be made in Component parts can be made in these plants and shipped back these plants and shipped back to Japan for fabricationto Japan for fabrication
factor of port is far more importantfactor of port is far more important
7.Power7.Power
Heavy IndustryHeavy Industry
energy-demanding industryenergy-demanding industry
Low availability of power resources in Japan Low availability of power resources in Japan
not beneficial to move to such locationnot beneficial to move to such location
Use of electricityUse of electricity
flee the industry from the source of powerflee the industry from the source of power
8.Institutional 8.Institutional Free trade +Lassie-faire policy are Free trade +Lassie-faire policy are
promotedpromoted
Market economy is adoptedMarket economy is adopted influence of government is smallinfluence of government is small
No foreign exchange control+ stable and No foreign exchange control+ stable and healthy banking and economic healthy banking and economic foundationfoundation
sources of capital is wide sources of capital is wide
Future developmentFuture development
Return of plants and factories to JapanReturn of plants and factories to Japan More new plants in JapanMore new plants in Japan Mainly for designing new types of carsMainly for designing new types of cars e.g. Honda building factorye.g. Honda building factory Construct a R&D centre in Japan before Construct a R&D centre in Japan before
20092009 Toyota investment in Japan is triple to its Toyota investment in Japan is triple to its
investment in Europe and the USinvestment in Europe and the US
ReasonsReasons
Affected by locational factorAffected by locational factor labourlabour raw materialraw material entrepreneurentrepreneur
labourlabour
Close to headquarters:Close to headquarters:
As car production, processing becoming more As car production, processing becoming more complicatedcomplicated designers and engineers and designers and engineers and skilled laborsskilled labors can can be found be found supervise the quality of production easiersupervise the quality of production easier
Better communication and coordination in Better communication and coordination in designing new designing new types of cars can be provided, types of cars can be provided,
e.g. oil-saving and eco-friendly care.g. oil-saving and eco-friendly car
raw material &raw material &entrepreneurentrepreneur
Close to raw material supplier so as to Close to raw material supplier so as to reduce cost reduce cost
Reduce the risk of spreading commercial Reduce the risk of spreading commercial secret so as to keep commercial secrets secret so as to keep commercial secrets confidentially.confidentially.
Growing automobile Growing automobile production in Chinaproduction in China
However, in 2010,there is a decreasing trend However, in 2010,there is a decreasing trend of car production in Japan, but more in China.of car production in Japan, but more in China.
From 10,800,000 to10,000,000From 10,800,000 to10,000,000 as china’s cost production is cheaperas china’s cost production is cheaper
. e.g. labor cost, rental cost. etc. e.g. labor cost, rental cost. etc
http://news.bbc.co.uk/chinese/trad/hi/newsid_6http://news.bbc.co.uk/chinese/trad/hi/newsid_6530000/newsid_6532000/6532063.stm530000/newsid_6532000/6532063.stm