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Geography Project

Geography Project. Study on Japanese automobile industry Group member: Lam Tsz Wai ,Jenny (12) Lau Chun Yat ,Sai (13) Li Yi Lut, Lawrence (15) Tsoi Wing Ki, Winnie (22)

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Geography Project

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  1. Geography Project Study on Japanese automobile industry Group member: Lam Tsz Wai ,Jenny (12) Lau Chun Yat ,Sai (13) Li Yi Lut, Lawrence (15) Tsoi Wing Ki, Winnie (22) Yeung Sze Lok, Delvin (30)

  2. An overview of automobile industry in Japan • Japan is the world’s largest automobile manufacturer and exporter by number of vehicles manufactured in a year, and has three of the world's ten largest automobile manufacturers. • Currently, 50 million of these high-price products of over 100 million yen are being produced and sold per year worldwide.

  3. 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

  4. 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

  5. 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.

  6. Automobile Industry Spatial distribution • Automobile industry tends to cluster along coastal areas as only 17% of the country is flat land • Mainly found in SE part of Honshu like Tokyo-Yokohama region, Osaka-Kobe region and Aichi region (the base of Toyota) • Some are found in northern Kyushu like Oita and Fukuoka • These locations have the proximity to local market (presence of steel-using industries and large population concentration) • Export of products is also easy with ports

  7. Locational advantages of Osaka-Kobe region • Availability of extensive flat land as automobile factories are space-demanding • Proximity to major cities of the Hanshin region, e.g. Nagoya, Kobe, Osaka • Presence of large local market, with population of about 8.3 million, e.g. Osaka is Japan’s second largest city • Well-developed infrastructure, e.g. Toyota is located at junctions of major highways and railways • Large cities supply scrap metal • Agglomeration of other heavy industries, e.g. iron and steel industry • Coastal location facilitates import and export • Further expansion is possible by reclamation

  8. Kansai region • The largest automobile manufacturer, Toyota, builds most of the manufacturing plants in Nagoya region

  9. Top 3 automobile manufacturers in Japan • Toyota • Nissan • Honda

  10. Toyota Toyota is the biggest automobile manufacturing company in the world. As shown on the next page, the number of cars manufactured by Toyota is the largest.

  11. Toyota has its own production plants on 27 places throughout the world. • IMPLICATIONS: • Multi-point production • + • Trend of globalization

  12. Weld LineTochigi Plant(Nissan) Tsutumi Plant (Toyota)

  13. 3 5 1 2 Characteristics of automobile industry • Energy-demanding • Transport-oriented e.g. port location is crucial • Capital intensive/ Hi-tech industry • Heavy industry • Fabricating industry 4

  14. Relative importance of all locational factors Labour Institutional land Automobile Industry Power Transport Market Port

  15. 1 Market as a locational factor Cost-minimization Heavy products (Cars) i) Distribution cost is lowered ∵ High proximity to large cities or towns (i.e. Osaka, Amagasaki) ii) Price is lowered further sales

  16. Locations of Toyota’s plants in the region of Osaka-Kobei

  17. 2 Market as a locational factor • Collecting information Allow close contact with demands and tastes of consumers Collection of feedback + Quick adaptation of market changes

  18. 1 2 2.Port • Ports along Osaka Bay facilitates • import of raw materials • lower importance of pulling of raw • materials • ii) export of manufactured products • expansion to new markets • cheaper distribution cost using • shipment

  19. 1 3.Transport • Well-developed transport network linking up industries area and large cities (e.g. railway, expressway ) high accessibility to markets

  20. 1 4.Land • Space-demanding industries  Extensive and flat land is required i.e. Along Osaka Bay , large piece of reclaimed land is available for automobile industries Manufacturing Plants

  21. 1 2 3 5.Labour • Well-educated labour is needed for hi-technology used in production • Highly-skilled scientists, engineers and technicians available i.e. Osaka University nearby • Sectoral spatial division of labour

  22. 1 2 Why does the influence of labour decline? Automation and capital-intensive production method demand for labour decreases only small amount of skilled-labour needed high mobility of labour Japan has a lot of universities in other places (e.g. Kyoto University, Tokyo University)  sources of labour supply

  23. 1 6.Raw-material • Steel used as a raw material of components in the production is heavy and bulky • located neared to Iron &Steel plants which are established along the coastal areas  procurement costs lowered  price lowered further sales

  24. 1 Why does the influence of Raw Material decrease? • More and More corporations have set up plants in NICs • Component parts can be made in these plants and shipped back to Japan for fabrication • factor of port is far more important

  25. 1 7.Power Heavy Industry  energy-demanding industry

  26. 1 2 Why is the influence of power not important? • Low availability of power resources in Japan not beneficial to move to such location Use of electricity  flee the industry from the source of power

  27. 1 2 3 8.Institutional • Free trade +Lassie-faire policy are promoted • Market economy is adopted  influence of government is small • No foreign exchange control+ stable and healthy banking and economic foundation  sources of capital is wide

  28. 4 3 5 1 2 Future development • Return of plants and factories to Japan • More new plants in Japan • Mainly for designing new types of cars e.g. Honda building factory • Construct a R&D centre in Japan before 2009 • Toyota investment in Japan is triple to its investment in Europe and the US

  29. 3 1 2 Reasons • Affected by locational factor • labour • raw material • entrepreneur 4

  30. 1 2 labour • Close to headquarters:  As car production, processing becoming more complicated  designers and engineers and skilled labors can be found  supervise the quality of production easier • Better communication and coordination in designing new types of cars can be provided, e.g. oil-saving and eco-friendly car

  31. 1 2 raw material &entrepreneur • Close to raw material supplier so as to reduce cost • Reduce the risk of spreading commercial secret so as to keep commercial secrets confidentially.

  32. Growing automobile production in China • However, in 2010,there is a decreasing trend of car production in Japan, but more in China. • From 10,800,000 to10,000,000 • as china’s cost production is cheaper . e.g. labor cost, rental cost. etc http://news.bbc.co.uk/chinese/trad/hi/newsid_6530000/newsid_6532000/6532063.stm

  33. END

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