Japan's Enduring Appeal for Global Business

Christian Mecker
President and Representative Director
Bosch Corporation

January 2025

While emerging economies such as India and China often dominate investment discussions, Bosch's commitment to Japan remains solid over a century after establishing their presence in the country. The German engineering giant currently employs some 6,400 people (as of 2023) here across the entire value chain, and it further strengthened its commitment to Japan by opening a futuristic new headquarters in Yokohama's Tsuzuki Ward recently. The new HQ consolidates various divisions, including its mobility sector operations and an R&D center, from Tokyo and Yokohama under one roof.

Christian Mecker, President and Representative Director of Bosch Corporation, sees Japan as a cornerstone of the company's global strategy, pointing to the market's stability and technological acumen as key attractions for long-term investors.

Despite the common perception of Japan as a challenging market for foreign companies, Mecker sees a compelling reason for investment: "With our Japanese customers, if we invest, and we deliver on that investment, we are highly confident we'll keep those customers for many years." He says, "Compared to many other cultures, long-term relationships are very important in Japan."

Mecker sees Japan's stability as a key advantage for investors, stating, "There are those that see challenges in the Japanese economy. But it is a stable economy, and I have confidence that it will continue to be so. Maybe not with huge growth, but at least it's stable." This stability provides a solid foundation for long-term investment planning, with less risk than in many other markets.

For a global leader in automotive components and systems like Bosch, Japan is an essential market to be in: the country remains a powerhouse of global automotive manufacturing, accounting for some 30% of global production.^*1 What's more, over half of the domestically produced vehicles are exported, highlighting Japan's role not just as a local market but as a global manufacturing hub.

In another demonstration of the company's commitment to Japan, Bosch chose to establish its first global business unit outside Germany in Yokohama. The decision to locate the Two-Wheeler and Powersports unit in Japan was largely driven by proximity to major customers—Japanese brands are global leaders in the motorcycle industry. And it will celebrate its 10th anniversary in 2025. The unit manages worldwide operations from Japan, supporting customers across North America, India, and Europe.

Bosch's new Yokohama headquarters represents more than just a real estate investment. The facility, which can accommodate more than 2,000 employees, is also the site of the Tsuzuki Ward Cultural Center (also known as Bosch Hall), marking the company's first such public-private partnership and demonstrating Bosch's commitment to the community—another important aspect of success in Japan.

"We really are thankful to Tsuzuki Ward for allowing us to construct this wonderful building here," Mecker says. The facility includes public spaces like the café 1886 at Bosch, open to the public. Bosch and Tsuzuki Ward have concluded a comprehensive partnership agreement to invigorate the local community, naming Bosch's new headquarters, Bosch Hall, and the all-weather plaza as “Bosch Forum Tsuzuki”. Bosch is also planning to co-host events and cultural programs at Bosch Forum Tsuzuki, demonstrating the company's dedication to playing an active role in the local community.

With more than a century of experience in Japan, Bosch has learned valuable lessons about succeeding in this unique market. Mecker emphasizes three critical factors: patience, long-term commitment, and having the right people on the ground—which means more than just hiring people who speak good English.

"Don't expect that after one year, you will convince customers and already get very big business. It takes time. You need to build trust," says Mecker. He notes that business relationships in Japan tend to be built on personal trust, which translates into corporate commitment.

The company's strategy involves maintaining a complete value chain in Japan for key products, including research and development, manufacturing, and sales. This local-to-local presence has been crucial in building credibility with Japanese customers, who value suppliers that demonstrate a deep understanding of and commitment to the market.

Despite Japan's mature market status, Mecker identifies several promising growth areas, particularly in the mobility sector. The transformation toward software-defined vehicles, electrification, and autonomous driving presents significant opportunities. Notably, Japan's aging population is driving labor shortages, making automation and mobility solutions increasingly essential.

Bosch is actively investing in these areas, launching new production lines in 2022 for the iBooster (an electromechanical brake booster for all drivetrain configurations, especially for hybrid and electric vehicles) at the Tochigi Plant, and electric power steering final assembly at the Musashi Plant in Saitama. Meanwhile, the Bosch Group, at a global level, is also expanding through strategic acquisitions: it recently announced to acquire residential and light commercial HVAC business from Johnson Controls and Hitachi, which will be integrated into the Bosch Home Comfort Group to drive economies of scale. The acquisition is expected to be closed sometime during 2025.

For companies considering entering the Japanese market, Mecker's message is clear: "Trust and give this market a chance. There is business to be made." His enthusiasm extends beyond business opportunities—after many years in Japan, he particularly values the country's exceptional personal safety and the respect people show each other in everyday interactions.

While the path to success may require more patience than other markets, he emphasizes that Japan's combination of market stability, technological advancement and relationship-based business culture creates unique opportunities for long-term success. The key, as Bosch's 100-plus-year journey in Japan demonstrates, lies in making a genuine commitment to the market, understanding its distinct business culture, and building trust through consistent delivery.