News & Updates
FY2024 JETRO Survey on Business Conditions for Japanese-Affiliated Companies Overseas (Global Edition)
Dec 26, 2024
-Business confidence is improving. Increasingly competitive environment, especially in Asian markets-
Overview of FY2024 Survey
- From late August to September 2024, JETRO had conducted an online survey on the state of Japanese-affiliated companies (local subsidiaries with at least 10% Japanese investment, branches and representative offices of Japanese companies) in 83 countries/regions selected through JETRO’s overseas office network. A questionnaire was distributed online to 18,186 Japanese companies and valid responses were received from 7,410 respondents. The effective response rate was 40.7%.
- Amid an increasingly challenging environment for international business, including a slowdown in the Chinese economy, heightened geopolitical risks, and increasing protectionist restrictions on trade and investment, we report on the latest trends in the performance outlook and responses to new challenges by Japanese companies in various countries and regions.
Key Findings
- 65.9% of companies expect to be profitable in 2024, the first increase in two years. Strong domestic demand in major countries of the Global South, such as India, Brazil, Mexico, and Vietnam, is driving the improved performance of companies entering these countries. On the other hand, a high percentage of companies in China, Thailand, Germany, and the Netherlands, where there are large concentration of Japanese companies, expect their business performance to deteriorate. In automobile-related industries, many companies do not see prospects for improvement in 2025.
- In the area of future business development, the cautious stance of many companies stands out. The percentage of companies anticipating business expansion stayed at less than 50%, failing to recover to pre-Covid levels. In China, where demand continues to be sluggish, the percentage of companies anticipating business expansion is at an all-time low. Europe is also at its second-lowest level in the past 10 years.
However, only 1% of companies expect to relocate or withdraw from local operations, and even in China, only 1.4% of companies expect to relocate or withdraw from local operations. These low percentages highlight the willingness of Japanese companies to stay in local markets, patiently develop new markets, and diversify their products and services.
On the other hand, Southwest Asia, especially India, where more than 80% of companies indicate an intention to expand their business; the Middle East, led by UAE; and Africa show a marked trend toward business expansion. The rise of countries in the Global South stands out. - Competition in the markets where Japanese companies are operating is becoming even fiercer. In India and Mexico, Japanese companies have increased their relative market share over the past five years, while European and U.S. companies are also expanding their operations in earnest. In Thailand and Vietnam, Chinese companies are accelerating their expansion against the backdrop of U.S.-China conflict and other factors..
In the fiercely competitive Chinese market, local companies have a dominant presence due to their cost competitiveness. Chinese companies are also gaining ground in overseas markets. European and U.S. companies also have a strong presence in emerging markets such as India, Brazil, and UAE..
Cost and price measures are facing limits. Strengthening sales and diversifying products and services may be key.
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Japan External Trade Organization (JETRO)
Research & Analysis Department
International Economy Division
(Representatives: Hirotoshi Ito and Mari Tanaka)
Tel: +81-3-3582-5177