Craft machine tool sales are sinking amid soaring domestic demand for the durable equipment and a shortage of parts, making them a significant threat to the Japanese economy, according to a study published this week.
The study by the Japanese manufacturing company Koei, published on Thursday, said that the number of craft machine tools sold in Japan declined to an all-time low of 890,000 units in the first half of this year.
It said the market share of the craft machine tool industry in Japan dropped to 3.5% in the period from the previous year, the lowest in the world.
Craft machine tools have become a major target for foreign investors as China continues to expand its own domestic market and Japan is struggling to cope with an ageing population and growing poverty.
The sharp decline in craft machine sales, coupled with an influx of new products, is pushing the country’s economy into an uncharted territory, according the study.
“It is not a situation that is being created overnight,” Koeis CEO Kazuhiko Hasegawa told AFP news agency.
“We see it as an important opportunity for the Japanese business community to increase its share of craft production and exports in the coming years.”
In a bid to boost exports and strengthen its manufacturing base, Koeisa has been building up its plant in Shanghai.
But it has yet to deliver on its ambitious plan to build a factory that will create a quarter of a million jobs.
The firm has been working to raise domestic production capacity, and last year started to build an electric-power plant in Nagoya, the capital of Kyushu prefecture.
“The main reason for our decline in the craft market is because of the ongoing decline in domestic demand,” Hasecawa said.
“But the trend is very different to the situation in 2016.”
Koei said its report found the craft industry had become a “critical target” for foreign firms and that it had invested heavily to expand production capacity and strengthen domestic production.
In the first three months of 2017, Kisei had made over $30bn in sales of machine tools.
Craft sales fell in the second quarter to 2.6 million units, the company said, with the sector accounting for only 0.5 per cent of all sales in Japan.
Despite the slump in sales, Kobei is optimistic about the future.
“Craft is a highly-skilled industry and we have a lot of experience. “
We want to take this opportunity to grow our sales.””
Craft is a highly-skilled industry and we have a lot of experience.
We want to take this opportunity to grow our sales.”