Japan | Power Systems Research

2025-08-16

CEMA Sees 3% Decline in FY2025 Shipments

CEMA (The Japan Construction Equipment Manufacturers Association) said it expects domestic shipments of construction equipment in fiscal 2025 to decline 3% YOY to US$ 19.65 billion (2.8488 trillion yen). This reflects declining capital investment sentiment due to rising interest rates and the impact of the Trump administration’s tariff policies.

Exports are also expected to decline by 3%, reaching US$ 13.60 billion (1.9717 trillion yen). Sales of hydraulic and mini excavators, the mainstay products, are expected to decline. Domestic sales are expected to decrease by 4%, down US$ 365.5million (52.9 billion yen) from the previous forecast, to US$ 6.05 billion USD (877.1 billion yen). Companies are expected to reduce their capital investment due to concerns about increased borrowing costs associated with rising interest rates.

Categories: Construction, Japan, Production

Office: Japan Office

2025-07-26

Mitsubishi Logisnext To Electrify 90% of its Forklifts

Akihiro Komuro

Mitsubishi Logisnext plans to increase the electrification rate of its forklifts from approximately 60% to 90% by 2035. The company has its roots in Mitsubishi Heavy Industries and Nissan Motor Co., Ltd., and it specializes in high-output engine vehicles. However, the global electrification rate has already surpassed 70%, with Chinese companies leading the way in technology. To catch up, the company is introducing new models in China that align with the trend toward electrification.

“The price of lithium-ion batteries has dropped, which has led to increased customer demand for electric forklifts,” said President Maeno of Mitsubishi Logisnext. He highlighted the need to expand the company’s product lineup to meet market needs. As part of this strategy, the company plans to introduce a locally produced electric vehicle model in China by the 2025 fiscal year. The key feature is thorough “localization.” The company has adopted locally sourced batteries, motors, hydraulic components, and other parts to reduce prices to levels comparable to those of Chinese manufacturers. Until now, the company has sold vehicles developed in Japan but has struggled against low-priced local competitors. In China, battery prices have fallen rapidly due to the increased popularity of electric vehicles (EVs). Mitsubishi Logisnext has adopted a “when in Rome, do as the Romans do” strategy to counter this trend. Depending on sales performance, the company plans to expand into markets such as Southeast Asia.

Categories: Batteries, Electrification, Industrial, Japan, Production

Office: Japan Office

Major Shipbuilder Secures U.S. Military Ship Orders

Akihiro Komuro

South Korea is collaborating with the government and private sector to strengthen its ties with the U.S. in the shipbuilding industry. Major companies, such as HD Hyundai Heavy Industries, are establishing bases in the U.S., and the government is supporting efforts to train individuals. They are taking advantage of the Trump administration’s push to revive the shipbuilding industry to gain a share of the market for building and repairing military ships. South Korea aims to catch up with China, which holds over half of the global shipbuilding market share, by leveraging its alliance with the US.

In late June, HD Hyundai emphasized its partnership with Edison Chouest Offshore (ECO), a U.S. shipbuilding company. The two companies plan to build LNG-fueled container ships together by 2028. ECO has five commercial shipbuilding bases in the US and specializes in offshore support vessels (OSVs); however, orders have been sluggish in recent years.

Categories: Japan, Marine, Production

Office: Japan Office

2025-06-22

What Will Happen in Hino, Mitsubishi Fuso Merger?

Akihiro Komuro

Hino Motors and Mitsubishi Fuso Truck and Bus Corporation have reached a final agreement to merge their operations in April 2026, but what will this mean? A basic agreement was initially reached in 2023, but the decision was delayed due to irregularities in Hino’s engine performance certifications. The merger will finally move forward following Hino’s settlement with U.S. authorities.

The commercial vehicle industry has undergone rapid changes over the past two years of stalled negotiations, so both companies will need to quickly demonstrate the benefits of the merger to make up for lost time. The biggest change is the tightening of environmental regulations.

In May 2024, the European Union (EU) strengthened CO₂ emission regulations for large trucks. By 2030, emissions must be reduced by 45% compared to 2019 levels. This is an increase from the previous target of 30%. By 2040, emissions must be reduced by 90%, a very strict requirement.

Categories: Commercial Vehicles, Japan, Mergers & Acquisitions, Passenger Cars, Minivans, and SUVs, Production

Office: Japan Office

South Korea’s LG Energy Withdraws Expansion Plans

Akihiro Komuro

LG Energy Solution, a major company in South Korea, has withdrawn its investment plan for a materials factory. The company cited a slowdown in the electric vehicle (EV) market and a diminishing competitive advantage in Indonesia, where nickel is widely produced, as reasons for the decision.

Battery production involves processes from material manufacturing to productization, and the withdrawn plans included the construction of a nickel smelter for the main cathode material, as well as the production of cathode precursors and other materials.

Categories: Batteries, EV, Japan, Production

Office: Japan Office

2025-05-25

Komatsu Reports $650 Million USD Impact of US Tariffs

Akihiro Komuro

Komatsu announced that its consolidated net income for the fiscal year ending March 2026 is expected to decrease by 30% year on year to 309 billion yen. This is lower than the market forecast of 403 billion yen. The U.S. administration’s tariff policy will have a negative impact of $650 Million USD (94.3 billion yen). The exchange rate assumption of 1 yen = 135 yen (compared with 152.8 yen in the previous fiscal year) is also a factor, as it reflects an appreciation of the yen by approximately 8 yen compared with the current market rate.

Of the 943 billion yen, 785 billion yen is attributable to increased production costs due to tariffs, and 158 billion yen is attributable to a decrease in sales volume due to reduced demand.

Categories: Economics, Financial, Japan, Tariff

Office: Japan Office

Japan Engine Conducts Final Tests on Ammonia Marine Engine

Akihiro Komuro

Japan Engine Corporation, a manufacturer of marine engines, says it has begun final testing of a new engine that uses a fuel mixture of ammonia and heavy fuel oil. The testing involves running the engine alone in a factory to confirm safety and to check for abnormal behavior. Testing is expected to be completed by September, with production planned to begin in October.

The large, low-speed marine engine developed by the company can burn up to 95% ammonia (by heat ratio) mixed with heavy fuel oil. The engine used in this trial will be installed in an ammonia carrier ship currently under development with Nippon Yusen and others. The ship is expected to be completed in fiscal 2026.

Categories: Alternative Power, Japan, Production

Office: Japan Office

2025-04-20

KG Motors To Mass-Produce Ultra-Compact EVs

Akihiro Komuro

KG Motors, which manufactures and sells the ultra-compact “mibot” EV, is moving toward mass production of the units. It will start mass production in October 2025 at an assembly plant it has built near its headquarters. The company plans to produce 300 units in FY2025, 3,000 units in FY2026, and 10,000 units in FY2027.

The mibot is a one-person vehicle designed for short-distance travel, with a range of 100 kilometers per charge. The planned price at the time of mass production is 1.1 million yen ($7,700 USD), including consumption tax.

The assembly plant in Higashi Hiroshima City consists of a single production line with a main line of seven processes and a subline of four processes. Since there are only a few parts, the number of processes is less than that of a normal automobile production line.

Categories: Electrification, eMobility, Japan, Passenger Cars, Minivans, and SUVs, Production

Office: Japan Office

Honda To Launch Electric Motorcycles in Vietnam

Akihiro Komuro

Honda plans to launch an electric motorcycle in Vietnam this month. The suggested retail price is less than 29 million VND (about $1183) without battery. The company is targeting the younger generation, who often use motorcycles to commute to school.

The name of the motorcycle to be sold is “ICON e:”. It will be manufactured at the company’s Binh Phuoc plant in northern Vietnam and will initially be sold through authorized dealers in seven provinces and cities. The maximum speed is 48 km/h, and it takes about 8 hours to charge the battery from zero to full. The maximum distance that can be traveled on a full charge is 71 kilometers. Because it does not require a driver’s license, which can be obtained at age 18, it is expected to be used by high school students on their way to school.

Categories: Electrification, Japan, Motorcycles, Production, Recreational Products, Vietnam

Office: Japan Office

US Tariffs Could Hurt Japan GDP

Akihiro Komuro

On April 12, as I write this, things are still in flux. There is a lot of media coverage every day, with reports on the tariffs reaching almost hysterical levels. The reciprocal tariff rate for Japan announced by the U.S. is 24%, which is an unexpectedly high level given the past relationship between the two countries.

As a result, Japan’s real GDP is expected to fall by about 0.6% in the short term (2025) and 1.8% in the medium term (2029). This will have a huge impact on Japan, which has maintained a growth rate of around 3% per year. It has been reported that Japan is currently negotiating with the Trump administration, but it is doubtful whether the current Japanese government will be able to negotiate effectively with the US. We will see whether the terms will be reconsidered after the negotiations in the future.

I would just like to point out one thing: President Trump talks about Japan’s failure to buy American cars as unfair and negligent, but this is a clear mistake. It is true that American cars do not sell well in Japan. GM is the only company with a formal dealer network in Japan, and it is even hard to find GM dealer shops in Japan. Chrysler pulled out in 2018 and Ford in 2016.

Categories: Economics, Japan, Tariff

Office: Japan Office

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