Japanese manufacturers

I read an article the other day in the online version of "economist.com" and it talks about Japanese manufacturers.

I thought you might be interested because products from Japan are really popular.

Basically what it says is that a lot of firms in Japan produce abroad.
Toyota’s chief financial officer, Satoshi Ozawa, said that they wanted to keep domestic production, but they were quickly losing competitiveness. Toyota already produces 58 % of their cars abroad.

There are some reasons why firms go abroad.
One is productivity. Subsidiaries in other countries have profit margins about one-third higher than those of domestic operations.
Second is proximity to consumers in fast-growing economies.
Third are taxes. Japan has the highest tax rate among G20 countries and almost twice that of South Korea.

It is also said that the rise of oversee production may be very good to Japanese firms, but for the country it’s bad. Japan lost domestic production worth 35 trillion Yen (420 billion dollar).

What surprised me most was the fact that so many firms in Japan go abroad. In my opinion, this isn’t good because a lot of people lost their jobs.

Words:

domestic production (inländische Produktion): When you produce a product in Austria, its a domestic production.

subsidiaries (Tochtergesellschaften): Many firms have subsidiaries in other countries.

profit margins (Gewinnspanne): It is good, when the profit margins of a firm is very high.

To see the link, click here!