2012 will be a critical year for Japanese shipbuilders when they would stand at the crossroads of life and death.
Japanese yards are going through a tough time in competitions with Korea and China due to strong yen. If Japan leaves current situation unchanged, many builders would empty out their orderbook by 2014.
Industry restructuring would not overcome the crisis entirely, so there needs decisive strategies, such as tie-up with emerging companies in Asia, etc.
At the end of 2011, Mitsubishi Heavy Industries announced that it would provide construction or design technology for commercial ship to India's L&T, a major construction and machinery company. This is a strategic change, considering its record of passive technology cooperation with overseas companies.
Mitsubishi seemed that it would not only secure technical royalty, but also possibly develop into operative cooperation, in the long term.
Kawasaki Heavy Industries has already started overseas production in a joint-venture yard in China, to survive tough competition with China and Korea by cutting costs.
According to Japan Ship Exporter’s Association, Japan's new order for export ship in the first 11 months in 2011 declined by about 20% on the same period a year earlier, only one third of that in 2006.
Because of strong yen, financial troubles in Europe, etc., new order recovery would be hard to expect in 2012.
Japan's competitive vessels of bulker or boxship continue to be swamped in depression. Therefore, Japan should improve cost competitiveness by cooperating with overseas companies and keep operation in Japanese yards by reinforcing high-value sectors, such as cruiseship, etc.
Yard restructuring is not enough to overcome the crisis. Universal Shipbuilding continues negotiations on management integration with IHIMU, however, they have not made decisions yet.
In a situation of getting left way behind from China and Korea, Japan should take a bold and prompt measure.