Made in Japan Ain't What It Was

http://www.bloombergview.com/articles/2015-11-04/detroit-underestimated-japan-lexus-is-doing-the-same-to-china-igklj2sw

by akg_67 • 11 years ago

50 37 11 years ago

sotojuan• 11 years ago

I wonder if this is true in clothing. Upscale Japanese clothing is known to be some of the most well constructed (and expensive) out there. Particularly, Japanese denim is highly regarded. The reasons for this is because these clothes are usually made by hand by experts tailors or at least well trained ones, but the reputation might have something to do with it too.

Consider luxury goods makers: Investors don't buy their stock because they've got cool labels, but because their brands allow them to charge higher prices and earn better margins.

True. For example, I see some Japanese clothing brands price a button up shirt in the 200s, sometimes more, but they always sell out (to be fair, they usually make few of those shirts). European brands of similar qualities usually don't make it to that price and if they do, they rarely seem sell as much.

There are always exceptions and there are always brands that take advantage of Japan's reputation, just like when "Made in Italy" means "made as poorly as in a cheap sweatshop in China but in Italy". Overall, though, I haven't noticed any complaints in the clothing forums I visit. Perhaps a drop in quality is imminent in middle and upper-middle tier brands, not the upscale ones.

I'd be interested in seeing the margins for upscale luxury clothing, particularly men's.

ryuker162• 11 years ago

The only mainstream Japanese clothing brand in the USA is Uniqlo which is H&M quality....Denim gets sold online but that's about it. We could use some more Muji!

gesman2• 11 years ago

Not so fast. Car manufacturing is a different beast. Japan made consumer goods are very decent quality still.

Then of course when 95% of crap around is from China - its not that difficult to stand out.

And i'd rather pay a premium for Japanese made product than to pay for China made junk same price as if it was made in USA.

chillacy2• 11 years ago

There was a time when U.S. manufacturers looked down on their Japanese rivals as purveyors of cheap, low-quality knockoffs. That 1960s conventional wisdom is taught these days in business schools as one of history's most glaring examples of corporate hubris.

Aren't you just falling into the same assumption? Japan's auto industry was known for making "junk" for awhile (toyota reverse engineered chrystler models of the time), then they really took off and built a reputation for quality. The point of the article is that the same may be happening again, just substitute japan for china and the US for japan. History rhymes.

gesman2• 11 years ago

I just accepted a job offer to relocate myself to USA, CA, SF.

Renting a car for now. First month was Chevrolet. Lowest life piece of junk ever driven. Eats gas really well but refuses to accelerate without counseling.

Back where i live I owned Chrysler 300S, 4WD, 5.7L, v8. Best car ever driven.

Bottom line - only high end american cars are decent. And seriously well built. Anything below that is a wall-mart-ish compromise.

Now i renting Kia Soul. Ugliest looking vehicle ever driven.

Yet: Consumes fuel like a bicycle, leaves all local "coolios" behind on HWY 280 like a charm. Asians do have a sense to build a lovely cars today if you can live with occasional weirdness. Foundation is good.

Having said that - asian-built stuff in consumer space is hit and miss giving 75% to miss.

I used to do professional photography. That's where the camera cost $8K - just the body. Top notch quality.

Top notch performance.

Top notch reliability.

It was - Canon 1-class.

Guess where it was made in?

Hint: 5-letter country, and the first letter is not "C".

pluma• 11 years ago

On a related note: as a non-American who is therefore missing out on the patriotism, the label "made in the USA" doesn't inspire any confidence in me -- at least for clothing and apparel.

My most recent example of this would be a not-cheap messenger bag that had problems both in terms of quality of the materials used (e.g. cheap zippers) as well as the manufacturing quality (e.g. the zippers weren't sewn on properly and would frequently jam) -- even the design had problems (e.g. a magnet covered by fabric in a place where it would be exposed to so much friction during everyday use the fabric wore out within one month or so).

SwellJoe2• 11 years ago

I'm from the US, and I don't have any confidence in the quality of products made in the USA. It was always a running joke with my dad that something must have been made in the USA if it failed catastrophically or in dangerous ways almost immediately after purchase (because my family had a run of buying hilariously bad/dangerous products that happened to be made in the USA).

I avoided American made cars, and chose Japanese manufactured cars, for most of my life because of my personal bias and mistrust of American car quality. I've recently, in the past few years, begun to accept that Ford makes a decent vehicle (and have owned a motorhome built on a Ford chassis, and now own a big Ford diesel pickup truck, and have been quite satisfied with both). But, even now, I don't think I would give a "home team" advantage to American products. I definitely don't assume they're higher quality on that basis. I still prefer American products if I'm choosing between Chinese and American made, but mostly because I have a reasonable expectation that the American made product had some human rights protections for the workers making the product. There are well-made American products, but it's rarely a mass-produced consumer good.

melted• 11 years ago

A lot of Japanese cars are made in the USA. A lot of US cars, on the other hand, are made in Mexico.

panglott• 11 years ago

After I moved from the US to Japan for a few years before spending a couple months backpacking around China, I concluded that Japan has the highest-quality consumer goods, China had the cheapest goods, and America had the best-value goods.

This article is pretty bad, of course. It has no real quantitative measures, just a couple of auto industry quality scandals. That sort of thing happens everywhere, but Takata and VW are just in the news right now.

nextos• 11 years ago

This is somehow paradoxical. Items such as fine clothing are thought to be of much better quality if they come from Japan:

http://www.wsj.com/articles/SB100014240529702045424045771572...

http://www.smithsonianmag.com/travel/how-japan-copied-americ...

Htsthbjig• 11 years ago

I lived for 5 years or so in China and some years in Korea and Japan (and US). I am European.

I believe this piece is total non sense.

Japan is not what it used to be because they are getting older and older and because they have accumulated so much debt, but their products are as good as ever.

The country is extremely depressed if you talk with the people living there. With Abenomics and all the financial repression people get poorer every day. Their savings evaporate, future is dark.

On the other side, China economic boom made poor people feel great about the future. You could sense optimism whenever you were.

But in my opinion, China was(and is) a big bubble. Smart money wants to get out of China as soon as they can and need a greater fool to buy their investments. Smart money controls Bloomberg like a Puppeteer a puppet.

bostonpete• 11 years ago

Smart money controls Bloomberg like a Puppeteer a puppet.

I don't know much about Bloomberg -- is there evidence out there that backs up this sentiment or is it just derived from a sort of "the-powerful-are-all-in-cohoots" cynicism?

qnaal• 11 years ago

they all have access to way better information than we can easily get

rtpg• 11 years ago

With Abenomics and all the financial repression people get poorer every day. Their savings evaporate, future is dark.

Despite the 40% or so depreciation of the yen over the past 3 years, actual cost of living has only gone up something like 5 %. And a lot of that was due to the recent sales tax increase from 5% to 8% (supposedly)

Say what you will about QE, but the depreciation of the Yen basically stopped Sony and others from going completely insolvent. Dropping the value of the yen sucks a lot for things like travelling (and hey, now I have less money in absolute terms), but there was a very scary future in store if the yen kept its insanely overvalued position.

Anyways, this article is a bit of a stretch. There is the airbag thing which is terrible, but comparing Sony to Apple is comparing one extreme to another. There's some opportunities for Japanese companies, but I don't see how it's related to quality concerns.

adventured• 11 years ago

The real problem with what's happening to the Yen, is that it hasn't even begun to scratch the surface of alleviating their problem: debt.

It's that debt that leaves their budget a disaster, requiring so much of it just for the interest on the debt. It's that debt that has robbed Japan of growth for so many years.

For preliminary 2015 figures on GDP per capita, they've crashed down to #24 thanks to the erosion of the value of the Yen - to $32,000 or so. That puts them below Israel and New Zealand, countries they towered over for decades on that metric. By comparison South Korea is at $27k and Spain is at $26k; at the present rate of Yen destruction (which is to say if they continue with their failed currency debasement attempt to inflate away their debt) it won't be more than a couple of years before Japan falls below that line. Next up after that is Taiwan at $22,000 per capita - another lost decade filled with debacles like Abenomics will get them down to that level. There's only so much you can erode before it begins to unravel the standard of living Japan has enjoyed for decades.

At one time their economy was a force to be reckoned with. Now it's a mere 22% the size of the US economy and shrinking. They had caught up to the US in GDP per capita in 1987. Soon the US is going to be at double their GDP per capita number. How will Japan be able to afford the care of their elderly, their debt service, the cost of infrastructure, the capital needed to invest into the future (R&D, science, et al.)? At this rate, they won't.

wozniacki• 11 years ago

  Smart money controls Bloomberg like a Puppeteer a puppet.

Are you referring to the television network's general long-standing slant on the phantom nature of the Chinese economy?

Please elaborate.

jhulla• 11 years ago

QE in Japan is another beast altogether. The Bank of Japan openly buys Japanese stock ETFs:

http://www.bloomberg.com/news/articles/2015-10-28/owning-hal...

Ponzi himself would blush in shame over this.

vanilla-almond• 11 years ago

In the UK, Japanese cars still have a good reputation for being practical and reliable. Other brands tend to occupy the more luxury or premium end of the scale in the minds of consumers. But as this survey shows, these more expenisve cars aren't necessarily more reliable. A survey of 50,000 UK car owners from earlier this year found Japanese cars the most dependable

http://www.bbc.co.uk/news/business-32332210

Edit: just to add, this is a good article from April 2013 about Japanese companies that once dominated consumer electronics. One of these companies, Hitachi has withdrawn from the conumer market and returned to its core business of heavy engineering e.g. high-speed trains (new high speed trains for the UK rail system are currently being built by Hitachi)

http://www.bbc.co.uk/news/world-asia-21992700

alricb3• 11 years ago

Bit of nonsense there:

Yamamoto [president of Lexus] should heed what his local peers are doing, and look for ways to move more production offshore. As Apple demonstrates, a widely dispersed supply chain can be quite consistent with premium branding.

Cars and consumer electronics are completely different. Apple products are made of chips made in huge fabs, LCDs made in special factories, PCBs populated by machines, and a bit of special sauce here and there (Aluminium casings, gorilla glass, etc.)

Car manufacturing is just much heavier, just like the products.

nv-vn• 11 years ago

I also thought the fact that the author was suggesting moving the factories instead of working to fix the problem was pretty non-sensical.

NamTaf2• 11 years ago

How do you think cars are made?

edit: I'm not suggesting you're wrong in saying that the premise of the article is bad, but I'm surprised by your argument between phones and cars.

alricb3• 11 years ago

Cars are made with stamping presses and assembly lines; you also need a foundry to cast the engine blocks. All these things are expensive and take quite a while to set up.

OTOH, pick and place machines are fairly cheap and can be installed quickly; the R&D to make a phone is huge, but once you're done you can set up production almost anywhere in relatively little time. Obviously it'll be easier if you're close to your PCB and plastic suppliers.

seanmcdirmid• 11 years ago

Toyota in China (made in China) is crap compared to Toyota everywhere else. One thing: the factories don't invest much in automation given cheap labor costs. But a robot is going to be much more precise than a human, so the resulting product shows many more imperfections.

I wouldn't be surprised if the data on quality in China is incredibly fudged. China isn't known for releasing great accurate statistics.

titomc• 11 years ago

I drive a Nissan because I trust it more than an American made car in terms of reliability. I have had several experiences from my friends who drive an American made car. The recent Chrylser exploit nailed it. This article smells like an aptly timed smear campaign coming from an American mediahouse.

sengork• 11 years ago

Korea is the new (or another?) Japan when it comes to quality of goods.

bigger_cheese• 11 years ago

Anecdotally I dispute this. I used to drive a 2001 make Kia Rio (Korean car) I had many aggravating and expensive problems with it (power steering, Clutch and finally gearbox) It had a moderate amount of KM's on it but not excessive. For first 7 years I had no problem but after that every six months something seemed to go wrong with it.

I now have a Toyota Yarris it is about to reach 4 year old mark so far no problems.

Scuds• 11 years ago

2001 is fourteen years ago and Hyundai/Kia have been making dramatic strides in design and quality since then.

Reputations going back 15 - 30 years have little bearing on what's on the lot new today, this is especially true for GM and Hyundai/Kia.

biot• 11 years ago

So, four years in, the reliability of your Toyota is exactly the same as it was with the Kia? No problem?

ryuker162• 11 years ago

Japan used to outsource a lot of production to Korea or do co-manufacturing.

Quality varies depending on the product.

a_bonobo• 11 years ago

Cars that are made in China have a lower fault rate than those in the U.S., according to J.D. Power

I looked at the J. D. Power assessment [1] and they are IMHO hard to compare:

The 2015 China Initial Quality Study (IQS) is based on evaluations from 21,707 owners of new vehicles purchased between October 2014 and June 2015.
For 2015, the China IQS has been redesigned to include more specific diagnostic questions around eight problem categories [snip]

Now if you look at the same report for the US [2] you'll notice that there's no note of a redesigned questionnaire, which makes me doubt that you can compare both results if they're not gathered the same way. The US report also has four times as many participants (84k vs 21k) which may have skewed the results. In fact, it's hard to gauge the methods in general, very little detail.

In the end, the problems reported in the Chinese report aren't particularly severe:

Unpleasant interior smell/odor is the most frequently reported as well as the most severe problem this year

I feel like that's an issue that doesn't have much to do with the car's actual quality (and it's also relatively easy to fix/cheat). It doesn't appear in the US report, which is weird - I'd expect the same brands to have the same problems (or is differences in smell a cultural thing?)

[1] http://china.jdpower.com/sites/default/files/2015169_china_i...

[2] http://www.jdpower.com/sites/default/files/2015080_IQS.pdf

drited• 11 years ago

The argument that low margins are an indicator of inability to charge higher prices or declining brand strength doesn't hold water. Sony had had crappy margins for a long time and the reasons relate more to competition (they don't enjoy barriers to entry like Apple and have to pay up for marketing and R&D to maintain their brand perception) and poor corporate governance (lack of impetus to run the company efficiently) than an ability to charge high prices and/or a decline in brand quality.

umutisik• 11 years ago

"The quality of Japanese cars sold in the U.S. fell below the industry average this year, trailing Korean and European models, according to J.D. Power."

Consumer reports thinks that Toyota (and Lexus) and Honda make top quality cars for their price points. The average Japanese car may be of lower quality than the average European car but this doesn't mean any standards are eroding. I am not sure how you get from this, Takata, and one crooked building to how they are not what they used to be and should send more work offshore.

Not every company can be Apple and most industries don't have high margins. I think Japan should stick to what it does best and outsource as little as possible -- but try to improve the quality of their industrial design. The weaker Yen is an attempt to make Japan competitive in this model.

Made in Japan Ain't What It Was

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