By Rina Ukita and Daisuke Narahashi

Yomiuri Shimbun Staff Writers

The Japanese shipbuilding industry is set to expand investment in hopes of regaining its global status, with the nation's private sector planning to spend 350 billion yen on the effort by 2035.

Yukito Higaki, chairman of the Shipbuilders' Association of Japan, announced the investment plan recently at a related meeting of the ruling Liberal Democratic Party. Higaki, who also serves as president and CEO of Imabari Shipbuilding Co., asked the government to lend large-scale support to the initiative.

In fact, Prime Minister Sanae Takaichi aims to strengthen government support as a matter of economic security. Concerted effort is said to be needed from both the private and public sectors, as Japan currently lags far behind against rivals China and South Korea in the global market.

Higaki and other members of the association explained the industry's investment plan at a joint meeting of two LDP organizations with connections to the matter -- the Special Committee on Marine Transportation and Shipbuilding and the Headquarters for the Promotion of Economic Security -- held Thursday morning.

The investment plan is aligned with the Land, Infrastructure, Transport and Tourism Ministry's target of increasing Japan's annual shipbuilding volume to about 18 million tons -- an increase of about 100% -- by 2035. It is estimated that over 1 trillion yen in investments will be needed to hit this target. Thus the industry's intended investment will cover about 30% of the required funds.

The representatives of the shipbuilding industry also requested the government to establish a fund that can be used until 2035 to cover the remaining roughly 700 billion yen. One member was quoted as saying at the meeting, "We need government support to rejuvenate (the industry), which plays a crucial role in (Japan's) economic security."

The LDP has decided to back up the transport ministry's target. The party aims to devise concrete measures to support the shipbuilding industry under economic policies directed by Takaichi. "We will work hard to establish this fund," said Takayuki Kobayashi, chairperson of the LDP's Policy Research Council, at the Thursday meeting. "We have to move forward with this as a joint effort between the public and private sectors in the truest sense."

Catching up with China, South Korea

This large-scale investment plan reflects a shared sense of urgency across the Japanese shipbuilding industry, as the global market is currently dominated by China and South Korea.

Japan relies on maritime transport for 99% of its trade. In 1994, it ranked first in global shipbuilding volume, accounting for about 40% of the total. However, by 2024, the proportion had fallen to about 10% in preliminary figures.

Over the intervening years, China and South Korea emerged at the head of the pack. Their governments took the initiative to reorganize their respective shipbuilding industries and provide subsidies to shipbuilders, which resulted in those firms growing. In 2024, China accounted for about half of global shipbuilding volume, with South Korea taking another 30%.

During this period, investment by Japanese companies was mostly directed toward updating aging facilities and equipment. However, doubling shipbuilding volume requires productivity to be improved, so the Japanese shipbuilding industry plans to make a series of capital investments to let them bring in large cranes, robots and other equipment that can shorten construction periods. However, large cranes generally take about seven years to deliver. Japanese shipbuilders are pinning their hopes on the establishment of the government fund, which they believe will create an environment in which companies will feel safe making investments.

Efforts toward decarbonization hold another key to revitalizing the Japanese shipbuilding industry. The International Maritime Organization, which sets standards for international shipping, has set a goal of achieving net-zero greenhouse gas emissions from international shipping by around 2050. Japan is considered a major leader in the development of hydrogen and ammonia engine technology, so it will be important to realize joint public-private investment to expedite the construction of next-generation ships.

Shipbuilding has become an area of cooperation between Japan and the United States based on an agreement reached after tariff negotiations. In order for the two countries to be able to work together effectively, Japan must prioritize reinforcing the foundation of its domestic industry. "Japan is losing ground (in the global shipbuilding industry)," said a senior official of an industry group. "Now is our last chance."

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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October 24, 2025 06:41 ET (10:41 GMT)

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