Japan’s executives look to Asian technology for growth

Japanese business leaders said on Tuesday they were looking to Asia for growth and that they were banking on Japan’s strength in technology to keep an emerging recovery going in the coming year.

“Expanding in Asia is going to drive growth,” Fujio Mitarai, chief executive of Japanese camera and equipment maker Canon Inc. told reporters at an annual New Year’s gathering for business leaders.

In the past businesses in Japan looked mainly to the U.S. to furnish growth. That’s now changing as the prospect of exporting to the world’s largest economy receeds after the financial crisis. Growth is also tepid in Japan and Europe and executives have their eyes on the purchasing power of Asia’s growing middle class.

Prime Minister Yukio Hatoyama said Japan can’t rely on the old-style growth policies and must create new businesses, such as health services and medicine.

“Japan can lead the world by focusing on technology and science,” he said.

Many companies are rapidly shaping their strategies to entice consumers into emerging markets, through price reductions and new product development.

Japan’s exports to Asia totaled 2.7 trillion yen ($29 billion) in November — more than the 1.544 trillion yen to North America and Western Europe combined, according to the finance ministry.

On Tuesday, Toyota Motor Corp. and Honda Motor Co. showed concept models for a small vehicle for the Indian market.

Toyota, the world’s top automaker, said the vehicle will be produced starting late 2010. Honda, Japan’s No. 2 automaker, said its offering will go on sale in 2011, and also be available in Thailand. Such offerings are expected to be under 1 million yen ($11,000), cheaper than models sold in Japan, the U.S. and Europe.

Business executives remained cautiously optimistic for a recovery led by Asian growth. They also boasted Japan’s technological prowess holds the key for success.

“There are so many strengths we can offer the world, especially in ecological technology. We need to get serious about pitching these strengths,” said Nissan Motor Co. Chief Operating Officer Toshiyuki Shiga, pointing to electric and hybrid vehicles not only from Nissan but also from its Japanese rivals.

The Chinese market alone could make up as much as 40 percent of the profit that Honda rakes in for the fiscal year through March 2010, according to major business daily The Nikkei.

Masayasu Toyohara, the executive overseeing consumer electronics at Toshiba Corp., said the company was busy hiring engineers in China to develop washing machines and refrigerators that appeal to Chinese consumers.

Toshiba now controls only 1 percent of China’s home appliance market but hopes to boost that to about 5 percent in three or four years.

Pharmaceutical companies are also counting on China.

“Growth in China is absolutely certain,” said Toichi Takenaka, who heads a federation of Japanese drug makers. “Growth in the pharmaceutical industry always parallels rise in people’s income.”

Associated Press