Japanese firms to gain in Spain from EC entry. Spanish stake, already big, should bolster marketing in the rest of Europe
When Spain finally does join the European Community, watch out for the Japanese. Spain is on its way to becoming a launching pad for many of the Japanese videos, cars, and appliances that are pouring into the European market. Investment trends tell the tale. At present, Japanese capital in Spain runs at more than $200 million, its highest individual investment of the $599 million total for Western Europe.
The number of jobs created by Japanese companies in Spain is also at the top of the list, and Spain comes in right behind West Germany for the most number of Japanese companies based in the country.
What is more, over the past year Japanese investment in Spain has accelerated. Sony will be setting up Spain's first production of videocassette recorders. Sanyo, through an affiliate, is to follow. Fujitsu, Japan's leading computer company, just signed a deal to produce, through the Spanish company Secoinsa, its whole range of computers, thereby setting up in Spain a base for its European production.
Yet another prospect will be more joint ventures for export to third countries, such as the Japanese-Spanish liquefied gas plant set up in Algeria.
The trend underlines the change in Japan's tactics. Europe's high barriers have increasingly led the Japanese to penetrate markets through industrial collaboration with foreign countries, not only to sell in those markets but to gain access to others. Contributing to depressed but potentially profitable zones is also part of Japan's business philosophy.
At this point in Spain's industrial development, the reforms undertaken to build up a more competitive industry, along with cheap yet skilled labor, have made Spain an ideal place for setting up companies.
``Moreover,'' says Sumio Edamura, Japan's ambassador to Spain, ``with Spain's entry to the Common Market, investments will have more possibilities, though adjustments will have to be made.''
Motor Iberica SA, the first Japanese-controlled company in Europe, is beginning to export Nissan Patrol cars to France and Italy.
Nissan took over a former Ford plant based in Barcelona that was losing money; the plant is now starting to make a profit.
``We don't expect to recoup on investments immediately,'' says Shizuka Kaneko, the company's Japanese vice-president. ``We plan in the medium and long term, and we view Spain's entry to the EC as a promising factor.''
Countries like France, which has long tried to promote European technology and has battled against Japanese cars and videos, are not too happy about such developments. The French were already upset about the British producing Toyotas under license.
``Spain, a Trojan horse? No, no,'' Mr. Kaneko says with a chuckle. ``This is a Spanish product; the motor is completely different. It is 80 percent a national product. With French Michelin tires. It's an international exchange.'' Still, the company is 85 percent Japanese controlled, and the cars will go out bearing the Nissan Patrol nameplate.
Japanese methods have been applied on assembly lines at Motor Iberica, with workers responsible for quality at each stage.
``Quality is the same or even superior to Japan,'' Kaneko says. ``In principle, I feel satisfied.'' But much like the ``can-do-better'' comment of a schoolmaster about a promising pupil, he adds: ``There's room for improved productivity and efficiency.''