With tensions and threats growing in East Asia and elsewhere in the world, Japan is aiming to boost its military spending. That’s set to be a boon for foreign defense contractors, but it’s a different story for domestic firms.
And without a change in acquisition trends, analysts say, the very viability of the domestic defense industry could be called into question.
The severity of the situation was made clear by Naohiko Abe, head of Integrated Defense and Space Systems at Mitsubishi Heavy Industries (MHI), who told the Financial Times in July that a wider shake-up was needed. He said the country’s defense industry was not sustainable if it could only generate razor-thin margins from Defense Ministry contracts.