Japan to double shipyard capacity by 2030. An example for the EU shipbuilding industry

By Marek Grzybowski

Japan plans to increase ship production over the next five years. The government is undertaking the most ambitious program to revitalize the shipbuilding industry. The revitalization plan is based on the creation of a state-owned shipyard and the merger of the two largest private players. Could the Polish government follow Japan’s example and replicate this strategy?

Japan is planning a “Japanization,” and the Polish government is announcing the repolonization of its economy. The recently signed agreements at the Polish Ports 2030 Congress and declarations made at the International Congress in Szczecin give hope that Poland will follow Japan’s lead. Or choose its own course to revitalize the shipbuilding industry.

In Japan, it was Yukito Higaki, president of Imabari Shipbuilding, Japan’s largest shipyard and recently appointed chairman of the Japan Shipbuilding Industry Association (SAJ), who set himself an ambitious goal: to regain at least a 20% share of the global shipbuilding market by 2030. “To become a price leader that has the power to control prices, we must achieve at least a 20% share of the global market by 2030,” Higaki declared.

Japan Shipbuilding Industry Association

Higaki Yukito, president of Imabari Shipbuilding Co. Ltd., was elected chairman of the Japan Shipbuilding Industry Association (SAJ) two weeks ago. Hideaki Saito, former chairman of the Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO), was appointed as the new managing director of the SAJ.

During his inaugural press conference, Higaki stated that the industry will prioritize regaining a 20% share of the global shipbuilding market. He outlined his strategy for developing and producing next-generation vessels, investing in modern production facilities, automation, and robotics. He emphasized greater cooperation between domestic shipyards to increase overall production capacity. He strongly emphasized his determination to “restore the global presence of the Japanese shipbuilding industry.”

Tokyo is focusing on restoring the global competitiveness of the Japanese shipbuilding industry. The production of ships, both simpler and specialized, was clearly dominated by shipbuilding companies from China and South Korea at the beginning of the second decade of the 21st century.

Billions of yen for shipyards
Tokyo intends to regain global market share through a $6.3 billion plan and contracts for the US defense industry. The program was initiated by the ruling Liberal Democratic Party of Japan. One of the leading goals is to build a state-owned shipyard using public funds. This will be a public-private partnership, as the shipyard will operate in cooperation with private businesses.

The shipbuilding development project is emphasized as one of the cornerstones of Japan’s economic security strategy. The decline of the shipbuilding industry, once a leader in technology and production organization, is attributed to the combination of two factors: aging infrastructure and labor shortages.

Source: Japan News

For decades, Japan held a dominant position in shipbuilding, accounting for nearly 50% of global production in the 1990s. However, intense price competition, combined with significant state subsidies and economies of scale enjoyed by Chinese and South Korean shipyards, led to a sharp decline in Japanese shipyards’ share of the global commercial shipbuilding market.

The Japanese government has set an ambitious goal: through subsidies and state-owned shipyard construction, which stimulate innovation and efficiency, Japan should double its shipbuilding capacity by 2030. As a result, Japan’s global share of new orders is expected to increase to 20%. According to the latest data, today it is only 7%, based on the balance of contracts identified in 2025. By comparison, China secured 71% of new shipbuilding orders, while South Korea secured 17%.

The Battle for Global DWT
BRS Shipbrokers has recorded a sharp increase in orders for new ships. In 2024, the recently recorded high contract volumes were again exceeded. Contract volume increased from 128.4 million dwt to 193.1 million dwt in 2024 alone. Container ship orders recorded the largest increase in new orders, reports BRS Shipbrokers in its “Annual Review of Shipping and Shipbuilding Markets for 2025.”

Container ship operators placed the largest number of new orders last year, more than doubling the deadweight capacity of their ships from 20.6 million dwt in 2023 to 49.8 million dwt in 2024. Major contracts focused on placing orders for large ships. Many shipyards have refocused on container ships. A year earlier, they were active in other segments of the maritime transport market due to the decline in container ship orders in 2023.

Source: SEA Europe

Among other segments in which Japan operated, it is worth noting that Asian shipyards maintained their activity in the market for new specialized vessels for the third consecutive year. In 2024, contracts were signed for vessels with a total deadweight tonnage of approximately 20 million tons. This was roughly on par with 2022 and 2023, when orders reached 18.6 million dwt and 15.3 million dwt, respectively. For comparison, the annual average between 2012 and 2021 was 7.5 million dwt, according to BRS Shipbrokers.

There was a significant increase in orders for LNG and LPG vessels. Orders for LNG carriers have increased significantly, from 77 in 2023 to 108 in 2024. Similarly, orders for LPG carriers have increased from 122 in 2023 to 155 in 2024. Meanwhile, the market for car carriers has become saturated. However, contracts are satisfactory. Orders for car carriers have decreased to 59 ships from a record 96 in 2023. However, this is still the fifth highest number of orders in history (after 128 in 2007, 96 in 2023, 83 in 2022, and 74 in 2004). Demand is being generated by Asian carmakers, which are taking an increasing share of the European automotive market. However, this market is clearly being taken over by Chinese companies.

Japan to Invest Billions of Yen in Shipyards
A shipbuilding recovery program has been submitted to Prime Minister Shigeru Ishiba. It emphasizes the crucial role of the shipbuilding industry’s production capacity in national security. The plan is based on Japan’s Economic Security Promotion Act of 2022, which allows for direct government support for industries deemed crucial to national interests. This includes reactivating “dormant” shipbuilding and repair facilities and encouraging public and private investment in next-generation infrastructure.

The industry cannot be modernized and become more competitive without investing in new technologies and human capital. Japan is therefore following the path already adopted by Germany, Norway, Italy, and Turkey many years ago. Tokyo has estimated that the shipbuilding industry needs 1 trillion yen (approximately $6.3 billion). This investment will be in both public and private sectors. However, production capacity is to be built not only to meet the demand of shipowners and the Japanese defense forces.

The program for expanding the Japanese shipbuilding industry takes into account the geopolitical dimension. Observers of the Japanese shipbuilding industry believe that Tokyo intends to strengthen the domestic shipbuilding industry in order to deepen defense-industrial cooperation with the United States. The Japanese government is therefore following the same path as the government of the neighboring Republic of Korea.

The expansion of the shipbuilding industry is also expected to focus on ship repair yards. It is expected that the Japanese shipbuilding industry will expand its offerings to include maintenance, repair, and overhaul (MRO) services for American warships. Contracts with the US Navy are expected to revitalize the Japanese shipbuilding industry and fill docks. Direct competition with South Korea is expected in this area. Until now, fierce competition has only existed in the commercial shipbuilding market.