A new survey reveals that the majority of Japanese manufacturers operating in Southeast Asia and India are facing severe supply chain disruptions. The survey, conducted by Japanese news agency NNA and released on April 3, polled 347 manufacturers. It found that 65 percent of these companies are experiencing significant difficulties with procurement and logistics.
The problem is widespread across the region. The Philippines reported the highest rate of disruption, with 95.8 percent of Japanese manufacturers struggling.
Indonesia followed at 87.9 percent, and Malaysia at 87.0 percent. Even Thailand, where many firms have worked to source parts locally, saw 74.5 percent of companies facing challenges. The high local procurement rate in Thailand was meant to serve as a buffer, but it proved insufficient.
China has emerged as a critical choke point. The survey identified roughly 140 Japanese manufacturers in India and Southeast Asia that have been directly affected by disruptions in sourcing from China.
When the coronavirus shut down Chinese factories, the ripple effects impacted assembly lines across the region. More than 80 percent of all companies reporting problems specifically cited trouble with sourcing parts and materials. This indicates that the core issue is not labor shortages or consumer demand, but the fundamental challenge of moving components from one location to another.
Takashi Sugimoto, an economist at the Japan Center for Economic Research, stated that the pandemic has exposed the vulnerabilities of global supply chains. He noted that Japanese manufacturers are among the hardest hit.
Japanese firms have long been the backbone of industrial production in the region, operating automotive plants in Thailand and electronics factories in Malaysia. When they cannot get parts, production slows, which in turn reduces export revenues and puts pressure on local economies. The stakes are concrete. A factory that cannot source a $2 sensor cannot ship a $20,000 car.
A supply chain that breaks in one country affects all of them. The NNA survey makes clear that no amount of local procurement has fully insulated these companies.
The pandemic did not just disrupt trade routes; it revealed how dependent even the most localized operations remain on cross-border flows of components. Kenji Kawase, chairman of the Japan Chamber of Commerce and Industry, has been monitoring the situation. The survey data supports what many in the business community have been saying for weeks: the virus has hit the arteries of manufacturing, not just the margins.
For the countries hosting these factories, the implications are serious. Japanese manufacturers are major employers and major taxpayers.
If the disruptions persist, companies may be forced to reconsider their supply chain strategies. Some may accelerate moves to shift production out of China, while others may try to deepen local sourcing. However, these are long-term fixes.
The immediate problem is that parts are not arriving, and no one knows when they will. The survey paints a picture of an industrial base under a kind of pressure it has not faced before.
The numbers are raw, and the situation is ongoing. The question hanging over every factory floor is how long they can hold out.
