The Japanese government has pledged to invest substantial funds over the coming years, focusing on eco-friendly vessels and advanced technologies to consolidate its “leading” position in the global shipbuilding industry.
The Shipbuilders’ Association of Japan (SAJ), representing 17 major shipbuilding groups, plans to invest approximately $2.3 billion in the domestic shipbuilding industry. The initiative also seeks funding support from the public sector, aiming to achieve an investment scale of $6.5 billion by 2035.
According to Greek ship brokerage firm Intermodal, these plans aim to modernize Japanese shipyards, including replacing outdated equipment, installing large cranes, and adopting advanced automation and digital technologies.
Additionally, the Japanese government has signed a Memorandum of Understanding (MoU) with the United States to expand cooperation. At the same time, the United States is also seeking similar cooperation with South Korea.
These investments are centered on technological innovation. Nikos Tagoulis, a senior analyst at Intermodal, points out: “The Japanese shipbuilding industry is advancing the development of zero-emission vessels, autonomous vessels, and IoT solutions through collaborations with R&D centers, universities, and think tanks. By 2040, Japan aims to become a leader in the construction of autonomous and zero-emission vessels and strive to achieve self-sufficiency in half of its domestic fleet.”
Nikos added, “Japan is no longer solely pursuing production scale, but is focusing on innovation and value-added shipbuilding solutions to enhance vessel performance and overall quality.” He noted that while Japan’s global shipbuilding market share may remain largely stable, environmental technologies, efficiency-enhancing solutions, and strategic partnerships are expected to boost its profitability and solidify its international standing.
Nikos stated: “Over the past two decades, the global shipbuilding landscape has undergone significant changes, and these efforts are precisely aimed at helping Japan’s shipbuilding industry regain its footing.”
Intermodal data indicates that Japan once held over 35% of new ship orders, but by October 2025, its share had fallen from 26% in 2017 to just over 10%. This stands in stark contrast to the rapid growth of China’s shipbuilding industry during the same period.
Japan’s total ship orders amounted to 737 vessels with a combined deadweight tonnage of 40.7 million tons, primarily comprising bulk carriers, tankers, and container ships. Regarding alternative fuel applications, approximately 10% of the vessels may utilize methanol fuel, about 4% are equipped with liquefied natural gas (LNG) propulsion capabilities, and an additional 32% will be fitted with scrubbers.
In response to market pressures, Japan’s shipbuilding industry is consolidating and restructuring to maintain its competitiveness.
Major mergers and reorganizations in Japan’s shipbuilding industry include: Imabari Shipbuilding, Japan’s largest shipbuilding group, acquiring a stake in Japan Marine United (JMU), Japan’s second-largest shipbuilder; Mitsui E&S gradually reducing its new shipbuilding business, closing its Chiba shipyard and transferring its new shipbuilding business to Tsuneishi Shipbuilding; and Sasebo Heavy Industries exiting the new shipbuilding sector in 2022 and shifting its focus to ship repair and machinery.
However, structural challenges persist. Nikos emphasized that “limited coastal space constrains the expansion of new shipyards, but upgrade investments are expected to enhance the production capacity of existing facilities.”
Furthermore, an aging workforce has prompted the industry to recruit foreign workers. According to Intermodal data, the aging workforce has led to the industry hiring foreign workers, who now comprise approximately 20% of the workforce, compared to almost zero a decade ago. To support the development of skilled talent, the industry has also established specialized training centers.