Patria received a vehicle order that opens the door to Japan’s growing defence market. In addition to top-notch products, the Japanese value excellent service.
Patria Japan Ltd’s office is located next to the busy Tokyo Station in the heart of the country’s capital. The subsidiary is Patria’s bridgehead in a new business country – the company is seeking to establish a permanent foothold in its defence market.
The first milestone in achieving this objective is that Japan Ground Self-Defense Force chose the Patria AMVXP 8x8 as its new armoured wheeled vehicle.
– Our first objective is the successful completion of the AMVXP project. Japan Ground Self-Defense Force primarily procures domestic products, but in the future, we’d like to see more Patria products in their arsenal, says Tomoko Nishigami, Project Engineer at Patria.
The vehicles ordered by Japan will be manufactured under licence by Japan Steel Works, which has long experience in the production of defence equipment. Nishigami is responsible for Patria’s cooperation with the partner.
– Preparations to start up production in Japan are progressing as planned, she says.
The choice of Patria’s vehicle is big news
The Patria AMVXP is replacing the Japan Ground Self-Defense Force’s current Type-96 8x8 personnel carriers. The number of new vehicles will not be made public at this time.
Sales Manager Kazunori Yoneshima is responsible for marketing Patria’s products and services in Japan. He says that this vehicle procurement opens up excellent opportunities for forging long-term partnerships.
– Japan will be increasing its defence budget substantially over the next five years. In addition, the country’s conservative defence market is changing. One good example of this is the selection of a Finnish vehicle instead of a domestic one.
Yoneshima says that in the final stretch of the tender competition, the Patria AMVXP was running against a vehicle made by a well-known domestic manufacturer – the fact that the AMVXP won was big news in the Japanese defence sector. Fulfilling strict criteria and tests tipped the scales in the Finns’ favour.
According to Yoneshima, when it comes to foreign procurements of defence products, Japan has mainly relied on the United States.
– However, the US government and companies have become reluctant to transfer technology to Japan, especially recently. Patria, on the other hand, is prepared to do so, which was a contributing factor to Japan’s choice of new vehicle.
Deep knowledge of business customs is essential
In Japan, Patria is represented by an experienced pair. Before joining Patria, Tomoko Nishigami worked at Japan Steel Works as a field artillery engineer for 13 years.
Kazunori Yoneshima in turn has more than 30 years of experience in the Japanese defence market. He previously worked at a local trading company whose clientele included numerous international defence equipment manufacturers.
– While working at the trading company, I also marketed Patria’s vehicle in Japan. In the promotional phase, I understood that in addition to unique products, Patria has a lot of experience in cooperating with local companies in its business countries, says Yoneshima.
In order to succeed in Japan, a foreign company must have deep knowledge of the local culture and respect for it. According to Yoneshima, overly pushy sales and trying to rush things are common mistakes for western companies in Japan.
– It’s my feeling that Finns differ to their advantage in this respect from the representatives of many other western companies. We respect that here in Japan – when making a deal, we assess not only the product, but also the corporate culture of the manufacturer.
Excellent service is key
Tomoko Nishigami says that the operational performance, intersystem compatibility and cost-effectiveness of defence technology are extremely important to Japanese customers.
– In addition, Japanese customers value excellent service. In this respect, domestic manufacturers generally win out over their foreign competitors. However, the client was impressed by the technical service offered by Patria. I believe that this contributed significantly to their decision to choose our vehicle, says Nishigami.
For instance, Yoneshima says that representatives of Japan Ground Self-Defense Force were positively surprised by Patria’s reaction time to questions during the tender process. Not even the six–seven hour time difference between Japan and Finland hindered the smooth flow of information.
– If the Japanese sent us questions in the evening, we tackled them right away when the working day began in Finland. Then the answers were waiting for them when they woke up to a new working day, says Markus Louhivuori, Global Key Account Director at Patria.
The right products at the right time
In addition to vehicles, Japan is interested in Patria’s underwater systems as well as intelligence and
surveillance systems. Yoneshima says that success in the Japanese defence market for a foreign company hinge on marketing products and services that are a precise fit for local needs. Correct timing is also important.
– Many foreign companies use the success of their technology in other countries as a reference. However, as an island nation, Japan has a very exceptional defence environment, says Yoneshima.
In addition to vehicles, Japan is interested in Patria’s underwater, intelligence, and surveillance systems.
He says that it is also difficult for companies to understand to which parties in the Japanese defence administration one should promote products and services to, and who makes decisions on procurements.
– It isn’t only foreign companies that make this mistake – Japanese companies can also contact the wrong organisation at the wrong time. That’s why it’s so important to establish a local presence and find good Japanese partners, says Yoneshima.
Foreign companies exporting to Japan usually operate through a local chamber of commerce. This was also the approach that Patria selected.
– After establishing ourselves in the country, we now also have direct contact with the defence administration, which facilitates communication, says Louhivuori.
Finland’s good reputation helps Patria
Tomoko Nishigami says that contractual and decisionmaking processes in Japan differ clearly from western business practices. This is especially true of defence procurements.
– The order volumes and times depend on the product, but it’s typical of Japanese agreements that purchases are made in small amounts over a long period of time. It’s important to keep this in mind. For instance, if the Japanese decide to buy 100 vehicles, they might make ten separate agreements for them over ten consecutive years. In other countries, such procurements would most likely be made with one or two agreements.
Tomoko Nishigami and Kazunori Yoneshima say that Finland’s reputation as a technologically advanced country makes it easier for Patria to make headway in Japan. That said, Finland is best-known there for its design products, sauna and Santa Claus.
Finland’s reputation as a technologically advanced country makes it easier for Patria to make headway in Japan.
In addition to Finland’s ranking as the happiest country in the world, Japanese news has also featured items on its position as Russia’s neighbour.
– Being Russia’s neighbour doesn’t sound like a very positive thing at the moment. But it’s a very convincing selling point when it comes to marketing defence equipment in Japan, says Nishigami.
