Why car factories may fail in the drone age Japan defence giant explains

Japan’s largest defence contractor has warned that converting struggling car factories into military drone production sites would be ineffective and risk wasting public funds, even as the country accelerates investment in unmanned systems.

Japan’s defence ministry has sharply increased its procurement budget for drones to ¥277 billion ($1.7 billion) this financial year, triggering intense competition among foreign manufacturers and domestic start-ups seeking to enter the market.

Eisaku Ito, chief executive of Mitsubishi Heavy Industries (MHI), said the company intends to play a central role in Japan’s drone expansion but rejected proposals to repurpose idle automotive plants. He argued that the manufacturing models are fundamentally incompatible.

“Products in this field change their specifications constantly depending on the situation,” Ito said. “Automobile factories, by contrast, are designed to manufacture tens of thousands or millions of the same units.”

He warned that applying mass-production systems to drone manufacturing could result in large volumes of outdated or unusable equipment. “It would be a terrible idea… an enormous waste of taxpayers’ money,” he said.

The debate comes as several European carmakers move in the opposite direction, adapting underutilized facilities for defence production. Renault has partnered with French groups Turgis Gaillard and Thales to produce drones, while Volkswagen and Mercedes-Benz are exploring similar collaborations.

Japan’s push is partly shaped by lessons from Ukraine, where relatively low-cost drones have proven effective against Russian forces. Tokyo aims to deploy unmanned systems at scale to strengthen its دفاع posture, particularly under its “Shield” coastal defence program designed to protect southwestern islands near Taiwan.

Ito said MHI is well-positioned to lead this effort due to its expertise in producing low-volume, highly customized systems. He also noted that Japan’s defence ministry is likely to prioritize domestically developed drones in certain areas due to data security concerns, giving MHI a strategic advantage.

The company has already demonstrated rapid development capabilities, recently producing a prototype interceptor drone within three months designed to neutralize enemy unmanned aerial vehicles. The project drew on MHI’s experience across multiple sectors, including satellites, command systems and naval technologies.

MHI is benefiting from a broader surge in defence and energy demand. Its shares have risen by 50% since Ito took over 15 months ago, and the company is working through an order backlog expected to exceed ¥15 trillion ($93 billion). Expansion plans include increasing production capacity, particularly in gas turbines.

Ito also expressed confidence that demand for gas turbines would remain strong even if investment in AI-driven data centres slows, citing the need to replace aging infrastructure, shift from coal to gas, and support renewable energy systems.

By Tamilla Hasanova