Texas Researcher Sees Onslaught : Manufactured Housing From Japan May Hit U.S.

The signals are becoming louder that Japan is about to make an onslaught into another major U.S. market--the housing industry. What surprises a researcher is that these signals are being ignored.

Charles Graham, professor of architecture and environmental design at Texas A&M; University in College Station, Tex., says that manufactured Japanese housing is far superior, both in quality and technology, to its U.S. counterpart and that it conceivably could be marketed in this country within the next two to three years.

Graham said Swedish and Danish housing manufacturers also are eyeing the colossal but sluggish U.S. housing industry. He said superior functional features, state-of-the-art technology and aggressive marketing are the weapons that foreign competitors will use to penetrate the U.S. market.

Question of When

“The question no longer is if, but when the Japanese and the Swedes and the Danes will come. Since my research a few months ago, I have got three calls from U.S. manufacturers. Their silence is killing me.

“What I want to emphasize is that some U.S. developers already are in touch with Japanese companies for joint-venture possibilities. I’m currently consulting with some of those companies. Within the year or so you are going to see an announcement of such a joint-venture agreement.”

He said Japanese industry representatives are scouting the United States for factory sites and financing and already have approached a Dallas bank for financing.

“None of these has been publicized. The Japanese entry would mean a major upheaval and shakeout in the industry here. Like the steel sector, the U.S. housing sector may find itself struggling for survival.”

He said that despite the recent slump in the manufactured housing industry, the U.S. home market still is lucrative. The current demand for homes is about 2 million units per year, while the supply is only in the neighborhood of 1.7 million units.

“So we have a pent-up demand that will attract the foreign manufacturers,” Graham said.

He said one-third of all houses built in the United States are wholly or partially produced in a factory.

Using computerized designs and robotics assembly, the Japanese manufacturers are now offering better quality and greater variety in such homes, Graham said. He attributed Japanese success in part to active government support for the industry, but he also said the Japanese are eight to 10 years ahead of Americans in housing technology and marketing.

Offering Better Quality

“The Japanese,” he said, “are using highly automated assembly processes, and they have already developed several ways of building a home. Their home incorporates many of the latest developments in the kitchen, bathroom, energy efficiency and the most economical use of space. Their appliances are so much more advanced and expressive. Their kitchens have revolutionized the art of cooking. Their bathrooms pay close attention to personal hygiene and provide accommodation for lounging and comfort. Their homes are cheaper and far more durable than similar U.S. homes.”

Graham said Japanese housing factories are giants compared to U.S. factories. America’s largest producers build about 15,000 units per year. He said there are several Japanese firms each averaging more than 30,000 units a year.

Graham said the typical U.S. factory offers only 15 to 20 house plans. A typical Japanese plant can offer up to 2,000 options.

He said he also has found that U.S. companies seldom conduct quality consumer research, an art the Japanese seem to have mastered.