More Japanese companies are moving their production facilities from China to Japan, fearing further disruptions from the novel coronavirus pandemic as well as the increasing friction between Washington and Beijing.

Manufacturers of products ranging from appliances and semiconductors to cosmetics and clothing are rethinking their business strategy of focusing production in low-cost areas.

The extended lockdown of Shanghai after COVID-19 cases surged in the city as well as the chronic semiconductor shortage made it difficult for Panasonic Holdings Corp. to provide an adequate supply of home appliances to the Japanese market.

That led the company’s operating profit for the April-June quarter to contract by about 20 billion yen ($146 million).

Panasonic Corp., which handles appliance production for the group, has begun moving its China-concentrated factories to Japan and other parts of Asia.

“We must have a flexible transfer of manufacturing, so we will think about Japan and Vietnam as well,” Michikazu Matsushita, Panasonic president, said.

Panasonic’s production of vacuum cleaners will be moved to a plant in Shiga Prefecture, and production of washing machines will also be strengthened domestically.

Mazda Motor Corp. saw its second-quarter vehicle sales plunge by 34 percent year on year because of the Shanghai lockdown and semiconductor shortage.

The company plans to increase production in Japan of autoparts to stabilize domestic auto manufacturing.

“We will move away from a dependence for parts production on regions where costs are low,” Masahiro Moro, a senior managing executive director, said.

Mazda is asking about 200 companies that supply it with parts made mainly in China to increase their domestic inventory. The automaker will pay for the additional storage costs.

Kioxia Holdings Corp. will spend an estimated 1 trillion yen to construct a new production facility for semiconductors in Kitakami, Iwate Prefecture.

The government announced in June that it would provide up to 476 billion yen in subsidies for the construction of a plant in Kumamoto Prefecture planned by Taiwan Semiconductor Manufacturing Co., Sony Group Corp. and major autoparts manufacturer Denso Corp.

The weaker yen is also pushing companies to move production back to Japan.

Cosmetics giant Shiseido Co. will double the number of its domestic plants to six over three years, meaning that almost all of its skin care products will eventually be produced in Japan.

“In terms of economic rationality, there were instances when it was better to manufacture abroad, but the high quality of our products is extremely important,” Masahiko Uotani, the company president and CEO, said. “That gave us greater confidence to have more domestic production sites.”

Major apparel manufacturer World Co. will move production of expensive brand items to domestic plants.

One company official said, “The era of moving production overseas simply because it is cheaper has ended.”

Domestic production shortens the delivery periods of products and allows for greater management of production volume and product quality, the official said.

JVC Kenwood Corp., a manufacturer of car navigation systems and audio equipment, began moving production of car navigation systems for the domestic market from Indonesia to Nagano Prefecture in January.

With about 90 percent of its products manufactured abroad, the weaker yen was hurting the company’s profits.

Ken Hasegawa of Mitsubishi UFJ Research and Consulting said the novel coronavirus pandemic, the U.S.-China confrontation and the Russian invasion of Ukraine have underlined the risks associated with concentrating production in a single area.

Tokyo Shoko Research, a private credit research firm, conducted a study in August of companies that experienced delays in receiving raw materials and parts due to the COVID-19 pandemic.

The 4,352 companies that said they had such a problem were asked how they dealt with it. Only 135 companies, or 3.1 percent of the total, said “moving production back to Japan.”

That was far smaller than the 2,032, or 46.6 percent, that said “dispersing the number of suppliers.”

Hasegawa said a huge increase in companies moving production back to Japan was unlikely because that would require additional plant investment and personnel.

“But with the expected intensified confrontation between the United States and China creating the risk of delays in production and trade, managers will face difficult decisions in the future,” he said.

(This article was written by Fumiko Kuribayashi, Junichi Kamiyama, Tomonori Washida, Kanako Tanaka, Shimpei Doi and Naoyuki Fukuda.)