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Japan pays a premium for locally built F-35s

14 March 2018
Japan has confirmed that local production of the Lockheed Martin F-35 Lightning II Joint Strike Fighter adds USD33 million to each aircraft. Source: Lockheed Martin/Thinh D. Nguyen

Key Points

  • F-35s assembled in Japan cost about USD33 million more than imported types
  • Japan could look to improve costs efficiencies through expanded local involvement

The cost of locally building Lockheed Martin F-35 Lightning II fighter aircraft for the Japan Air Self-Defense Force (JASDF) is about USD33 million more than importing the same aircraft from the United States, Jane’s has learnt.

The price difference is due to factors including the foreign exchange rate and the smaller scale of Japanese production runs. Japan’s Mitsubishi Heavy Industries (MHI) operates a final assembly and check out (FACO) facility in Nagoya from where it started working on F-35s in 2015.

The JASDF has ordered 42 F-35As, with the initial four aircraft to be imported from the United States – the first of which was handed over to the force in late 2016. The remaining 38 F-35As are to be assembled and delivered from the FACO facility. The first of these aircraft was rolled out in June 2017.

Confirming the price difference to Jane’s , a spokesperson from the Japanese Ministry of Defence’s (MoD’s) Acquisition, Technology & Logistics Agency (ATLA) said the unit price of the F-35s “depends greatly on the foreign exchange rate of each fiscal year [and] the difference in procurement methods between importing completed F-35s from the US and assembling F-35s in the Japanese FACO facility”.

The spokesperson explained that in fiscal year 2012 when Japan first ordered the F-35 through the import of completed aircraft the exchange rate was JPY81 per USD1, and that this resulted in the unit cost of imported F-35s reaching JPY9.6 billion (or USD90.1 million at constant 2018).

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