For six decades, Nissan Motor’s Oppama plant south of Tokyo has been a symbol of Japan’s industrial strength. Since opening in 1961, the factory has produced roughly 18 million vehicles, including the Nissan Leaf, one of the world’s first mass-market electric cars.
Now, as Nissan prepares to close the plant in 2028, its next chapter could have little to do with automobiles.
U.S. defence technology company Anduril Industries is in talks to acquire the facility and potentially convert it into a manufacturing site for military drones, according to people familiar with the discussions. Reuters reported in June that no final decision had been made, but the talks could turn one of Japan’s iconic postwar automobile factories into a defence production hub.
The location makes the possibility particularly significant. Oppama is near Yokosuka, home to a major Japanese naval facility and a key U.S. Navy presence in Japan.
The proposed transformation is therefore more than an industrial real-estate transaction. It illustrates a question increasingly confronting military planners across Asia: how quickly can civilian industrial capacity be converted, expanded and sustained for war?
For decades, military strength has largely been measured by inventories — how many fighter jets, warships, tanks, missiles and submarines a country possesses. But modern warfare, particularly the experience of Ukraine, has exposed another dimension of military power.
A military may enter a conflict with sophisticated weapons. The more difficult question is whether it can continue producing, repairing, replacing and upgrading those weapons once the fighting begins.
That capacity can be described as regenerative capacity.
Stockpiles determine how a war begins. Regenerative capacity increasingly determines how long a country can continue fighting.
The financial resources flowing into Asian defence are enormous.
According to the Stockholm International Peace Research Institute, military expenditure in Asia and Oceania reached $681 billion in 2025, an increase of 8.1 per cent from the previous year. SIPRI said it was the largest year-on-year increase in regional military spending since 2009.
Japan increased military expenditure by 9.7 per cent to $62.2 billion, while India raised spending by 8.9 per cent to $92.1 billion. China, meanwhile, increased military expenditure by an estimated 7.4 per cent to $336 billion.
The figures reflect an increasingly unsettled strategic environment.
China is expanding its military capabilities. Japan is strengthening its long-range strike, intelligence, surveillance and reconnaissance capabilities. India is seeking greater strategic autonomy while modernising a huge and diverse military. South Korea, Australia, Taiwan and other regional powers are also increasing their capabilities.
But higher budgets do not automatically create the industrial capacity required for a prolonged conflict.
A country can spend billions of dollars buying aircraft and missiles while remaining vulnerable if it cannot replace them at an adequate rate.
This is where the industrial base becomes part of the military system.
A drone destroyed in combat requires another drone. A missile fired at an enemy target has to be replaced. A damaged aircraft requires spare parts, maintenance crews and possibly a new engine. A ship hit by a missile may need months of repairs. A communications network disrupted by electronic warfare requires replacement equipment and alternative systems.
Every one of these requirements leads back to factories, suppliers, machine tools, electronics companies, software developers, repair depots and skilled workers.
The industrial system behind the weapon therefore becomes almost as important as the weapon itself.
The war in Ukraine has provided the clearest demonstration of this problem.
Both sides have consumed enormous quantities of artillery ammunition, missiles, drones and other equipment. At the same time, they have rapidly modified existing systems in response to battlefield developments.
Commercial technology has been incorporated into military systems. Small civilian drones have been adapted for reconnaissance and attack. Electronic warfare has become a constant contest. Software and communications systems are repeatedly modified.
The result is a battlefield in which technological advantage can be temporary.
A drone that provides an advantage today can become vulnerable within weeks after an opponent develops a countermeasure. A communications system can be disrupted. A particular ammunition type can become scarce. A new electronic-warfare technique can force rapid redesign.
That creates an industrial race alongside the battlefield race.
The side capable of adapting production quickly can restore lost capacity and introduce improved systems before its opponent does.
This is fundamentally different from the Cold War-era model of defence production, in which governments often planned large weapons programmes years or decades in advance.
The emerging model is closer to continuous industrial adaptation.
That creates a difficult problem for defence ministries.
Military procurement systems are generally designed to purchase defined quantities of equipment under multiyear contracts. Governments can justify buying 100 fighter aircraft, 10 frigates or thousands of missiles.
It is much harder to justify paying for a factory that may remain underused for years.
It is harder still to maintain skilled workers, specialised machinery, spare-parts inventories and suppliers that may be required only during a major crisis.
Yet those apparently inefficient investments could become decisive during a war.
Japan is particularly interesting because it possesses many of the ingredients required for advanced defence manufacturing.
The country has world-class automotive manufacturing, precision engineering, robotics, electronics, materials science and industrial automation.
But much of this capacity has historically been directed toward commercial production.
Japan’s defence industry is relatively small compared with its broader industrial economy, and defence equipment has often represented a limited part of the business portfolios of large conglomerates.
At the same time, Japan has become increasingly dependent on imported major weapons.
SIPRI estimates that Japan’s imports of major arms increased by 76 per cent between 2016–20 and 2021–25, making it the sixth-largest arms recipient globally during the latter period. The United States accounted for 95 per cent of Japan’s major arms imports.
The shift reflects Japan’s rapid military modernisation and growing concerns about China and North Korea.
But buying advanced foreign systems creates another question: how much of the supporting industrial ecosystem exists domestically?
The possible conversion of Oppama offers one potential answer.
A former automobile factory already possesses many characteristics attractive to a defence manufacturer: large production areas, industrial machinery, logistics infrastructure and a workforce accustomed to quality control and complex manufacturing processes.
The question is whether those capabilities can be transferred to drones and other defence products.
Building a military drone is not identical to building a car. Certification requirements, secure communications, sensors, propulsion systems, software and military supply chains introduce different challenges.
But the underlying manufacturing disciplines — precision assembly, quality assurance, automated production, supply-chain management and rapid throughput — can be transferable.
That makes Oppama potentially valuable not because it is a car plant, but because it is an industrial system.
Anduril would nevertheless face a fundamental commercial question.
Who pays for the capacity?
A defence factory cannot necessarily operate like an automobile plant, where thousands of vehicles are produced continuously for a consumer market. Military demand can be irregular, while governments may require the ability to surge production during a crisis.
Maintaining that surge capability costs money.
Japan therefore has to decide whether defence resilience is worth paying for even when there is no immediate war.
China presents almost the opposite industrial model.
Its advantage is not a shortage of factories. It is the scale and depth of its manufacturing ecosystem.
Chinese civilian drone production expanded dramatically in 2025. Official Chinese data showed output of civilian drones increased by 37.3 per cent from the previous year.
That growth sits on top of a huge commercial ecosystem involving drone manufacturers, electronics producers, batteries, motors, sensors, software companies and component suppliers.
The commercial drone market has also created intense competition.
Companies are forced to reduce costs, improve performance and introduce new products rapidly. Product cycles can be measured in months rather than years.
That environment is potentially valuable in wartime.
A military that loses large numbers of inexpensive drones may need thousands more rather than a handful of exquisite replacements. A manufacturing ecosystem capable of producing cheap systems at scale can therefore provide a significant advantage.
China’s arms-import figures demonstrate how dramatically its domestic production has changed its military-industrial position.
SIPRI says Chinese arms imports fell by 72 per cent between 2016–20 and 2021–25, pushing China out of the world’s top 10 arms recipients for the first time since the early 1990s. SIPRI attributed this largely to the expansion of domestic production.
But industrial capacity alone does not prove wartime effectiveness.
China has not fought a major conventional war involving its modern joint-force architecture in decades. Outside observers therefore cannot know with certainty how its enormous manufacturing system would perform under sustained combat conditions.
The unanswered questions go beyond production.
Could factories maintain output while facing cyberattacks? Could logistics networks continue operating under disruption? Could communications survive sophisticated electronic warfare? Could military units absorb replacement equipment quickly enough? Could software, sensors and command networks be upgraded at the same pace as hardware?
Industrial output is an important component of military power, but it is not synonymous with combat effectiveness.
India offers a third model.
It remains one of the world’s largest military powers and the second-largest importer of major arms, but it has been attempting to reduce dependence on foreign suppliers.
SIPRI data show that Russia accounted for 40 per cent of India’s arms imports in 2021–25, down from 51 per cent in 2016–20 and 70 per cent in 2011–15. India has increasingly turned toward Western suppliers while expanding domestic production.
This diversification gives India greater strategic flexibility.
But it also creates an engineering and integration challenge.
A military operating aircraft from France, missiles from Russia, sensors from Israel and communications systems from several domestic and foreign suppliers must make those systems work together.
That is not simply a procurement problem.
It is a systems-engineering problem.
The May 2025 India-Pakistan conflict illustrated the importance of this broader architecture.
India’s Chief of Defence Staff General Anil Chauhan subsequently acknowledged that Indian fighter aircraft had been lost during the fighting, although the two sides sharply disputed the number and circumstances. Independent reporting and visual evidence indicated that at least one Indian Rafale had been lost, while Pakistan claimed a larger number of Indian aircraft.
A French intelligence official was also reported by CNN as saying that one Indian Rafale had been shot down, while later claims about the number of Rafale losses remained contested.
The wider lesson is more important than the disputed aircraft count.
Modern air combat is not simply a contest between individual fighter jets.
It is a contest between networks.
Aircraft must receive information from airborne surveillance platforms, ground radars and command centres. Targeting data must be transmitted securely. Pilots must understand what other units are seeing. Electronic warfare systems must operate alongside weapons and sensors.
A technologically advanced aircraft that cannot effectively participate in the wider combat network can become an isolated platform.
The same principle applies to drones, missiles, ships and ground forces.
India’s defence-industrial challenge therefore extends beyond building more weapons.
It must build an architecture capable of integrating them.
That includes secure data links, command-and-control systems, electronic warfare, artificial intelligence, satellite communications, sensors and software.
These capabilities are less visible than fighter aircraft or missile launchers.
They are also difficult to measure.
A military parade can display aircraft. A defence ministry can publish procurement figures. A ship can be photographed in a harbour.
But nobody can easily photograph the resilience of a software architecture or calculate from an inventory list how quickly a damaged radar network can be restored.
This is why conventional measures of military strength can be misleading.
Two countries may possess similar numbers of aircraft and missiles but have dramatically different capacities to sustain combat operations.
One may have a deep domestic supply chain and thousands of suppliers. Another may depend on a small number of foreign contractors.
One may be able to convert civilian factories rapidly. Another may have no mechanism for doing so.
One may maintain large stocks of spare components. Another may discover after the first weeks of a conflict that critical parts have long delivery times.
The implication is that defence budgets may increasingly need to be viewed as industrial-policy instruments.
Governments will have to decide not only what weapons to buy, but what production capacity they want to preserve.
That could mean subsidising idle or low-volume production lines.
It could mean maintaining strategic inventories of electronic components, engines, batteries, semiconductors and other critical materials.
It could mean creating agreements that allow commercial factories to switch to military production during emergencies.
It could mean training workers in skills that can move between civilian and military manufacturing.
And it could mean designing military equipment from the beginning with manufacturing resilience in mind.
A weapon that requires a specialised component produced by a single supplier thousands of kilometres away may be highly capable but strategically fragile.
A slightly less sophisticated weapon that can be produced domestically by multiple suppliers may have greater wartime value.
That is a difficult trade-off for modern militaries accustomed to pursuing technological superiority.
The transformation is particularly important for drones.
Unlike fighter aircraft or submarines, many drones can be relatively inexpensive and rapidly replaced.
That makes them ideal candidates for mass production.
It also means that a military’s drone fleet may need to be treated less like a conventional weapons inventory and more like ammunition.
A destroyed drone is not necessarily a strategic disaster if another can be produced quickly.
But if production cannot keep up with battlefield consumption, even a technologically advanced drone force can become exhausted.
The same logic increasingly applies to missiles, electronic-warfare systems, communications equipment and some classes of autonomous weapons.
The defence industry of the future may therefore look less like a handful of giant aerospace manufacturers and more like a distributed industrial network.
Large prime contractors will remain important for fighter aircraft, ships and strategic weapons.
But thousands of smaller companies may become equally important for sensors, processors, batteries, motors, software, communications equipment and replacement components.
This is where Asia’s industrial geography becomes strategically significant.
Japan possesses advanced manufacturing and precision engineering.
China possesses enormous production scale and supply-chain depth.
India possesses a huge industrial and technological base but faces complex integration and localisation challenges.
None of these advantages automatically translates into sustained combat power.
The most important question is not which country has the largest defence budget.
It is which country can turn money into sustained military output when the normal assumptions of peacetime disappear.
That means answering questions that are rarely visible in annual defence reports.
How many drones can be produced each month?
How quickly can output be doubled?
How long can factories operate without imported components?
How rapidly can damaged aircraft return to service?
How many spare engines and critical components are available?
How quickly can a new software configuration be distributed across thousands of systems?
How many civilian factories can be converted to military production?
And perhaps most importantly: who has already practised doing it?
These questions are difficult because there is little reliable public data comparing the regenerative capacity of Asian militaries.
It would therefore be premature to rank China, Japan and India according to their ability to replace wartime losses.
What can be identified, however, are different industrial strengths and vulnerabilities.
China has enormous manufacturing scale and a mature civilian drone ecosystem, but the wartime performance of that system remains untested.
Japan has sophisticated industrial capabilities and a highly skilled workforce, but its defence sector has historically operated on a smaller scale and relies heavily on imported major weapons.
India is reducing dependence on traditional suppliers and building a more diversified defence industry, but must integrate a complicated mixture of foreign and domestic systems.
These are not simple strengths and weaknesses.
They are different industrial problems.
That is why the fate of the Nissan Oppama plant matters beyond Japan.
The factory may eventually build drones for Anduril.
It may not.
The negotiations could fail. Nissan could select another buyer. Anduril could pursue a different production strategy.
But the underlying question will remain.
Can a country preserve industrial capacity that is economically unnecessary during peacetime but potentially indispensable during war?
For Japan, the answer could determine whether its rapidly increasing defence budget produces not just more weapons, but a more resilient defence ecosystem.
For other Asian countries, Oppama offers an equally important lesson.
The factories that matter in the next conflict may not look like traditional weapons factories.
They may be automobile plants, electronics facilities, robotics companies, semiconductor manufacturers or commercial drone workshops.
Their strategic value may remain invisible until the first major crisis.
By then, however, it may be too late to build them.
Asia is already spending more on defence. SIPRI’s figures show the scale of that transformation: $681 billion in regional military expenditure in 2025, the strongest annual growth in spending in more than a decade.
The next phase of the competition will be about what that money buys.
More fighter jets and warships will certainly matter.
So will missiles, submarines and satellites.
But the defining advantage in a prolonged conflict may be less visible: the ability to replace what has been destroyed, repair what has been damaged, upgrade what has become obsolete and keep communications operating after an opponent attacks the network.
That is regenerative capacity.
It turns defence policy into a question of capital allocation and industrial organisation.
And it changes the meaning of military readiness.
A country is not fully prepared simply because weapons are sitting in hangars, ports and depots.
It is prepared when the industrial system behind those weapons can continue producing them after the first ones are gone.
Oppama may never become a drone factory.
But the question raised by its possible transformation is unlikely to disappear.
After decades of measuring military strength by what governments possess, Asia may increasingly have to measure it by what its factories can replace.
In the next regional crisis, quantity will still matter.
But the decisive quantity may not be the number of drones, missiles or aircraft sitting on the ground when the fighting begins.
It may be the number that can be produced, repaired and delivered after the fighting has already started.
