TOKYO -- While many Japanese companies continue to find an overseas route to cheap manufacturing, Canon is actively bringing production back to Japan.

The optical and office equipment maker intends to make 50% of its products in its home country by 2015. Management has set this goal because it sees the yen remaining weak for some time. And because of robots, which once paid for work for free.

"Our overseas production ratio is too high," Chairman and CEO Fujio Mitarai told 1,500 top Canon executives at the beginning of the month. "And we must bring back more production to Japan."

Canon's domestic production ratio is 42%. Though the figure plunged after the 2008 start of the global financial crisis, which coincided with the yen going on a bull run, it has never been below 40%. Japanese rivals Nikon and Ricoh, meanwhile, have cut their Japan production ratios to 10-30%.

Canon is bucking the trend by relying more on automation. The aim is to keep human involvement to a minimum and thereby reduce labor costs.

The road to low-wage countries can be a long one. When poorly paid workers in one country start demanding fairer remuneration, companies have to move on to another country if they want to continue saving costs by paying peanuts. Then again and again.

Canon has concluded that this constant building of new factories in the low-cost country du jour does not add as much value as it seemed it would when first starting down this road. So it has opted for full automation, which it says offers lower overall costs and more flexibility in responding to foreign-exchange fluctuations.

Many parts of Canon's production process are already fully automated. Machines now produce sponge parts for printer toner cartridges that used to be handled by humans due to the intricate work involved. The latest robots can now do the job.

And since last year, robots have been helping to make Canon's camera lenses. Before the switch, Canon used the conventional cell production style, which assigns one worker to multiple tasks. The new system is a man-machine cell production system. Canon expects it to lead to fully automated digital camera production.

Canon says it is allocating some displaced workers to assembling high-end products, sourcing parts and components, and to managing all those robots.

Spend it to make it

Canon allocated an average of 9% of sales to capital spending over the past 10 years. That is twice as high as Nikon and Ricoh. Canon invests more than 30% of sales on tangible fixed assets, such as machines, surpassing Nikon and Ricoh by a factor of 2. In the manufacturing sector, it is equipped with cutting-edge machinery on a par with Toyota Motor.

Plenty of capital spending has long helped Canon maintain a gross profit margin of nearly 50%. Even in the wake of the 2008 global financial crisis, Canon was able to secure an operating profit due largely to this ultrahigh margin.

Because of Japan's solid infrastructure and its easy access to high-level research, manufacturers benefit from having production in Japan -- but only if labor costs are not factored in. One other Japan perk: Labeling something as "made in Japan" allows a company to charge more for it.

Yet Canon's business model can only produce results when its products sell well. Sales, however, are shrinking. Annual sales per worker in 2012 came in at about 18 million yen ($172,000), half what they were six years earlier.

The growing popularity of smartphones has dampened Canon's digital camera business. Intense competition in the office equipment market has cast a pall over its business prospects. It finds itself in a funk that it has never known during the past 30 years.

Mitarai says his company will increase sales in new sectors, such as medical equipment, to 200 billion yen by 2016. But that will not be enough to make up for overall sales declines.

The global financial crisis prompted some manufacturers to return production to their industrialized home countries. In the U.S., the weakening dollar, a new method of tapping gas reserves and the availability of cheap immigrant labor have helped to breathe life back into the manufacturing sector.

Japanese companies are also beginning to benefit from a weak currency but are blessed with neither an energy production boom nor cheap labor. Still, Canon thinks it is on the road to overcoming these handicaps.