This paper analyzes the locational adjustment and industrial agglomerations of the shipbuilding industry. The shipbuilding industry is originally international and influenced by business fluctuations. Therefore, it has adjusted its location and changed the dynamics between the production bases and the regional economy in response to a competitive environment. Due to international competition, large enterprises cut the shipbuilding sector in metropolitan and the Seto Inland Sea areas, and converted to other sectors. Some small and medium enterprises in Osaka closed their factories and constructed new ones in the northern part of Kyushu and the Seto Inland Sea area. On the other hand, small and medium enterprises based in the Seto Inland Sea remained in place and continued their shipbuilding activity. Consequently, the production of small and medium enterprises on the Seto Inland Sea has significantly increased. The center of the shipbuilding industry was shifted from large enterprises to small and medium ones, and from the metropolis to the Seto Inland Sea area. Linked to the movement of the shipbuilding, the ship machinery industry was also shifted to the Seto Inland Sea from metropolitan area. However, influenced by locational inertia, only ship machinery makers in the Hanshin area still remained in place and highly agglomerated. The central activity of small and medium shipbuilding enterprises on Seto Inland Sea takes place in Imabari City. Imabari has original and multiple industrial agglomerations, composed of the headquarters of small and medium shipbuilding enterprises, small ship machinery enterprises, small ship owners, trading companies, educational institutions, administration, classification societies, etc. The actors of the agglomerations are closely united with each other through perpetual face-to-face interactions. They comprise a unique organization, "Mujin-no-kai", which coordinates their respective interests. Belonging to it ensures access to informal information unavailable elsewhere. In these agglomerations, Imabari-Zosen has built horizontal relationships with fixed partners. In return for it, ship machinery enterprises conventionally accept repair services from Imabari-Zosen after the expiration of warranty term. From the above, it can be said that the actors of Imabari agglomerations are interdependent. By contrast, the actors of former shipbuilding cities on the Seto Inland Sea used to be built on vertical intercorporate relationships. In these cities, large shipbuilding enterprises ranking the highest position would use other companies as subcontractors. Horizontal relationships among these agglomerations give Imabari a competitive edge when receiving orders of shipbuilding, allowing small and medium shipbuilding enterprises on Seto Inland Sea to continue their activities, and leading to the increased productivity of the Japanese shipbuilding industry.