Currently, when I play as the UK, USA, Japan, my strategy is just outbuild the enemy fleet and naval bomb them into oblivion. It always works.
It gives me very little incentive to sit and study how navies are actually supposed to operate.
You are going to need a mod.
Vanilla HOI4 doesn't work. That's what I've found for a long while now.
Turn
Expert AI on at a minimum. When you have the appetite for a difference experience than vanilla HOI4, perhaps try
Black ICE/Total War/Hearts of Oak. I don't think any of them changes the naval AI more than Expert AI does but they could change other aspects that influence the naval game.
Otherwise, the naval game is trivial as you find. AI navies don't stand a chance. They best they can do is to (correctly) avoid contact while concentrating their fleet. The naval AI needs better build strategy, better taskforce management, nation based AI and the whole naval combat probably needs some re-balancing.
Having said that, if you managed to conquer most of the world as Japan without US being in the war and without war against UK + France. Don't complain that you don't have a challenging naval matchup against UK or US when you do enter war against them at a time of your choosing. Similarly, if your strategy as Germany is to blockade UK into submission, after the blockade, don't complain Royal Navy is a push over. (Granted, the blockade is trivially easy to obtain and that's the problem with AI.) There are just strategic situations that should by nature trivialize the naval aspects of the game.
Or do people just build hundereds of ships and literally outgun the enemy? Would like to hear peoples thoughts/advice
Not for me.
I prefer 2 good-enough ships early over 1 best perfect ship 2 years later. (Although, unfortunately, both work.)
With Black ICE, the cost can scale up a lot with more options with range and such. Germany for example cannot afford the chromium for late game modules. (In Black ICE, chromium is required.) If your navy is too weak, even the invasion on Norway/Sweden can't be done. So no chromium -> more wait; more wait -> no chromium. It is one of the small things that reward a tailored build strategy vs best and the shiniest
Hundreds of ships are also not doable due to the 3 dockyard per ship restriction. Can't remember what vanilla does. Black ICE applies that restriction to DD and SS as well as heavier ships. Also again with Black ICE, internal resource trade (siphoning resources back to capital) cost a LOT of transports -- I need 3 thousands as Japan by the beginning of 1941. Troop supplies cost a lot too. So that further inhibits the quantity on your navy.
There is a capital ship primacy and with the right bonus modifiers primacy in CVs as well. So my fleets are centered on concentration of CVs and BBs/BCs. I then have good AA cruisers and DDs. (When you have them, you feel enemy CV and naval aviation being trivial*; but when you don't....) I do a build strategy where I queue the expensive ships early -- and not go to naval wars without them and then build cruisers and DDs when I have the opportunity. Germany in particular needs non-stop sub building early game. With BICE, Allies are capable of attriting your sub force. Japan needs a lot of transports. With both, I downgrade range among BB/BC/CV to match that of cruisers to reduce cost. I also calculate armor with later bonuses ahead of time to reduce the need for armor which in turn reduces cost. I let the Ironside trait that I expect to gain on my admirals to balance out Piercing bonuses from Shell designs. High piercing is never needed against AI but in any case, I wouldn't invest in super heavy guns. I like >30kt for role-playing. (Faster heavy ships means faster strike TF which means real benefits. But 1 kt down doesn't really hurt.)
At the moment, I make MIN_NAVAL_EQUIPMENT_CONVERSION_IC_COST_FACTOR = 0.05. (Vanilla HOI4 has it at 0.2. BICE at 0.1.) It means you are able to add/swap AA modules cheaply -- meaning that the standard for capital ship is to defer radar/AA/etc modules for later refit, which was the case in history. You are also a lot less bottlenecked by naval XP, which for ship designs makes no sense. I find that much better for immersion but not enough to change overall build strategy -- you still build the same ships with the same gun, engine, range, etc in the same sequence. With refit cost factor at 0.2, it means you may not build AA on your big ships, you make up with fleet wide AA and make sure your big ships dont operate alone.
* examples:
EDIT: links
