Japanese firms boost presence in the region
Electronics giants building plants
Japanese electronic-appliance manufacturers are accelerating moves to expand production and sales of appliances such as refrigerators in Southeast Asian countries.
Mitsubishi Electric Corp has started manufacturing luxury refrigerators in Thailand, while Sharp Corp has unveiled a plan to start operating a new plant in Indonesia earlier than initially planned.
The expansion indicates that Japanese firms now view Southeast Asian nations not only as production bases for low-priced goods with low labour costs, but as attractive markets where an increase in sales can be expected.
Until recently, Mitsubishi Electric developed luxury refrigerators mainly for the Japanese market. However, it has started production of such goods for Thai and Singapore markets.
Mitsubishi has begun production of luxury 630-litre refrigerators that cater to the target market – for instance, with large-capacity side-by-side doors, and door racks that can store three-litre bottles.
The refrigerators are priced at Bt60,000, about 10 times that of local products sold at bargain prices.
Tadashi Matsumoto, chief of the company’s Shizuoka refrigerator plant, said, “Our Thai plant has enough technological capabilities to produce luxury models.”
Sharp announced last week a goal of doubling its sales in Southeast Asia to ¥300 billion (Bt97 billion) for the business year ending in March 2017.
The firm will move forward by several months the start of operations at a factory to produce refrigerators and washing machines in Indonesia, so production can begin in autumn.
With Toshiba Corp building an air-conditioner factory in May in Thailand and Panasonic Corp building plants in India and Vietnam, Japanese firms are boosting their presence in Southeast Asia.
One reason for this is that the penetration rates for appliances remain relatively low in the region, with the market expected to expand soon.
Also, competition between Japanese firms and South Korean companies such as Samsung Electronics and LG Electronics is intensifying.
Samsung, which has a Southeast Asian base in Singapore, has been on the offensive recently, with an advertising budget said to total about ¥1 trillion worldwide.
Noboru Fujimoto, an executive managing officer at Sharp, said: “The effects of advertising are great. It’s unthinkable for Japanese firms [to spend so much on advertising].”
The South Korean companies also have released products better designed to meet local needs. For instance, they released air-conditioners in Indonesia that can drive away mosquitoes , and refrigerators in India with doors that can be locked to prevent household employees from stealing food.
