Japanese-owned Household Appliances Sell Assets to Become Chinese Enterprises

Recently, Japanese media reported that the Japanese electronics giants Sony, Panasonic, and Sharp are selling their buildings and departments in hopes of obtaining funding to survive.

At the same time, home appliance companies in China and South Korea took the opportunity to fill the gap left by the Japanese household appliance brands.

Big Three sells $3 billion worth of assets According to domestic media reports in Japan, home appliance giant Sharp has acquired a lot of assets in its hands (including office buildings in Tokyo, large-size panel factories and small and medium size panels) in order to obtain a new 4.6 billion loan from the Japanese consortium. The factory's equity, as well as almost all of its fixed assets, has been pledged. At the beginning of December, it was reported that Sharp plans to sell its three LCD TV manufacturing plants in Nanjing and Mexico, China, to China Taiwan’s manufacturing giant Hon Hai at a price of 55 billion yen (about US$670 million). group.

Another home appliance giant Matsushita also plans to improve its own cash flow by selling assets. Recently, Hideki Kawai, chief financial officer of Matsushita Electric, revealed that by the end of March next year, Matsushita plans to raise 1.34 billion U.S. dollars from the sale of assets and stocks to other companies. It is said that Matsushita plans to sell its Panasonic headquarters built in 2003 in Tokyo. Building.

At the same time, Sony also plans to sell its 37-story company headquarters building in New York City. The sale of this property will enable Sony to obtain US$1 billion in funds. As early as 2009, Sony had already shut down or sold most of its loss-making TV business overseas. According to sources, Sony did not rule out the sale of its highly competitive battery business. Hon Hai and Shenzhen BYD (002594, stocks) are both negotiating targets.

Japan's home appliance industry collective huge loss "fund shortage"

According to the performance reports of the three companies in the second quarter of this fiscal year, the Big Three failed to reverse the embarrassing situation of consecutive quarters of huge losses. Among them, Panasonic had the largest historical loss in the last fiscal year (approximately $10.2 billion). In early November, Panasonic’s performance report estimated that the company’s net loss for the current fiscal year ending March 31, 2013 will reach 765 billion yen (approximately US$9.6 billion). For two consecutive years, a huge loss of nearly 20 billion U.S. dollars, and now the cash in hand is less than 500 billion yen.

The days of Sony and Sharp are not much better. According to Sony's performance report, in the second fiscal quarter ended September 30, its loss amounted to US$194 million, a decrease of 44% compared to the loss of US$340 million in the same period last year. However, this fiscal quarter has been its seventh consecutive loss.

Sharp's net loss in fiscal 2011 reached a record 376.1 billion yen (about 4.66 billion U.S. dollars), however, this record was quickly broken. Performance data shows that in the fiscal year from April to September 2012, Sharp had a total loss of 387.584 billion yen (approximately US$4.84 billion). In fiscal year 2012, Sharp is expected to lose 450 billion yen. Consecutive huge losses have made Sharp go bankrupt.

Chinese and South Korean home appliance companies took the opportunity to seize the continued huge loss, making the Japanese home appliance giant's position in the global home appliance market quickly degenerate.

All along, home appliances are Japan's key export products, and Japanese home appliances are selling well in the global market. However, since 2009, Japan has become an importer from home appliance exporters. According to the data released by the Japan Electronics and Information Technology Industry Association, in 2011, Japan’s total imports of home appliances and its parts and components showed an increase. The former hegemons not only lost Europe, Asia, and other traditional markets in succession, but even the domestic market was difficult to maintain.

At the time of the Japanese household appliances company, Nissan, South Korea's Samsung, LG and China's Haier, TCL, Skyworth and other home appliance companies took the opportunity to replace the Japanese household electrical appliance companies, and become the leader in the global appliance market. Samsung recently released its third-quarter financial report showing that the company’s net profit in the third quarter reached a record high of 6.565 trillion won (approximately US$6 billion), a 91% increase over the same period of last year, due to strong smartphone sales and increased demand for display panels. .

Ovid data shows that the total shipments of Japanese Sony, Sharp, Toshiba, and Panasonic TVs were 59 million units and 61 million units in 2010 and 2011, respectively. It is expected that total shipments in 2012 will likely be lower than 59 million units; China's total shipments of Haier, Hisense, Konka, Changhong, Skyworth, and TCL, the six largest domestic brands, were 32 million units and 39 million units in 2010 and 2011 respectively. It is expected that the production volume of the six largest brands in 2012 will reach 45 million units. If you add other small brands, the total volume of China's color TV brands will reach 61 million units in 2012, exceeding the total output of Japan.

In 2008, Matsushita acquired Sanyo and wanted to use it to strengthen its competitiveness in the home appliance industry. However, this was counterproductive. By July this year, Panasonic had to transfer Sanyo’s refrigerator and washing machine business to Haier. Haier entered the Japanese market with the Japanese-made AQUA brand and achieved counterattacks.

Liu Buchen, a veteran of home appliances, told this reporter that this year's annual trend of Japanese home appliance companies is worse than expected, and it is difficult to draw an optimistic conclusion.

Nanfang Daily reporter Tian Zhiming reporter observed that the lack of innovation is the decline in Japanese household electrical appliances, mainly because of the Japanese household appliances in just a few years from brilliant to declining, many Japanese home appliance companies attributed the continued appreciation of the yen. However, more people in the industry have stated that the fundamental reason that led to the decline of Japanese home appliance companies is not the appreciation of the yen, but the loss of innovative spirit of Japanese home appliance companies. Over the past few years, Japan’s home appliances have not shown impressive technology in innovation, but they have also insisted on high prices and cannot compete with Chinese and South Korean companies.

The current competition in the home appliance industry has evolved from a simple hardware technology competition to a multi-level competition such as hardware, software, and services. The business model of home appliances has also undergone great changes. Today, the home appliance industry represented by color TV sets is developing in the direction of intelligence and platform. Internet TV and cloud TV have emerged, and Japanese manufacturers that are very weak in this area will further lose their right to speak.

Self-styled, lack of innovation is the root cause of the decline of Japanese home appliances. Chinese home appliance companies should learn lessons and firmly grasp the main line of innovation.