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issue: September 2003 APPLIANCE Magazine

Tokyo Report
Japanese and Korean Manufacturers Compete in Asia

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All major Japanese and Korean appliance makers have been increasing appliance production in Southeast Asia.

This year, Korean companies such as LG Electronics and Samsung, for example, have expanded production rates of washing machines and refrigerators 30 to 50 percent. In Japan, companies such as Hitachi and Mitsubishi Electric Corp. have increased air-conditioner production rates 20 to 30 percent. Since the future outlook of the world economy appears dim, competition between Japan and Korea seems to have surfaced.

LG and Samsung each increased washing machine production levels in Thailand to the 1-million level this year. LG also expanded its air-conditioner production by expanding production lines, while in May, Samsung began to operate a new microwave oven facility in Thailand.

Meanwhile, Hitachi is increasing refrigerator production in Thailand by 30 percent compared to 2002 rates and air-conditioner production in Malaysia by 25 percent. Mitsubishi Electric Corp. expanded air-conditioner production in Thailand by 15 percent compared to 2002.

In the Thai and Indonesian markets, with the steady increase in popularity of home appliances, total unit production of many products has reached an all-time high rate. Speculating that these markets will be promising, Korean major appliance companies have made full-scale entries, and thus, have large market shares.

Both Japanese and Korean appliance companies export some appliances produced in Southeast Asia. By pursuing mass production, they intend to lower the cost per unit, thereby increasing sales within and outside of Southeast Asia.

In addition, Korean companies such as Samsung are improving their capabilities in terms of product quality and design. Japanese companies intend to manufacture high-end products domestically while importing low-end and popular products from abroad.

Toshiba receives an OEM supply of small (3-kg capacity) washing machines from Samsung and sells them in Japan. This is reportedly the first procurement of white goods from Samsung. Toshiba plans to gradually entrust production of white goods in the low- to middle-price brackets to be sold in Japan and Southeast Asia.

By expanding its model lineup of washing machines procured from Samsung, Mitsubishi Electric Corp. plans to increase the number of washing machines procured in 2003 to a level four-times as high as that in 2002, thereby increasing its market share in Korean washing machines from 10 to 30 percent.

Matsushita produces low-end, window-type air-conditioners from LG, selling them mainly in the North American market while utilizing LGÕs R&D capabilities in components and environmentally friendly manufacturing techniques.

This report is filed by Wasaku Ishida, Japanese correspondent, APPLIANCE magazine, and vice president, JARN (Japan Air-Conditioning, Heating, & Refrigeration News).


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