Japanese consumer electronics giant Sony Corp. will proceed with expansion plans in China in an effort to counter plunging profits at home and abroad, a senior executive was quoted as saying. The company is reportedly planning to slash up to 20,000 jobs, or 12.5 percent of its labor force by March 2006, but those cuts will target developed economies only, the China Daily said. China will not be affected by the job cuts, with Sony planning to boost its business in China because its market has huge potential, the newspaper cited Kunitake Ando, president and chief operations officer of Sony, as saying.
Sony, which saw net profit fall 25.3 percent in the three months to September to 32.9 billion yen (U.S. 300 million, down from 44.1 billion yen a year earlier, plans to increase sales in China to four billion dollars by 2005. Amid declining sales in its games segment, consumption levels in the Chinese market compare well with those in developed countries and even lead some markets, Mr. Ando said. As a result Sony will launch its latest products on the Chinese market at the same time as elsewhere, he said.
According to the newspaper, Sony decided last May to increase its profit ratio to 10 percent by 2006 and the corporation will focus on developing markets as well as products with higher profit margins.
In China, Sony is strengthening its local engineering and manufacturing technologies, the newspaper cited Morio Minoru, executive vice-chairman and chief production officer of Sony, as saying. A rapidly growing market, price-competitive components, spare parts supply systems, and abundant local labor are all advantages that the company hopes to capitalize on.
to Daily News