Matsushita to Cut China Production Costs Jul 22, 2004

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Matsushita Electric Industrial Co. plans to cut production costs in China by as much as 20 percent to remain competitive, according to Yukio Shohtoku, executive vice president.

Matsushita said it plans to consolidate its 45 manufacturing units in China based on product categories, such as electronic components or home appliances, following similar efforts in Japan. The Osaka, Japan-based company said it will also enhance local parts procurement.

"Reducing costs by 10 percent a year is just not enough—the continuing decline in prices keeps spurring the competition," Mr. Shotoku said. "Depending on the product, we have to reduce the costs by 10 to 20 percent."

Matsushita's manufacturing business in China is growing as much as 30 percent annually, and is expected to make goods worth 1 trillion yen (approx. U.S. $9.2 billion) in the year ending March 2006.

The company, known for its Panasonic brand, also said it plans to start production of its DIGA DVD recorders in China by March 2005. (Bloomberg)

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