As part of its goal to reach the Japanese marketplace, Chinese appliance maker Haier Group Wednesday joined hundreds of other global companies in lighting up Tokyo's shopping district of Ginza with an electric billboard.
Sanyo-Haier Co., a joint venture with Sanyo Electric, hopes to sell at least 100,000 units of its new washer-dryer machines equipped with drum cradles in Japan in the 12 months starting Oct. 1, 2003. Priced around Y60,000 (approx. U.S. $508), the compact washer-dryers will be sold under the Haier brand.
Sanyo developed the concept for the machine and provided the software technology required with the help of its semiconductor company, while Haier designed the appliance's structure and took on the manufacturing. The pair's target market is Japanese in their late-20s and mid-30s, single, or young and married.
"There's demand in the Japanese market for a niche product like this one," Haier Group's chief operating officer Yang Mianmian said at a press conference in Tokyo. "Demand for drum-based washer-dryers is rising in Japan."
Sanyo and Haier officials believe the Japanese market for advanced washer-dryer machines will account for about 18 percent of all fully-automated washing machines in the fiscal year ending March 2004, with a market size of about 700,000 units, up about 530,000 units from a year earlier.
Since the formation of their broad alliance in early 2002, Haier has been selling refrigerators, washing machines, and other items in the Japanese market under its brand, with the help of Sanyo Electric. Sanyo sells its own brand of electronic appliances and batteries through Haier's network in China.
However, financial results suggest that Haier and Sanyo may be off to a rough start in attracting Japanese consumers.
Tsutomu Asano, president of Sanyo Haier Co., said Wednesday that the venture has lowered its sales target to Y6 billion (approx. $50.8 million) for the year ending in March 2004 from its earlier projection of Y10 billion, citing the longer-than-expected time to develop and perfect products with the Chinese company.
"We want Sanyo Haier products to have the same high quality as Sanyo products, " said Mr. Asano, explaining the reason for the lower sales forecast.
Another hurdle for the venture is to boost brand awareness toward the Chinese brand in Japan. Many Japanese consumers still have a perception that products " Made In China" are inferior in quality to Japanese products.
But if the new billboard and the tie-up with Sanyo can brighten up the image of Haier's products, it might well help the firm become a consumer electronic giant in Japan. (Dow Jones)
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