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EPTE Newsletter: Sanyo—Japanese or Chinese?

Market share for Japanese electronics companies began to erode in the early 2000s.  Their shrinking sales were felt everywhere in the global market; especially hard hit were Japanese consumer electronics. Sony, Panasonic, Sharp, Sanyo, Toshiba, Hitachi and other Japanese manufacturers were the predominant brands found in the big box stores. Consumer electronics inventories at Wal-Mart, Best Buy, and other large retailers now come from manufacturers in Korea, Taiwan and China. Japanese brands have a negligible market share in the North American market.

Sanyo is the only Japanese brand that is bucking this trend and it can be found on the shelves of the big box stores. How is this Japanese company competing effectively against their Asian competition? Didn’t Sanyo go out of business from amidst accounting scandal? Yup, the whole company was sold to Panasonic several years ago during this accounting scandal. Let’s see what’s really happening with Sanyo.

Panasonic acquired Sanyo, and sold the brand name “Sanyo” and “AQUA” to the Haier Group—a major electronics company in China—for about $10 million USD. Haier is one of the major brands in China, but did not have a very large global market share. Haier decided to market the brand name Sanyo as a “Made in Japan” product. The reason for this is consumers are still wary of purchasing items made in China, even at lower prices. The quality issue has plagued Chinese manufacturers for many years.  Haier does not clearly communicate whether Sanyo is Japanese made or Chinese made. Haier has gained a considerable market share in the LCD TV and white goods segments in North America, and decided to begin a marketing campaign using the AQUA brand name.

A business evaluation of Panasonic concluded that the company is very strong at marketing and sales, but falls short in the technology department. Considering the business performances of Panasonic over the last several years, they are living up to this evaluation because they have not contributed anything significant in the consumer electronics segment. One could now argue that they are losing their marketing and sales strengths. They sold the Sanyo name!

They did not understand the value of the brand names and underestimated its value when they sold it. Panasonic is not alone with this shortfall—other large electronics companies in Japan are not taking advantage of the equity they have built over the years in some of their brand names. They should go back to marketing basics and start using these brand names that consumers can recognize and feel confident about the quality.

Headlines of the week

1. Omron (Major device manufacturer in Japan) 6/2

Has developed a new wiring process on molded housing with inkjet printing. The new process will eliminate traditional printed circuits.

2. DNP (Major printing company in Japan) 6/3

Has expanded the manufacturing capacity of the ten-plates for the nano in-print process of NAND flash memories.

3. NEC (Major electronics company in Japan) 6/6

Has developed a new optical fiber wireless telecommunication system for inconvenient circumstances such as tall buildings and underground.

4. AIST (Major R&D organization in Japan) 6/8

Has co-developed a new secondary battery system with Tsukuba University. It is less expensive and ecologically friendly because of no usage of rare earth.

5. Tohoku University (Japan) 6/8

Has co-developed a high performance bearing system with ZnO coating for small size jet engine power generators.

6. Hitachi Maxell (Major electronics material supplier in Japan) 6/13

Will double the manufacturing capacity of MnO2Li CR batteries for smart meter applications.

7. Screen (Major equipment supplier in Japan) 6/13

Has rolled out a new optical inspection system “IM-4100” for assembling lines with multiple products.

8. Toshiba (Major electric & electronic company in Japan) 6/14

Has developed a new FPGA device with non-volatile memory technology. The new device provides lower cost and smaller area size.

9. Nissan Motors (Major auto manufacturer in Japan) 6/14

Has unveiled a new fuel cell battery system “e-Bio Fuel Cell” for EV. It is a solid state device that generate electric power from ethanol and natural gas.

10. Aval Data (Device manufacturer in Japan) 6/16

Has commercialized a new near field infrared camera A-001IR” with an InGaAs sensor. Wave length: 950 ~ 1700 nm. It works between 1 micro sec. and 10 milli sec.

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