Japan's Panasonic Reduces TV Business... Outsources Small and Medium-Sized TVs to Chinese Companies

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Japanese electronics company Panasonic has decided to outsource the production of small and medium-sized TVs to a Chinese company in order to reduce losses in its TV business.

According to the Yomiuri Shimbun on the 30th, Panasonic has formed a business partnership with TCL, China's largest TV manufacturer, to outsource the production of small and medium-sized TV models. The two companies are reportedly negotiating with the goal of reaching a concrete agreement on the partnership details by May.

TCL, which established a Japanese subsidiary in 2015 and began selling TVs, currently operates home appliance businesses in more than 160 countries and regions. Last year, its TV shipment market share ranked third worldwide.

Panasonic plans to reduce its own production scale from the current level of 6 million units to 3.5 million units by 2024, a reduction of up to about 40%.

Through this, Panasonic intends to cut costs by outsourcing the production of small and medium-sized TVs, which face intense price competition and low profitability, to TCL and then selling them under its own brand such as 'Viera.'

However, it will continue in-house production for high-priced TVs such as large LCD and OLED models, as well as some medium-sized products.

Panasonic is also reviewing the production systems of seven overseas factories, including those in Malaysia and the Czech Republic, and plans to stop TV production at its factories in India and Vietnam within this year.

Additionally, at its only domestic base, the Utsunomiya factory in Tochigi Prefecture, Panasonic is promoting restructuring to convert production lines for other products, except for some models such as OLED TVs.

This restructuring by Panasonic follows its cessation of TV production at factories in China and North America in 2015.

Japanese major electronics companies have been reducing or discontinuing their TV businesses as they lose ground to Korean and Chinese companies in overseas markets.

Hitachi ended domestic production in Japan in 2012 and stopped selling its own brand domestically in 2018.

Toshiba sold its TV business to China's Hisense in 2018, and Sony currently produces and sells only high-priced models.

The Yomiuri Shimbun reported, "In a situation where Japanese major electronics companies, overwhelmed by overseas competitors, have been continuously downsizing their TV businesses, Panasonic has also launched a large-scale restructuring."