Sony to outpace China sales target
Reuters
Shanghai, January 18, 2005
Sony, which rivals Matsushita as the world's top consumer electronics maker, expects China sales to climb by about half in the fiscal year ending March 2005, its country chief said on Tuesday.
That rise exceeds its own forecasts, driven by strong demand for digital cameras, camcorders and laptops, Kei Kodera, chairman of Sony in China, told Reuters on the sidelines of a business awards ceremony in Shanghai, China's wealthiest city.
Kodera added that Sony planned to introduce the Playstation 2 in several more Chinese cities this year but that it would have to tread carefully because of rampant piracy.
Sony has already said sales in China -- its fastest-growing market -- jumped 70 per cent to $1.7 billion in the year ended March 2004, and were on track to hit $8 billion annually by 2008.
"We saw strong growth in digital cameras, camcorders and VAIO notebooks," Kodera said in an interview.
"We expect sales to surpass our targets. Sales will grow by 50 per cent this (fiscal) year," he said, but declined to discuss the forecast for the year in detail.
Sony joined a wave of Japanese corporate giants that have built plants in China to capitalise on lower costs, while enhancing research and development and boosting staff.
Rivalry in China's $9.8 billion consumer electronics market is heating up, with South Korea's Samsung Electronics Co and domestic players such as Changhong slugging it out for consumers' cash.
An increasingly affluent populace with a taste for household appliances taken for granted in Japan and other developed economies is fuelling the market's expansion.
NUMBER THREE MARKET
China accounted for about two per cent of Sony's global revenue but generated more business for Sony than any other country except the United States and Japan.
It's unclear which foreign player held the lead in China because of the fragmented nature of the market.
Price-based competition from domestic manufacturers, however, would weigh on margins. Rampant software piracy is expected to hinder Sony's efforts to market its blockbuster PlayStation 2 console, a key driver of global operating profit.
"We plan to sell the Playstation 2 in more Chinese cities this year, but we have to be careful because of piracy issues," Kodera said.
The Japanese firm has previously said it only sold the PS2 in Shanghai and Guangzhou, two of China's richest cities. Sony has also been criticised as slow to market innovative products such as flat-panel televisions.
It has invested about a $1 billion in China over the past decade. It also vies with Sharp Corp of Japan.
© HT Media Ltd. 2004.