Fri, Jun 03, 2005 - Page 11 News List

Hitachi eyes China for plasma TVs

BOOMING MARKET The firm plans to expand production at a plant in southern China, on expectations that demand for the televisions will rise sharply by the end of next year


Hitachi Ltd, Japan's largest electronics maker, is increasing production of plasma televisions in China as it expects demand ahead of the 2008 Beijing Olympics to boost sales in the country 10-fold over two years.

Sales of the TVs in China will reach 100,000 units by the end of December next year, up from 10,000 last year, Hitachi spokesman Hiroshi Inami said, confirming an earlier report in the Nihon Keizai newspaper. Tokyo-based Hitachi's global sales of plasma TVs are expected to gain 90 percent to 570,000 units by next March, he said.

The company will also boost production at Hitachi Fujian Digital Media Co, its plasma television joint venture in southern China, to 10,000 TVs a month by September, up from the current 1,000 units, Inami said. For the year ending March 2006, the company plans to invest about ?1.96 billion (US$18 million) in the venture, ?400 million more than planned, he said.

Hitachi targets having a fifth of China's plasma TV market next year, up from the estimated 15 percent this year, Inami said.

China's flat-panel television sales will reach 330,000 units this year, he said.

Makers of flat-panel TVs such as market leader Matsushita Electric Industrial Co are raising production and increasing investment to capture a bigger share of the US$11 billion plasma market. Plasma displays compete against liquid-crystal displays and glass tubes among technologies used in digital televisions.

Matsushita Electric, the world's biggest seller of plasma display televisions, will cut 500 jobs in the US, or 18 percent of its workforce there, before September and use the money to boost advertising.

"We want to slim down our operations, and whatever costs we save will be spent directly on marketing" plasma televisions, said Yoshihiko Yamada, 54, chief executive of the North America business, in an interview in Osaka.

"We'll have a double-digit gain in US sales" in the year started April 1, he added.

He didn't provide figures for how much money the company will save from the job cuts, and said spending on marketing will almost triple.

He declined to give details of the job cuts.

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