JVC to End Domestic Production and Sales of FPD TVs

China View: On April 16, 2008, Victor Co. of Japan (JVC) announced the decision to end its domestic production and sales of flat panel display (FPD) TVs this summer. JVC will instead focus on the European and US markets as retail prices of FPD TVs in Japan have experienced sharp declines while sales in other markets such as Europe and the US have been healthy. JVC is the 6th largest FPD TV manufacturer in Japan. In FY2007, JVC posted a pre-tax loss of JPY8 billion (about US$80 million). In the same timeframe, the company reported that 30% of its LCD TV sales were in Japan out of a total of one million LCD TVs. JVC is expected to terminate its TV production line in Yokosuka, Kanagawa Prefecture.

JVC is also part of Matsushita (Panasonic). It is unfortunate to see JVC moving toward the direction of nearly all other electronics manufacturer: contract manufacturing. I personally like electronic gear that is “Made in Japan” or automobiles that are “Made in Germany”. I hope the day never comes when everything is “Made in China”. I have nothing against China but I do have negative experiences with goods that are made there. If JVC begins to slap its name on goods that are contract manufactured in China and sells it in the European and US markets, the only way to grow the business would be to position itself in between the low-end brands (Vizio, Westinghouse Digital, etc.) and the high-end brands (Sony, Samsung, Sharp).

Even top brands such as Sony and Samsung use China-based contract manufacturing for some of its models. Those are the models that I stay away from. If I am going to be spending additional money for a brand that I think represents quality and the latest technology, I want to know that the focus of the TV was not “minimize cost of manufacturing” but “maximize quality and viewing experience”. In my opinion, although these two goals are not exclusive of each other, the products that are produced differ substantially based on which of the two is the main focus of a company.

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