Hitachi Closes last TV Factory

Another brand basically exits the business of making the TVs. Does not mean the exit of the Hitachi brand on Televisions, but even it in Japan it will be outsourced to someone else to put it together for them.

JZ

By JURO OSAWA

TOKYO—Hitachi Ltd. said it will stop producing television sets and outsource all production later this year, as the global electronics makers struggle to make money in the overcrowded, low-margin market.

Hitachi's plant in central Japan's Gifu Prefecture in October will stop making TV sets and focus instead on repairs and making components, the company said. "We can't expect the domestic TV market to grow much, and price competition is getting more and more intense," a Hitachi spokesman said Monday.

Hitachi's TV-set business has been bleeding red ink since the fiscal year that ended in March 2006. The company already outsources production of all TV sets sold outside Japan.

Its sole TV-set factory in Japan makes sets for the domestic market. Ending production at the plant is part of the Japanese conglomerate's effort to shift from consumer electronics toward so-called social-infrastructure operations—such as electric power, railway systems and information technology—where it sees greater potential for growth.

The move also affirms how tough the market is Japan, where domestic manufacturers had enjoyed solid demand for homegrown products. Such demand no longer is assured, following the end of government subsidies that supported record domestic TV-set sales in fiscal 2011.

Hitachi is a relatively minor player overseas, where Japanese heavyweights Sony Corp. and Panasonic Corp. are locked in a contest with South Korean rivals Samsung Electronics Co. and LG Electronics Inc. Also, the yen's strength hurts overseas sales when they are repatriated into the Japanese currency and makes the price of Japan-made goods less competitive overseas.

Even the biggest players are having difficulty maintaining profit margins amid global price competition. Sony and Panasonic also are restructuring their TV-set operations to stanch losses. Panasonic in October said it would stop production at two Japanese TV-panel factories—one making plasma display panels and the other making liquid-crystal display panels—this fiscal year. The decision will leave the company with one plasma-panel plant and one LCD plant in Japan.

Moody's Investors Service on Friday lowered its long-term debt ratings on Sony and Panasonic and gave both negative outlooks, citing uncertainty over their unprofitable TV-set operations.