Panasonic Moves Production of Mid-to-High-End Air Conditioners from China to Japan
In a recent report by Nihon Keizai Shimbun, it was revealed that Panasonic Holdings, a Japanese multinational electrical appliance manufacturer, has made the decision to move the production line of medium and high-end household air conditioners sold in Japan back to Japan from Guangzhou, China.
According to a company announcement on June 22, Panasonic will invest a total of 10 billion yen ($70 million) to build new production lines at its local factories, primarily in Kusatsu, Shiga Prefecture. This move is seen as the first step in relocating production lines from China, with Panasonic initially bringing the manufacture of high-end air conditioners and outdoor compressors back to Japan from Guangzhou. Starting in fiscal 2024, the company plans to move production of mid-range models back to Japan. As a result, it is estimated that about 40% of Panasonic’s air-conditioning production capacity will return to Japan in fiscal year 2024.
To accommodate the increased production, Panasonic will install automated assembly equipment at the Kusatsu plant, which is expected to triple its production capacity. The local plant will also implement automated inspections of finished air conditioners and utilize robots for compressor assembly, aiming to improve efficiency. The company anticipates that the production-to-delivery time will be reduced to a quarter compared to the Guangzhou plant.
Meanwhile, the Guangzhou factory will utilize its idle capacity to increase Panasonic’s air conditioner production for the Chinese market.
Panasonic stated that this reorganization will enable the company to deliver products faster and avoid potential supply chain disruptions caused by the ongoing COVID-19 pandemic. Additionally, the move is part of Panasonic’s efforts to promote local production and sales, ultimately enhancing production and operational efficiency.
Masaharu Michiura, president of Panasonic’s air conditioner R&D and production, explained, “In order to provide products close to the market, we decided to return to Japan for domestic production. Of course, we are also aware of the geopolitical risks associated with the US-China trade friction.”
Looking ahead, Panasonic has set a sales target of 290 billion yen for fiscal year 2024 for equipment that combines air conditioning and ventilation, as well as air conditioning systems for entire buildings. This represents a 20% increase compared to fiscal year 2022.
The move by Panasonic to relocate its production of mid-to-high-end air conditioners from China to Japan reflects the company’s commitment to adapt to changing market dynamics and ensure a more efficient supply chain.
What advantages does Panasonic expect to gain by moving production back to Japan in terms of quality control and responsiveness to market demands
Ge air conditioners as well.
The decision to move production back to Japan comes as part of Panasonic’s efforts to diversify its supply chain and reduce reliance on China. The ongoing trade tensions between China and the United States, as well as disruptions caused by the COVID-19 pandemic, have highlighted the risks of relying too heavily on a single country for manufacturing.
Furthermore, by moving production back to Japan, Panasonic aims to improve quality control and enhance product development capabilities. The company believes that being closer to the domestic market will enable quicker responses to customer needs and preferences.
Panasonic has already faced challenges in the Chinese market, with increased competition from local manufacturers and rising labor costs. By shifting production to Japan, the company hopes to regain its competitive edge and strengthen its position in the Japanese air conditioner market.
The move is expected to create new jobs in Japan and support the local economy. The construction of new production lines will require additional workforce, and the increased production capacity will contribute to the overall growth of the company’s operations.
While the relocation of production may result in higher costs initially, Panasonic believes that the advantages gained in terms of quality control, flexibility, and responsiveness to market demands outweigh the potential drawbacks.
This decision is in line with a broader trend of companies reconsidering their supply chains and reassessing the risks associated with relying too heavily on a single country. As geopolitical tensions and economic uncertainties persist, this move by Panasonic could serve as a turning point for other companies to reevaluate their manufacturing strategies.
It’s encouraging to see Panasonic’s decision to shift production back to Japan. This move not only ensures superior quality for their high-end air conditioners, but also strengthens their commitment to support local manufacturing and boost Japan’s economy. Kudos to Panasonic for prioritizing excellence and contributing to a sustainable future.
It’s encouraging to see Panasonic prioritizing quality by moving production of high-end air conditioners back to Japan. This decision not only supports the Japanese economy but also ensures better products for consumers. Kudos to Panasonic for making this strategic move.