Panasonic plans to invest more than 50 billion yen which equals more than $370 million, in contrast to the growing trends among corporate giants to reduce its dependence on China
Panasonic Holdings plans to boost its investment in China over the upcoming years to expand its production. The company plans to invest more than 50 billion yen which equals more than $370 million, in contrast to the growing trends among corporate giants to reduce its dependence on China. Panasonic’s decision to expand its investment in China owes to the country’s long-term potential to face challenges.
The company will invest the amount throughout the end of three years and expand the manufacturing units engaged in the production of home appliances for local markets, according to the reports of Nikkei newspaper. The company plans to have the first Chinese appliance factory in years online by 2024.
The plant in Zhejiang is expected to have an annual capacity of more than 1 million worth of electrical and small kitchen appliances. According to reports, the company will allow significant decisions to be made locally and develop products customized for the Chinese market to improve sales. Panasonic aims to have targeted expansion goals and plans to build a beauty appliance factory and air conditioner factory in Guangdong province. Panasonic’s decision is in contrast with many Japanese companies’ tendency to rely less on China due to the constant political and economic instabilities.
The recent pandemic breakout and subsequent turmoil witnessed by China in the past few months have reduced the production capabilities of many companies, resulting in the shutting of various factories and plants. For Japan, however, China poses as the biggest trading partner and acts as an important market for Japanese giants like Sony and Toyota. The increasing political tensions between Beijing and Tokyo also affected corporate investments and business decisions.
Many big Japanese companies have already reduced their dependence on Chinese suppliers. Panasonic could bring new features to its products as the company is pitching in a country where consumer trends always favor unique ideas. The online market has had a booming period since the pandemic with almost all the products available for the customers and Panasonic is also planning to make more products available online. The company aims to have around 7 million registered users in its e-commerce platform by 2024. Panasonic intends to expand its online and test with live commerce. The company also has a strong tie-up with China than most Japanese companies and build one of China’s first foreign-owned plants during the post-war period.