Japan Inc's electronics arm could learn from German auto industry
You don’t have to be the biggest petrolhead to know that the vast majority consider German cars to be the pinnacle of the automotive world. Daimler, BMW, Volkswagen. Cars from the German trifecta are exported daily to every corner of the world, delivered to customers ready to pay top dollar for what they consider to be the best the auto industry has to offer to them.
What these customers consider to be “the best,” however, is largely a subjective affair. German cars are not very reliable. Nor are they reasonably priced. The stories I hear are consistent with the figures: after getting his masters degree and landing a decently comfy job, an acquaintance of mine decided to reward himself with a 4.5 million yen Mercedes-Benz. “It wasn’t cheap,” he boasted on Facebook, “but I felt that it was a solid buy.”
As it turns out, the transmission on his car went kaput after three months and he had to take it in for repair.
So why exactly do people buy German cars? For many, the answer is one and the same: prestige. Many people want to show that they have succeeded. And to show success, they buy the best their money can get them to show the world that “Hey, I made it to the top!” Not because they feel more solid than a Toyota, or because they have more high tech goodies than a Chevrolet. Most individuals buy German cars to show off.
To me, that’s perfectly fine. Germany has the braggart niche (a relatively large one at that) covered better than any other automaker. As long as the brand image remains, people will continue to buy Bimmers, Benzes and Audis no matter how unreliable or expensive they might be. The head honchos in Stuttgart are laughing all the way to the bank. Keep the reputation intact, lock down on the niche, and money will only continue to roll in.
If only the same could be said for Japanese electronics corporations. Sony is losing money, badly. Panasonic is sustaining equally heavy financial damage. Nintendo is nearing game over, and the only thing sharp about Sharp is its losses. The consumer electronics arm of Japan Inc is being bled dry.
The root cause of the problem? Japan Inc thinks that it is German. Or would like to think so, anyway. Many electronic products offered by Japanese corporations are oftentimes more expensive than the competition with no noticeable advantages over the same competitors. I was looking to replace my ancient CRT television with a new LCD model and shopped around online to see what I could find. To my surprise, I discovered that many LCD TVs offered by Samsung and LG were not only cheaper, but were superior to the Japanese televisions spec-wise as well.
Japan’s specialty used to be in selling cheap, common electronic items that were better than the competition. The electronics arm of today’s Japan Inc fulfills neither condition. Without the brand equity level of a German automaker, which brings back customers regardless of how bad the product actually is, Japanese electronics manufacturers are losing market share to the South Koreans, who are not doing much more than doing what Japan has failed to continue with.
In our world today, electronics are considered to be commodities. People don’t care where it’s made, and there’s no cache associated with owning a Panasonic over owning a Samsung. People will only buy something if it does something better than the competition or, at the very least, if it is priced better than the rest. With products from Japanese electronics corporations being neither of these things, there should be little wonder as to why electronics companies from Japan are continuing to lose money.
Sony is not Volkswagen. Charging more for a mediocre product just doesn’t work when it comes to consumer electronics.