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.
Author Infomation
- Peter Dyloco
- Peter Dyloco is concerned about the gradual decline of the Japanese economy. His objective is to bring a fresh perspective to the issues currently facing the country, and spark discussion that may lead to their potential resolutions.
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31 Comments
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2
gaijinfo
Ah, the old sour grapes. German has a robust economy, because they have highly efficient factory workers that produce products that they export to Europe and the rest of the world. It's not just the cars. Germany is known for producing quality products that people will gladly pay for more. And this is not a recent phenomenon.
Japan is/was a flash in the pan. They were OK when they had cheap labor and could undersell everybody else. Now that they can't, the economy will slowly shrink. Japan was never known for quality products. Cheap products that were pretty good, yes. But not quality that people were willing to pay for, moreso than other products.
This is patently false. German car companies would quickly go out of business if they produced a deficient product. This is just sour grapes on the part of the writer.
0
sillygirl
ever since the bubble years - expensive = good in japan. what a crock. even the chinese (haier) is gaining ground with good cheap products. wake up japan. the bubble is long gone and people don`t plunk down good money for medioracy.
0
oginome
Japan and Germany continue to both have robust manufacturing and exporting economies. Japanese cars are as valued for reliability in the same way that German cars are valued for prestige. Japan only recently began to move into the luxury car market with the Lexus.
Not really, the days of Japanese cheap labour were in the 50s and 60s. Japan was a high income nation from the 70s onwards and it was in the 70s and 80s that Japanese electronics and cars started to take over the world. And the value of Japan's exports has increased over the last 20 years. 2010's trade surplus was bigger than 1990's. Japanese companies are having a problem right now in the area of electronics, because they are commodified goods. But there are other areas besides electronics where Japan is dominant, such as advanced manufacturing and capital goods production.
How was it sour grapes when it the article was about what Japan could learn from Germany? He was being complementary. And Japanese cars continue to rate the highest in the world for reliability.
http://news.drive.com.au/drive/motor-news/revealed-the-most-reliable-cars-20111028-1mn7b.html
Japanese car makers continue to build the world’s most reliable vehicles, according to the latest annual survey from respected US magazine Consumer Reports.
Toyota’s North American youth brand Scion topped the rankings, with all but the last spot in the top 10 occupied by Japanese companies. Lexus was second, followed by Honda’s luxury off-shoot Acura, Mazda, Honda, Toyota, Infiniti, Subaru and Nissan.
The survey, which collated data from 1.3 million 2002-2011 model-year vehicles leased or owned by Consumer Reports readers, revealed that 96 per cent of Japanese vehicles rated Average or Much Better Than Average compared with a 64 per cent figure each for US and European vehicles.
-1
NeverSubmit
German cars, especially Benz and BMW were famously reliable and durable in the 70s, 80s and early 90s. Everything went downhill after Lexus and Acura forced them to rethink their overengineering philosophy.
There's no denying also that Japanese products are well designed, reliable and of good value.
"Made in Japan" is a globally recognized marque of quality, and rightfully so.
-4
Cat5
Despite the reliability issues of BMW and MB they still have, in the case of BMW anyway, three things over their japanese rivals. Vehicle looks and handling/performance. Handling/performance is what gave BMW their reputation and believe it or not they still have managed to maintain that for most models, and if they don't they have the kind of styling people are willing to pay for.
I don't how many times i have read or seen reviews of japanese luxury cars, particularly lexus, where the reviewer rails against how boring and conservative the styling is or how average the performance/handling is.
As for your comments about electronics,well, you're spot on. Consumer electronics has always been the pride and joy of those who can manufacture it the cheapest. Most western countries had to face this at some point, letting go of manufacturing "commodity" tech and focus on higher end goods. Some countries, like england, thought it would be wise to be a mostly service economy (i.e. banking and real estate etc) but that's for another thread.
The point is Japan will lose most of its cheap to medium valued electronics manufacturing that's just a given. I know oginome is always defending japan over their "advanced manufacturing" but what he doesn't seem to realize is that it too will be copied and improved upon by other countries far more hungry and desperate than japan is today.
1
napoleancomplex
I assume mr.Dyloco's friend bought this Benz new? It'd be under warranty anyways but he doesn't give us this info.
I drive a 2003 VW Passat, roughly 210,000km at this point and I got it used in 2005. The only components that went was the water pump and breaks and that was after the usual amount of km's listed in the user's manual. I would classify this car as reliable
0
xyberc
Maybe you have never driven a German car before? My experience was that they were well-engineered, solid, and reliable. I had three Audi's and a Porsche before. All were trouble-free and fun to drive.
I rented American, Japanese and Korean cars abroad before when I traveled. I was surprised by the good handling of the Korean rental car, but all these cars were obviously not anywhere close to the same caliber of their German counterpart (of the same sizes/grades) in terms of luxury and ergonomics, among other qualities.
I also owned a Peugeot before but it felt flimsy. My wife's Volvo was solid but not inspiring. I love my Aston Martin the most - it's elegant and a wonderful driver's car.
1
NeoJamal
Until they outsourced to China and some poor American paid the price.
-2
oginome
Just as German car manufacturers will maintain their reputation for design, handling and prestige, Japanese ones will continue to be known for safety, quality and reliability. These are their respective strengths.
Germany certainly doesn't produce cheap and medium valued electronics on the same level as South Korea or Japan does and yet along with Japan, it has come to dominate advanced manufacturing. These goods have not become commodified. Japan has certainly not let things slip in these high end areas.The amount Japan spends on R&D in proportion to its GDP is still one of the highest in the world, just behind Israel.
http://en.wikipedia.org/wiki/Listofcountriesbyresearchanddevelopment_spending
What you don't seem to understand is that Japan is certainly not listlessly and apathetically standing by like you think it is.
-6
Cat5
oginome you still don't seem to understand. You always go on and on about "advanced manufacturing" but never seem to identify what that is. Tools for manufacturing? Your arguments are too vague.
lol, tell me aginome where did i use the words "Listless" and "apathetic" to describe japan? Tell me? Your delusional mind seems to conjure up conversations that never happened.
Remember there was that japan today article in january that quoted a japanese guy saying japan has lost its edge in advanced manufacturing of TVs. It would seem that some japanese people, in high places, are admitting to their edge slipping despite their investment in R&D.
Let's consider "advanced manufacturing" in the form of cars....do a google search for china copying cars. You will find lots of articles like this one: http://gemssty.com/2006/10/29/top-10-copycat-cars/
..that shows how china is very serious about being a manufacturing powerhouse. BMW sued a car poducer in china and LOST..do you know why? The chinese government felt it was ok for chinese companies to rip off other non-chinese manufacturers wholesale and not be sued for it. The chinese government said they want to become independent of foreign products and have their own solid manufacturing base that, surprise surprise, will become a major exporter.
Yes seeing those copy cat cars is laughable and entertaining, but remember where korea was just 20 years ago, the laughing stock of the automotive world only to now start to eclipse japanese cars. If china holds steadfast to their goals they will achieve it.
Everyone knows that producing vehicles involves engineering of damn near every discipline: electrical, mechanical, materials, safety etc etc... You seem to think that japan is invincible to losing it's "advanced manufacturing" to any sort of challenge from other countries. But here we have a clear example of how china is trying to become a major player in "advanced manufacturing" by ripping off their rivals...all with government support and protection.
I am certainly not wishing for japan to 'lose', the last thing i want is to be in japan with high unemployment and an eroded self esteem. But the point is china has FAR more people resources and desire to dominate in the area you so, falsely, hold dear.
-3
oginome
I have defined it. Producers materials. The high tech which companies need to create their own components and technology. Capital goods production is another very important area where Japan and Germany are the dominant players.
http://www.businessweek.com/magazine/content/10_49/b4206044280596.htm
You implied it by saying Japan would just let these 'desperate' and 'hungry' rivals take over. Japan still heavily invests in R&D as we know, and remains innovative and dynamic in manufacturing.
That was about LED. Japan still makes the technology required by these companies, both Korean and Japanese, to produce this LED. And again, TVs are commodified goods. You don't seem to know the difference, lol. TVs are not advanced manufacturing.
Cars are NOT advanced manufacturing. South Korea being hugely successful with Hyundai and now China attempting to go down the car manufacturing route themselves doesn't take away from Japanese or German automobile dominace. German cars are renowned for prestige, Japanese ones for reliabilty. And Korea is not 'eclipsing' Japanese cars. Hyundai has been an enormous success, but it does't mean the death of Japanese car industry, just like the rise of Japan didn't kill off German car manufacturing. Hyundai is an important player in the field, but doesn't mean Toyota is suddenly about to go bankrupt, lol. Why don't you apply the Hyundai example to the WHOLE car industry, not just Japan's. While Hyundai was rising and the Korean car industry was growing, Japan's industry also continued to grow, and Toyota became the world's number one car maker in 2008 (albeit not any more). Remember that was in 2008, not 1988, when Korean competition in the automobile sector was negligible.
Advanced manufacturing is heavily skill and capital intensive, and can't be learned in a couple of weeks from a manual. Read this
http://www.economist.com/node/14793432
-5
Cat5
BS. There are cars that are just good enough to go from a to b and there are cars that have technological marvels that lead the industry and rely heavily on the advanced technology you cling to. Give your head a shake.
Wrong, german cars are known for their style, performance and handling. "Prestige" can be applied to the japanese cars as well, certainly those who value "reliability" reports over stye and performance.
Wrong! It was OLED and NOT LED, massive difference! But i enjoy seeing how you are selective about which technology is "advanced" and which isn't to suite your arguments. Again TVs are advanced manufacturing since they rely on the technologies you cling to in that article.
oginome do you understand that producing products like OLED tvs are what drives "advanced manufacturing"? Apparently not since i just had to explain it to you. If japan loses more and more manufacturing then there is nothing to DRIVE improvements in their "advanced manufacturing". Get it? The two go hand in hand...you can't have one without the other for very long.
-3
oginome
No, cars in themselves are not necesarily advanced manufacturing as you correctly identified with your comparison between the two types. The ones that get from a to b are the ones which China make. Give your head a shake.
No, not wrong, Germany's 'prestige' is based on design and cache, Japan's on reliabilty. Hyundai's rise hasn't changed this. That was my original point. And yes, for many people, a car's reliabiltiy is more important that how it looks.
Sorry, OLED. I noticed the mistake as soon as I posted. But yes, OLED is reliant on Japanese high tech for its production. I said producer's goods, which is advanced manufacturing. And no, TVs in themselves are not advanced manufacturing, when any country can make one. Korean TV manufacturers relying on high end technology by Japans for their production doesn't mean the TVs in themselves are advanced manufacturing, oh dear, you don't seem to realise this. The TV manufacturers make the TVs using high end goods and tech bought from Japan, the finished product is dependant on that advanced manufacturing, yes, but from outside the company which made the TVs.
Again, OLED is reliant on Japanese high tech in the first place. Japan hasn't lost more and more manufacturing, there has been competition with Korea in the OLED stakes, but Japan is also pursuing OLED again.
-3
Cat5
Sigh i realize now why JT posters no longer debate with you since you just go in circles with your arguments. Again I pointed out that china, with full support of the government, is copying wholesale the top vehicle manufacturers in the world in a bid to become a premier "exporting" vehicle manufacturer.
BS, have you driven a Porsche? BMW? Have you driven an M5, or any of the M cars? Clearly you don't know what you're talking about. The german car companies earned their 'prestige' through style, handling and other performance characteristics and NOT simply by design and 'cache'. They still dominate the luxury/performance category, in fact they are the benchmark to which all others are compared.
Yes they have that was the point of the OLED article, they were admitting japan was slipping in their ability to complete against their rivals. They admitted they were giving up OLED development. As for them pursuing it again? what? Where did that come from? The OLED article was from January.
Moderator
Cat5 and oginome, please stop bickering. You are just going around in circles. Focus your comemnts on the story and not at each other.
1
gyouza
May be true for mass market, but the BEST cars at the pinnacle are actually British! No joke! Rolls Royce and Bentley build cars that are crafted, not mass produced.
Great argument except that these too, are actually German being owned by BMW and VW respectively!
0
VicMOsaka
I don't know how the writer thinks that Korean TV's are better than Japanese ones. When I browse the electrical shops, I play a little game of looking at all the TV's, not looking at the brands and picking ones with the best pictures. No.1 Sharp. Other Japanese TV's really good but overseas brands although good could not quite compare. I tell you-- Japan makes some good stuff. Just look at the latest LED computers, Fujitsu, Toshiba, NEC in the stores and compare them to the overseas brands.
As for other Japanese items like washing machines and refrigerators- show me who makes better ones. I would have a German car if someone gave me one, then I would sell it and buy a Japanese one. As an ex car mechanic and car exporter, I have found European cars in general not so reliable, don't wear so well and repairs are incredibly expensive not only in Japan but in any country where they are sold.
0
The_True
@gyouza the only problem, that most of those British Company are own by German now.
-1
The_True
Hey Vic, smart guy! dont you know that in Electronic shops, you can just change the setting to make one better than the other, that is a trick i learn 20 years ago in NY when the shop get some money to from the Manufacture when they want to get a model out the door quick.
so do you think that japanese are not doing that to the Korean manufactures? Remember we are in japan!
0
gyouza
@The_True
Yep, but I think I said that?
0
choiwaruoyaji
I like the way that young people, especially young people in Tokyo, are not interested in buying cars these days.
It doesn't matter if it is a German car, a Japanese car, a Korean car... whatever... it's just not on their agenda.
I think that is kind of cool... completely subversive... undermining all the strategies of these rapacious car makers.
I find people who are into cars to be complete bores... car bores...
I hope the future is one like Tokyo, where most people travel by public transport and bicycle and cars are not necessary.
0
Minoru Kai
If you buy a LCD TV in Japan (on the internet), it's so cheap.
Even it's a 3D TV, it costs only 46,350 yen (approx. $560).
Sony 3D 40inches of Full HD LCD TV "BRAVIA KDL-40EX720"
http://kakaku.com/item/K0000219497/
-1
VicMOsaka
Hey Vic, smart guy! dont you know that in Electronic shops, you can just change the setting to make one better than the other, that is a trick i learn 20 years ago in NY when the shop get some money to from the Manufacture when they want to get a model out the door quick. so do you think that japanese are not doing that to the Korean manufactures? Remember we are in japan.
From smart Vic. Yeah, they have little men in white coats running around adjusting all the TV,s and computers so that they look better than overseas models. All the shops in Japan must be doing it because they all look the same. I have actually bought Samsung products in the past and I was quite happy with them. I also own an HP computer but it can't compare with our other Fujitsu computer. When you say " remember we are in Japan " I presume that you believe Japanese to be devious. Sounds like you were the devious one. As a westerner, I would rather trust them over here. By the way, I know how to make my TV picture awful as well, just adjust the TV settings.
1
gyouza
I don't think the old people are especially interested either (in Tokyo). You really don't need a car in Tokyo, as public transport is so good, and if you miss the last train, sing until the first train in a karaoke bar or just sit chatting in a pub.
The only exception are the 30 yr old bracket who need a car to demo their status by buying a BMW or Merc.
Outside of Tokyo people are probably more practical, choosing to buy a car from a dealer nearby, most likely domestic, so repairs etc are easy to effect.
0
JapanGal
Is Peter an engineer?
I would never comment about the quality of a car, as I am not qualified. I can comment about the looks of a car and the looks of a tv, but not the quality.
1
The_True
CPU: Intel. HDD: Western Digital, Seagate and if is a Japanese manufacture maybe Hitachi or Toshiba. GPU: AMD (ATI), Nvidia or Intel Build in GPU. MB: FOXCON or other Chinese OEM. RAM: Samsung or other OEM. and the OS is Windows.
now, HP use the same OEM provider, so i guess you paid for the Fujitsu name? wow!!
ask the people who get screw from Olympus, AIJ and many other.
boy look like you been in japan not too long and not yet been burn.
3
wipeout
You have to carefully cherry-pick the electronic products (and firms) to conclude that Korea is going to surpass Japan. The only example given for this field was a television, where indeed the Koreans do well and produce fine products.
But the writer seems to mix up two ideas that are not actually interchangeable: "electronics corporations", and "electronics", by which he seems to specifically mean consumer electronics.
If you want to reduce the equation to Sony vs. Samsung, most people's favourite faceoff, you can score a few points for Samsung and that's great. But that's not the field. If I try to list all the Japanese electronics firms I can think of, I know for sure I'll miss out some important ones - companies that make very, very good products. Even allowing for the fact that some are now defunct (yes, I know which ones), or have been folded into other companies, it's a damned long list (the order is entirely random):
Sanyo, Kyocera, Sharp, NEC, Fujitsu, Hitachi, Aiwa, Akai, Onkyo, Casio, Sega, Toshiba, Victor, Denon, Marantz, Technics, Yamaha, Epson, Pioneer, Buffalo, Pentax, Nikon, Olympus, Canon...
Most of these are giants, but there are others that occupied smaller niches in the electronics world, and still made highly regarded products - Audio Technica, Nakamichi, who made some of the best regarded cassetted decks, Micro Seiki (turntables), Vestax (turntables/DJ gear).
Now if you consider the Korean competitors to all these companies, it's easy to name the companies cited by the author, but can you name any others? At all? In terms of world recognition, for most of us it's still just LG and Samsung for consumer electronics, Daewoo (now gone), and Hyundai for cars. If the question you have to ask when you get your next Korean electronic device is "Should I get the LG, or the Samsung?", then you're not being given the kind of choice you have with Japanese electronics.
I'm going to make the following guess about all of you, living in or out of Japan (and some of it may be wrong for some of you, but I know it will be broadly true):
Your computer printer isn't Korean. Your game console isn't Korean. Your calculator isn't Korean. Your headphones aren't Korean. Your turntable isn't Korean. Your camera isn't Korean. Your video camera isn't Korean. Your watch isn't Korean. If you have audio separates, your amplifier isn't Korean. If you play a digital keyboard or synthesizer, it isn't Korean. Your loudspeakers aren't Korean. Your rice cooker isn't Korean. Your breadmaker isn't Korean. etc.
Now run down the list again and tick off the ones you own that are Japanese.
Was there a difference?
0
Dennis Bauer
I am not a big fan of german cars, but this is a load of bull
0
Zenpun
Japan is losing the export competitiveness not because of the design and innovation. One major factor is high value of Yen and input cost. On the contrary, German industry is enjoying being a member of Europe. If Germany is still using the Mark as currency, German export will not be competitive like right now. In Europe, Germany is the Champion of the manufacturing. Being a member they got more marekt share without protection. Using euro makes German made goods cheaper to buy then before. Japan has no luxury like Germany. Japanese designs are cute, good looking and reliable. They marketed Low and Medium end markets. German cars are target for high end market which will be minority of buyers.
Toyota is very innovative about designing the hybrid car which counsume less fuel. For the high end market, they manuafactured the Lexus which is relatively luxury. Honda is also very good for turing, crusing and manuvaouring. When the matured economy like Japan can not rely only on design and innovation. They have to expand the market with lower price and higher quality products.
-1
1standgoal
Folks, take a look at this -- it perfectly illustrates Japan's dominance in the semiconductors industry:
http://images.businessweek.com/mz/11/13/1113mz18econsupplychain.pdf
0
adrienne
When a person owns a German made car like Mercedes, people would usually think that the owner is rich because he/she could afford such a luxury car. These German made cars are known for being luxurious and classy and of course expensive. But they aren't reliable and not reasonably priced. On the other hand, Japanese made cars are known for producing cars which are realible, efficient and price value. I don't know what happened now. They are overpowered by the Germans by just its image not its quality. But I still believe in them, so if you're looking for quality Japanese or German made car parts check http://www.partstrain.com.
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