With Sharp Corp. increasing its chances of making turnaround under the sponsorship of Taiwan’s Hon Hai Precision Industry Co., another troubled Japanese electronics manufacturer, Toshiba Corp., is now seen as more likely to sell its white goods business to a foreign rival.
Innovation Network Corp. of Japan, a government-backed investment fund which is seen losing out in the bidding for Sharp to Hon Hai, has been planning to integrate the white goods operations between Sharp and Toshiba.
The INCJ plan appears to reflect the eagerness of the industry ministry, which oversees the turnaround assistance fund, to promote a realignment in the domestic consumer electronics industry under the initiative of “Japan Inc.”
“There are too many domestic home electronics makers,” a senior ministry official has said.
But the envisioned integration now seems unlikely to be realized, against a backdrop of the Taiwanese maker’s lead in the bailout talks with Sharp. Toshiba President Masashi Muromachi said on Thursday, “It’s an option to sell (the firm’s white goods unit) to an overseas maker.”
In the first place, there were doubts about the effectiveness of a merger of white goods operations between the two ailing Japanese makers. “It would end up being an alliance of the weak,” an industry observer said.
Even a Toshiba executive questioned the idea, saying, “There are too many overlapping operations.”
Other domestic makers, including Hitachi Ltd., have been reluctant to take over Toshiba’s white goods division.
The production of white goods, which spearheaded the economy’s rapid growth decades ago, is falling as Japanese makers struggle to cope with global competition and the shrinking domestic market on the back of the nation’s declining population.
In 2012, China’s Haier Group purchased the refrigerator and washing machine businesses of Sanyo Electric Co., a Panasonic Corp. subsidiary. With development bases in Kyoto Prefecture and Saitama Prefecture, the Chinese maker now releases products under the Aqua brand, which it took over from Sanyo.
In 2014, Haier’s sales in Japan totaled some ¥50 billion. Its products, including refrigerators with liquid crystal display panels and featuring designs from the popular movie series “Star Wars,” are attaining considerable popularity in Japan.