Japanese consumer electronics makers enjoy relatively high credit ratings in keeping with their edge in the global marketplace, according to a report released Thursday by Moody’s Investors Service.
Those manufacturers, however, need to hone their unique strengths further to resist downward pressure on their earnings being exerted by price competition. The pressure has become particularly acute since 2000, when an increasing number of digital gadgets began hitting the market, the report noted.
While they are expected to create increased added value for their products by providing more attractive content, including music, movies and games, these companies should develop and make core components on their own, and such a practice is already becoming a trend among leading producers of audiovisual equipment, the report noted.
In this context, it is important that manufacturers bolster their financial standings, considering that parts manufacturing is a highly capital-intensive operation and is more vulnerable to erratic price swings than finished products, said Naoki Takahashi, the author of the report.