GE, Toshiba Ally to Sell Appliances to Japanese : Pacific Rim: The venture hopes to take advantage of changing lifestyles that are increasing demands for time-saving products.
Banking on changing consumer lifestyles, Toshiba Corp. and General Electric announced Friday a major alliance to sell refrigerators and other appliances to the Japanese in what is believed to be the first significant attempt to market American consumer appliances in Japan.
Should the alliance succeed, it could help restore the luster of the American consumer brand image, which generally suffers from a reputation for poor quality and even worse after-sales service in Japan.
“So many Japanese know that American car quality is not as good as Japanese, so if you try to sell a car, it’s really difficult,” said Ted Kadoya, spokesman for Toshiba America Inc. “But for large-scale refrigerators, washers and dishwashers, we Japanese have no product. So there is no competition and no prejudice.”
The venture aims to capitalize on the changing Japanese woman’s lifestyle. The majority of Japanese women work outside the home, fueling demand for time-saving appliances. The larger American products, once rejected as impractical for the Japanese market, are in growing demand because they eliminate the need to shop and wash everyday, Kadoya said.
Last year, he said, demand for large refrigerators topped 1 million units, compared to 100,000 just four years earlier. That niche was the fastest-growing segment of the Japanese appliance market. Yet, Kadoya said, Toshiba lacked the technology or know-how to produce large-capacity appliances.
Enter GE. The firm’s Kentucky-based appliance subsidiary was projecting that sales growth in the U.S. market would slow considerably during the 1990s. So it decided to look overseas, said GE spokesman James Allen. Although GE, Whirlpool and Sears, Roebuck & Co. have tried to export to Japan on a small scale, Allen said GE turned to Toshiba to greatly expand its presence, as well as exchange technology.
The two appliance giants will form a $3.5-million joint venture in Tokyo to market GE products in Japan and another in Singapore to focus on the rest of Asia.
Toshiba will distribute the GE products in its 40,000 stores throughout Japan.
Toshiba will also assume responsibility for the all-important after-sales service.
A recent Japanese consumer report showed that 52% of consumers who purchased a foreign-manufactured product needed after-sales service, but 62.3% were dissatisfied with the service they received.
Kadoya said the two partners hope to increase market share of large-scale refrigerators in Japan to 5% of the total refrigerator market from the current 1%. They also hope to triple sales to $50 million in 1994 from $15 million this year.
