Weak Yen Spurs Canon To Bring Production Home

[Canon Rumors Guy]

<p>Jan 9 (<a href="http://www.reuters.com/article/2015/01/09/japan-yen-manufacturers-idUSL3N0UO2YB20150109" target="_blank">Reuters</a>) – Canon Inc and other Japanese electronics companies want to bring production of some goods back home, reversing a years-old trend of overseas manufacturing as a rapid decline in the value of the yen makes local goods more competitive.</p>
<p>The yen has tumbled some 8 percent since the Bank of <a class="vglnk" href="http://bit.ly/1svQNRI" rel="nofollow">Japan</a> last eased monetary policy in October and is now trading near seven-year lows. Since late 2012, it has lost a third of its value due to Prime Minister Shinzo Abe’s reflationary economic policies.</p>
<p>The steep slide has raised costs for firms highly dependent on raw material imports as well as those that manufacture abroad.</p>
<p>Now, Canon says it wants domestic production to return to 60 percent of overall output in three years, up from around 40 percent. “From now on, new copier, camera and printer products will be built at domestic factories and as they replace older products, the volume of goods made overseas will fall,” said company spokesman Hirotomo Fujimori.</p>
<p><!--more--></p>
<p>Sharp Corp is also looking at lifting the ratio of LCD televisions and refrigerators made in Japan to counter the yen’s weakness, a spokesman said.</p>
<p>Panasonic Corp has been considering whether to lift domestic production levels for some time. Its white goods division sees a 1.8 billion yen drop in operating income every time the dollar strengthens by one yen, because this division largely produces its goods overseas and sells them in Japan.</p>
<p>No companies, however, have yet to go so far as saying that yen weakness is a big enough factor to justify the large investment needed for new domestic plants or assembly lines.</p>
<p>“Most white goods sold in Japan are imported from <a class="vglnk" href="http://bit.ly/1stXs9q" rel="nofollow">China</a> so it’s natural we could see more goods manufactured in Japan on the back of a weaker yen,” Panasonic CEO Kazuhiro Tsuga said at the Consumer Electronics Show in Las Vegas this week.</p>
<p>“But it’s more of a passive rather than a proactive shift,” he added. (Additional reporting by<a href="http://blogs.reuters.com/search/journalist.php?edition=us&n=ritsuko.ando&">Ritsuko Ando</a>; Writing by <a href="http://blogs.reuters.com/search/journalist.php?edition=us&n=edwina.gibbs&">Edwina Gibbs</a>; Editing by Miral Fahmy)</p>
<p>Seen on: [<a href="http://www.the-digital-picture.com/News/News-Post.aspx?News=14240" target="_blank">The-Digital-Picture</a>] || Image Credit // <a href="http://www.fdtimes.com/2013/11/24/canon-lens-factory/" target="_blank">Film & Digital Times</a></p>
<p><strong><span style="color: #ff0000;">c</span>r</strong></p>

 

[Mt Spokane Photography]

This makes good business sense.

Canon production of Cameras, and likely other products is falling, and they would have to lay off some very experienced Japanese employees who might just move to Tamron and Sigma. Then, shutting down factories is also very expensive.

Moving production back to Japan will keep workers employed, and factories running. I think its a good choice.

Nikon might do well to follow up.

Another big factor is likely the political unrest in Thailand, which threatens production there.

While this is a old article, its certainly a factor in bringing more production home.

http://www.nationmultimedia.com/business/Thai-unrest-has-Japanese-firms-worried-about-futur-30221394.html

 

[Famateur]

Just another reminder that decision-makers at Canon have a lot of things to consider when it comes to research, development, manufacturing and timing of new products.

I wonder if anticipation of production moving back to Japan was/is a factor in delaying introduction of a new sensor architecture. Perhaps they held off knowing that the move was coming and once settled, they'll get to work on what will be the next big thing from Canon in sensors. Or are sensors manufactured in Japan and it's just the bodies that are assembled elsewhere? Even if they are, a big move like this affects everything in some way.

Either way, it's a good reminder that "marketing" isn't making all the decisions, as people often reference when disappointed with current cameras...

 

[bmwzimmer]

The weaker Yen is probably the prices of new 7Dii/16-35/100-400 lenses have been lower than expected. I hope the next wave of new FF cameras follow this trend.

 

[unfocused]

The weaker Yen is probably the prices of new 7Dii/16-35/100-400 lenses have been lower than expected. I hope the next wave of new FF cameras follow this trend.

I don't think it is that simple.

 

[Mt Spokane Photography]

Just another reminder that decision-makers at Canon have a lot of things to consider when it comes to research, development, manufacturing and timing of new products.

I wonder if anticipation of production moving back to Japan was/is a factor in delaying introduction of a new sensor architecture. Perhaps they held off knowing that the move was coming and once settled, they'll get to work on what will be the next big thing from Canon in sensors. Or are sensors manufactured in Japan and it's just the bodies that are assembled elsewhere? Even if they are, a big move like this affects everything in some way.

Either way, it's a good reminder that "marketing" isn't making all the decisions, as people often reference when disappointed with current cameras...

I don't think that introducing high end cameras is influenced by this, they are already made in Japan. I also doubt if the Taiwan production will be shut down. Thailand is probably going to get a big hit. First the flooding, then civil unrest, its a huge risk already.

Canon makes Printers in Thailand, and Some Point and shoot and consumer lenses in Taiwan, There is or was a plant in Malaysia as well. Then Canon batteries are assembled in China from cells made in Japan, and there are bits and pieces made all over the world.

Canon makes APS-C and FF Sensors in Japan, buys smaller ones from Sony, buys P&S lenses on the commodity market for low end P&S, buys LCD rear displays from Sony, 60% of their stuff now come from out of Japan. A lot of the items were offloaded after the Fukishima Earthquake.

 

[ScottyP]

This decision will appear very short sighted the first time Godzilla rampages through a production facility.

 

[Wizardly]

The weaker Yen is probably the prices of new 7Dii/16-35/100-400 lenses have been lower than expected. I hope the next wave of new FF cameras follow this trend.

I don't think it is that simple.

Oh it is that simple, it is just not going to happen - at least not for DSLR systems. Canon is more likely to take advantage of the favorable exchange rate and increase profits from US sales. Canon remains among the most profitable of camera system manufacturing companies and with relatively stable ILC sales at current prices there is not much of a driver to reducing the price points.

You might see lower prices on imports from Japan on Ebay from private sellers if you're willing to haggle.

 

[Mt Spokane Photography]

The weaker Yen is probably the prices of new 7Dii/16-35/100-400 lenses have been lower than expected. I hope the next wave of new FF cameras follow this trend.

I don't think it is that simple.

While there are lots of details involved, from a high level, exchange rates are a huge factor in price increases or drops. Canon, like many companies sells cameras to foreign distributors in their native currency (YEN). The US dollar and to some extent, the Canadian dollar have become very strong against most other currencies. That means that US buyers can import items for a much lower price in US dollars.

Gray market sellers of Canon gear have jumped on this and buy equipment from dealers around the world at greatly reduced prices, and sell them on ebay.

This puts pressure on Canon to drop their US prices. There is a gap in value between the US Dollar and Canadian dollar that lets US buyers save on purchases from Canada in many cases as well.