Rumors of Panasonic compressors exiting the Chinese market are both regrettable and alarming. Over the years, Panasonic's market share and competitiveness in the core component of air conditioning compressors have sharply declined. The decision to stay or leave is no longer in the hands of the company but dictated by the market. Sustaining a loss-making business with no future prospects is unsustainable.
By Sun Li
Recently, Benma Teruo, the Global Vice President of Panasonic Corporation and head of Panasonic's China business, publicly shared a statement from Panasonic Wanbao (Guangzhou) Compressor Co., Ltd., refuting claims of Panasonic exiting China and vowing to combat any malicious spreading of rumors that harm the company's reputation.
Subsequently, public records show that since the end of 2023 until April this year, rumors have circulated on various social media platforms about Panasonic compressors withdrawing from the Chinese market and fully returning to the Japanese market. Alongside this news is the relocation of high-end air conditioner production by Panasonic Air Conditioning back to Japan.
However, behind these rumors lies Panasonic's own strategic adjustments, causing confusion among the Chinese market and customers. Reports from Japanese financial media Nikkei News revealed that in 2023, Panasonic relocated its high-end air conditioner production lines back to Japan, followed by news of Panasonic Air Conditioning in China becoming a factory for low-end air conditioners, including Xiaomi air conditioners. This shift led industry participants to believe that Panasonic Air Conditioning would exit the mainstream Chinese market competition and transition into an OEM factory for Chinese air conditioning companies.
Subsequently, various social media platforms and even within the air conditioning industry, rumors emerged about Panasonic compressors, a core component for Panasonic Air Conditioning, being withdrawn. Among the speculations, the most prominent is Panasonic's search for a buyer for its compressor business, with AUX being a likely candidate.
In November 2023, Panasonic Compressor's operating entity in China, Panasonic Wanbao (Guangzhou) Compressor Co., Ltd., signed a cooperation agreement with AUX Air Conditioning Co., Ltd., focusing on compressor collaboration. Behind this move is AUX Group's investment of over 2.2 billion yuan in Anhui Ma'anshan to establish a compressor factory, with Panasonic providing the necessary technology licenses.
This initiative is seen as the beginning of AUX's integrated industrial chain layout. It is also speculated that Panasonic compressors may transfer production lines, equipment, and technology assets to Chinese home appliance companies. Industry insiders previously disclosed to the home appliance industry that Panasonic's collaboration with AUX Group may lead to compressors produced by AUX bearing the Panasonic brand, achieving integrated output of Panasonic compressor technology and brand.
Regarding these market actions and public rumors, Panasonic compressors stated: "As a responsible company, we deeply understand the importance and potential of the Chinese market. We will continue to increase our investment in the Chinese market, drive technological innovation and product upgrades to meet the growing consumer demands."
However, in the eyes of the home appliance industry, whether Panasonic compressors will continue to deepen their presence in the Chinese market or choose to exit is no longer crucial for the Chinese home appliance industry. Currently, Chinese companies such as Midea, Gree, Changhong, Huayi, and Xibei La have firmly secured the leading position in the global compressor market for air conditioners, refrigerators, and other cooling products.
In essence, even if Panasonic compressors subjectively do not intend to exit the Chinese market, facing strong Chinese companies like Midea and Gree continuously increasing market share, grasping the future technological trends and directions of the compressor industry, intensifying efforts in technological innovation and product iteration, more enterprises and customers may voluntarily abandon Panasonic compressors.
Certainly, not only in the core components of air conditioners and refrigerators like compressors but also in washing machines' core component motors, as well as televisions' core components like display panels and chips, Chinese companies currently possess the capability for independent research, development, production, and manufacturing. They also hold the initiative to lead product and technological innovation and iteration in the future.
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