Apparently South Korea’s exports of appliances to other countries are expected to be halved this year compared to those of last year.
No, not because they keep on rattling themselves to bits, exploding or going on fire but largely because that appliance manufacturers are moving their production facilities overseas.
According to the data from Korea Electronics Association (KEA) on October 10, exports of major domestic home appliances, such as fridges, washing machines and TVs to other countries increased to £2.9 billion in 2014 from £2.5 billion in 2011, but then decreased to £2.4 billion last year.
The figure is expected to drop dramatically to become as little as £1 billion to £1.4 billion this year.
Reportedly the rapid drop in exports of Korean produced appliances is because appliances makers are moving their large plants overseas due to the nation’s strict regulations and rigidity of employment as well as high labor costs.
In the early 2000’s, we hear tell that some were relocating their factories to China.
Now, they are beating a path into Vietnam on account of the rise in labor costs in China and various regulatory problems. Which will be why we’ve started to see the like of Samsung ovens being labelled as “Made In Thailand”.
In Korea, market experts say that the government should come up with measures to prevent the businesses of their partner companies from dwindling and the hollowing out of the domestic manufacturing industry.
It is quite funny in a strange way that what were once producers that were greatly feared by the traditional incumbent manufacturers are being forced to slash costs to compete in a market that they wanted to dominate, pretty much by being cheaper than everyone else.
The race to the bottom continues. We don’t expect there to be a winner.
