Although Mitsubishi Electric Corporation doesn’t sell large appliances in the UK it is interesting that it plans to terminate its washing machine business, which started in 1956.
Production will be terminated in October 2008, with marketing slated for termination as soon as it runs out of inventory of existing models on the market, most likely within 2008. Mitsubishi will continue servicing its products.
The company’s laundry machine segment shipped roughly 370,000 units and logged about ¥11.6 billion (approx US$111 million) sales in fiscal 2007. Although profits and losses were not revealed, the business reportedly continued to log a loss for the last two to three years.
In the Japanese white home appliances market, demand for luxury models is strengthening amid the overall market’s slowdown. To secure a profit in the washing machine market, it has become essential to gain a larger share with drum and upright type washer/dryers.
Mitsubishi also launched its first drum type washing machine in May 2007. As it lagged behind its rivals in entering the segment, Mitsubishi attempted to gain customers by employing a new mechanism that tilts the drum.
However, the company had to stop selling the “Moving Drum” washer/drier after only three months due to multiple defects. Mitsubishi considered introducing a successor to the product after solving the quality problems, but finally decided to withdraw from the washing machine business based on the conclusion that reviving the business would be difficult.
Approximately 120 employees are engaged in Mitsubishi’s washing machine business. The company is planning to relocate them to its plastic recycling business and the air conditioning and cold energy systems business including refrigerator/freezer showcases.
It is however interesting that GE are seemingly to exit from the appliance business and now Mitsubishi are following suit with, seemingly, no plans to sell the business. But we have to wonder, will more follow?