Source: Yicai Global Dec. 9

Panasonic plans to build a new kitchen appliance factory in China to act as a global production hub as the Japanese electronics giant remains optimistic about the sector despite a rise in competition.

Panasonic Kitchen Appliance Technology Jiaxing, a subsidiary under the Osaka-based firm, will build the facility in Zhejiang province, news site The Paper reported yesterday. The first phase of the plant will cost around USD40 million and is scheduled to enter operations in September 2021.

Competition in the home appliance market has been increasing in recent years, but Panasonic's confidence for growth in China remains undiminished, said Tetsuro Homma, president of Panasonic's China and Northeast Asia unit. The firm began investing in Zhejiang's capital Hangzhou in 1994 and sited the new factory close to the borders of Jiangsu province and Shanghai municipality to show strong support for China's plans in the Yangtze River Delta region, he added.

The firm has broader plans to expand China sales by 40 percent over the next two years, Homma said, adding that its next step will be to shore up its elderly care business by bringing in more sector-related products. The company already runs a retirement community in Yixing, Jiangsu, with 5,500 households.

Panasonic made CNY120 billion (USD17 billion) in sales in China last year, and has a workforce of 60,000 employees, including 8,000 researchers, Homma continued. It intends to add smart toilet seats, air purifiers and air conditioners to its product range to spur growth, he added.

The company is renowned as being the chief battery supplier for electric carmaker Tesla, which opened its first overseas factory in Shanghai this year, but has not been making cells for the EV giant's China-made vehicles.

Panasonic is open to using its three China cell factories to supply for Tesla, Homma said, adding that its JPY200 billion (USD1.8 billion) facility in Dalian dedicated to making EV batteries would likely have the capacity to produce for Tesla if they struck an agreement in China. The firm may also consider building a new plant if such a deal was agreed and Tesla's requirements were especially high, he said.