To strengthen price competitiveness, Matsushita Electric is planning to move its DVD (digital video disc) player manufacturing facilities to China. At the moment all of Matsushita’s low-end DVD players are being produced at factories in Kadoma and Fukujima. The going price for a DVD player is dropping fast in Japan – some models can be bought for as little as 10,000 yen. With competition intensifying, Matsushita has decided to transfer DVD player production to its joint venture in Dalien – China Hualu Matsushita AVC (CHMAVC). Established in 1994, CHMAVC produces 50,000 DVD players a month, most of which are sent to customers in North America.

In fiscal year 2000 (Apr. 2000 – Mar. 2001), Japan’s domestic market created demand for 950,000 DVD players with Matsushita taking 25% of the market. In fiscal year 2001 domestic demand is expected to climb to 1.78 million units. With low-cost models imported from China, Matsushita hopes to keep all of its current market share.