Formation of the joint venture and close collaboration with TCL will allow Toshiba to make effective use of TCL's extensive sales and marketing organization, nationwide sales channels and market expertise, building upon its current base of production and sales and marketing network of China. Toshiba believes that the tie-up with TCL will make possible more effective promotion of Toshiba-brand TVs in China and reinforce the presence of its visual products business in China.
Consumer spending in China remains buoyant. The market for LCD TVs is expected to grow by 190% in the period from FY2009 to FY2012, and forecasts indicate it will become the world's largest TV market in this fiscal year. Expansion is expected to be particularly brisk in inland urban areas, where estimates point to 220 percent growth. Through the JV, Toshiba will be able to expand its business activities in addition to the major marketing zones of the coastal region to reach the medium-sized cities of China's huge hinterland.
In its operations, Toshiba Visual Products (China) will respond to the needs and characteristics of the Chinese market. Alongside mass merchandise stores, where Toshiba already has a presence, it will cultivate ties with smaller retailers and individual stores throughout the country. The company aims to establish a nationwide network of more than 10,000 stores by FY2012. The product line-up will also be expanded and geared to local tastes, and Toshiba will work with TCL to meet the requirements of customers living in middle-sized cities.
Toshiba Visual Products (China) will be headed by a locally appointed president, and will seek to combine the best of Chinese and Japanese management practices in an optimum management style.
Toshiba will reinforce its ability to supply products to the Chinese market from Dalian Toshiba Television Co., Ltd., its production facility in China, by adding TCL as a supplier.
Toshiba's TV strategy, embodied in its popular REGZA brand, is based on using its own semiconductors and software. In FY2009, Toshiba achieved sales of some 10 million units worldwide. In emerging countries, including China, Toshiba will proactively promote products tailored to user needs and carry out marketing activities closely tied with local communities. In the current fiscal year, the company aims for worldwide sales of 15 million units, an achievement that will further enhance its presence and branding in the global market.
Toshiba and TCL have been working together in the past for the development of China Blue High-definition Disc (CBHD) players, an HD storage format based on Toshiba's HD-DVD technology.