Passengers wait for a tram in front of an advertisement for Canon Inc in Hong Kong. The company expects China to overtake Japan and become its third-largest market by 2015. [Photo / Agencies]
The Japanese electronics giant expects to see growth rate of at least 25 percent
SHANGHAI - The Japanese camera and copier maker, Canon Inc, said on Friday that it expects China to overtake Japan and become its third largest market by 2015.
That's as China's surging economic growth creates huge demand for electronic consumer products.
The company also said its earthquake-hit supply chain will be fully restored as soon as next month and that it has no plans to move its Japanese manufacturing facilities to neighboring countries.
Fujin Mitarai, Canon's chairman and chief executive, told China Daily in an interview that the company expects to see average annual growth of between 25 and 30 percent in China during the next five years.
"Last year, China surpassed Japan in terms of GDP, so it's natural that the country will soon overtake Japan to become one of our biggest markets," said Mitarai. He said the robust growth outlook comes mainly from the expansion of Canon's sales network and the company's new businesses, such as healthcare products.
Canon first entered China in 1989 by establishing a joint venture in Dalian, Liaoning province. But the company did not aggressively expand in the country until 2001, when China joined the World Trade Organization. Since then, Canon's business in China has achieved an annual growth rate of around 30 percent.
Mitarai said that China still offers huge growth potential for Canon because the company's sales network is still limited when compared with its businesses in other major markets, such as the United States and Europe.
He said the company plans to increase the number of sales staff in China from the current 2,000 to about 10,000 within the next five years.
Traditionally, the US, Europe and Japan are Canon's top three markets. However, the Asian market, led by countries such as China and India, has been catching up quickly during the past few years.
Hideki Ozawa, president of Canon Asia Group and Canon China, said Asia is becoming the world's new economic center and the engine of the global economy. He said the company aims to boost its revenues in Asian countries to $20 billion by 2015 and revenues from China are expected to provide approximately half of that total.
Canon's net sales grew 11.1 percent to 839 billion yen ($10 billion) in the first quarter of this year, although the earthquake and resulting tsunami that struck northeastern Japan on March 11 has led to a decrease in production activity and consumer spending.
Mitarai said that Canon has cut its annual budget by about 10 percent this year following the earthquake, after 300 of its 3,000 component suppliers were hit by the disaster. "But Canon itself has been little impacted by the earthquake, and I think our supply chain can fully recover by June," he said.
Mitarai also refuted speculation that Canon will move some of its Japanese manufacturing capacity to neighboring countries, because of current power shortages in Japan. Instead he noted that the company will purchase generators for its own use, and diversify its production base to make key parts in Japan.
Only 18 percent of Canon's output, mainly high-end products, is produced in Japan, according to Mitarai.
