Toshiba investing in local presence, aiming to double market share by 2014

- Monday, June 20, 2011

Toshiba investing in local presence, aiming to double market share by 2014

Japanese electronics firm Toshiba is upping its game in Latin America, installing new offices and studying potential locations for local manufacturing, a strategy the company hopes will enable it to double its PC market share by 2014, Edgar González, general director for Toshiba's computing systems division in Latin America, told BNamericas.

Toshiba currently has a PC market share of around 11%, according to the executive.

Up until now the company has been working mainly through partners in the region with offices only in Mexico and Brazil. But to compete with the likes of Samsung and LG, the firm realizes it needs a closer relationship with the customer.

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"We decided that we need to be closer to the market, to show countries that we trust in them, that we're prepared to invest, that we're in for the long haul, that we're not just an opportunistic company and could up stakes and go at any moment. We decided in April to start opening local Toshiba offices in Latin America," González said.

In recent months, Toshiba has opened offices in Chile, Peru and Colombia and has more planned, as well as an aggressive recruitment program. It is also looking for technical support partners.

González, who is currently based in Mexico City, will move next month to Toshiba's US headquarters in California to direct Latin American operations.

The executive that the new setup would mean Toshiba is focusing on particular products for each market.

LOCAL MANUFACTURING

Toshiba knows that to be competitive in a highly price sensitive market like Latin America, it needs to manufacture locally. Unfortunately, the two largest markets in South America - Argentina and Brazil, where local manufacturing could be justified - have complex tax and licensing regimes in place.

In Argentina, the tax break system pretty much obliges foreign companies to manufacture in Tierra del Fuego. González is confident the company will soon start to manufacture TVs there, but it has not yet decided whether it will manufacture laptops, netbooks and tablets locally.

"If you want to import computers to Argentina, you need to get a special import license; it's not automatic. And with that, the government can control the flow of foreign exchange and imports," González said. And the risk of not getting the import license causes uncertainty for PC manufacturers like Toshiba.

"You can't have inventory and be waiting to see if they give you the license or not. That is a huge risk," González said. "We have to look at scenarios, and one of those is manufacturing PCs."

The company is biding its time for the moment in the hope that regulations regarding import license might change with a new government. Argentina is due to go to the polls in October.

In Brazil, Toshiba has an agreement with local company Semp to produce televisions.

Semp Toshiba was one of 12 companies to register in May to produce tablets in Brazil and be exempt from the PIS and Cofins welfare taxes.

González declined from commenting on that development, only saying that he was unaware of any immediate plans for Toshiba itself to produce tablets in Brazil.