Canon viewfinder shows steady growth

China Daily | Updated: 2008-04-01 07:46

Canon faces uncertainties this year despite sales of $1 billion in 2007, up 30 percent on the previous year.

The global economic slowdown and rising costs could eat into profits at a time when Chinese consumers have more purchasing power than ever and the Olympic Games is expected to spur a buying spree.

Hideki Ozawa, president and CEO of Canon China, spoke to China Daily reporter Wang Xu about the Chinese market and how the company plans to maintain its growth momentum in 2008.

Q: Last October, Canon reported its first quarterly profit decline in two years due to the appreciation of the yen. The renminbi exchange rate is also climbing. Will this affect Canon China's profits?

A: The influence of the yen's appreciation will be more obvious in 2008. Most recently, the yen's exchange rate versus the dollar has reached 90. The situation is serious. Actually, almost all the Asian currencies are appreciating compared with the dollar, including the renminbi.

As for China, the good thing is the economy is still likely to maintain brisk growth. The central government expects the economy to grow by 8 percent. Most people agree it will be around 10 percent. So the market momentum will still be there and would help us deal with negative impact.

Q: China's economy is facing uncertainties due to the US subprime crisis. How will that impact Canon China and how will you deal with these new developments?

A: The subprime crunch is now a challenge for the world economy. The economic slowdown of Japan, the US and Europe is likely to affect China's exports. China's export growth slowed to 6.5 percent in February, compared with 20 percent-plus previously.

The slowdown's impact on the Chinese economy is likely to show up in the second half of the year. I am very concerned about that.

Although it is a difficult time for the Chinese economy this year, there are still a number of positive factors. First, China has the Olympics this year. Meanwhile, the rising wage levels will increase the purchasing power of local residents and domestic consumption as well. This would help counterbalance the negatives. So far, our business has not been impacted by the negative factors. We are seeing very strong sales growth for our digital cameras, printers and so on.

It's really difficult to predict how things will turn out this year, given all the positive and negative factors. We will strengthen our marketing and sales efforts this year and manage to meet our sales growth target of more than 30 percent this year.

Q: Will Canon launch more new products this year to take advantage of opportunities presented by the Olympics?

A: Canon usually launches about 100 new models each year, including printers, digital cameras and so on. The new products are expected to meet the demand of consumers, rather than anything else. For example, one of the printers we are launching has adopted the paint usually used for pianos. The design is expected to create a feeling of luxury as the printer is targeted at individual users who care more about whether the printer matches their home or office.

Q: In recent years, Canon has launched an increasing number of products for small- and medium-sized businesses. Do you see stronger growth in that market segment?

A: Actually, we call it the SOHO - small office and home office - market. China has more than 32 million small enterprises and there will be even more in the future. SOHO consumers only contribute a small proportion of our business now, but the potential is huge. Actually, the growth rate for our SOHO products is even higher than 30 percent.

Q: What's Canon doing in the area of energy conservation and environmental protection?

A: One of the key visions of Canon is coexistence. Currently more than 70 percent of Canon's sales are from markets outside Japan. So if we can coexist with local residents, we simply cannot sustain our performance.

In China, we've been trying to cut carbon emissions in recent years. Our sales have exceeded $1 billion in the nation. To achieve that, it involves a lot of transportation and logistics efforts.

We are now trying to create a carbon-neutral logistic chain, which will cut carbon dioxide emissions to zero during the transportation process. Meanwhile, all the chemicals used in our products are free of poisonous and harmful elements. And we insist all the materials used in our products should be recyclable. To achieve that, we are also working with vendors on research and development.