TTE vows to become TV industry leader
By Chang Tianle and Zhan Lisheng (China Daily)
Updated: 2004-07-30 08:36

The world's biggest TV manufacturer TTE Corporation says it will achieve profitability in the next 18 months in North American and European markets.

The corporation indicated it not only wants to be the biggest, but is also striving to be the strongest.

At yesterday's opening ceremony of TTE, a joint venture between China's TCL International Holdings Limited and French consumer electronics group Thomson, Tomson Li, chairman of TCL and TTE, said: "We want to be the undisputed leader of the industry."

Last November, TCL, China's leading TV and cellphone maker, agreed to merge its TV business with loss-making Thomson's TV business, establishing the largest TV manufacturer in the world.

Hong Kong-listed TCL International Holdings, a company of the TCL Group, holds 67 per cent of the 430 million euro new venture. Thomson takes the remaining 33 per cent.

Li said this was a significant decision in TCL's globalization strategy, indicating that Chinese companies are going global after 20 years of growth and efforts, and are capable of competing in mainstream industries at an international level.

Thomson's RCA and Thomson brands, which enjoy a 11 and 8 per cent market share in North America and Europe, will enable TCL to penetrate Western markets without building new production capabilities and brands.

The new Shenzhen-based joint venture now owns 10 TV plants and five research and development (R&D) centers around the world, which sold 18.5 million TV units last year and generated a revenue of 30 billion euros.

Charles Zhao, chief executive officer of TTE, said the new venture is expected to produce 20 million TV sets and generate a revenue of US$4 billion this year. It aims to increase its market share in North America and Europe and reach a global sales volume of 30 million units in the next two to three years.

Thomson's TV and DVD business was reported to have lost 120 million euros last year, while TCL's TV unit gained a profit of 530 million yuan (US$64 million) domestically and 81 million yuan (US$8.78 million) overseas.

TTE wants to turn its North American and European sectors into profitability in the next 18 months.

Although TTE executives admit that this goal will not be easy to achieve, they said they believed the synergy of the merger will benefit the company in the long term.

"Through scale economy, cost control, shared R&D capacities, lowered sourcing cost, our management team has full confidence," said Zhao.

What's more, manufacturing bases in Europe and Latin America will help TCL to break anti-dumping barriers set by many countries on Chinese products, Li said.

Globalization and the coming of the digital era provide great opportunities for the Chinese companies to grow faster than ever, as well as to co-operate with multinationals worldwide.

TCL group aims to join the world's 500 biggest companies by 2010 with an annual revenue of 150 billion yuan (US$18.1 billion).

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