Home > Latest News > EXCLUSIVE: Hisense Offers To Take On Toshiba TV Distribution, As The ATO Moves To Investigate A Lack Of Profits

EXCLUSIVE: Hisense Offers To Take On Toshiba TV Distribution, As The ATO Moves To Investigate A Lack Of Profits

Hisense who resorted to buying the Toshiba name because consumers in Europe and the US did not see their brand as a quality TV offering, is now offering to buy and distribute Toshiba branded TV’s immediately via their own subsidiary network.

The move comes after the current manufacturers Vestel, Skyworks and Taiwanese Company Compal told ChannelNews that they had no intention of investing any further in Toshiba branded TV’s after Hisense purchased the rights to the Japanese TV brand name for US$114M despite there being several years left on their current contracts.

According to sources this could impact Powermove who are the current Australian distributor as well as Harvey Norman who have the exclusive rights to the Toshiba TV brand.

We also understand that the Australian operation of Hisense is set to be investigated by the Australian Tax Office (ATO) after we revealed that the Company has only managed to declare a profit of $1.7M on revenues of $100,259,000. In 2015, this profit slipped to $1,449,212 in 2016, despite the Company increasing revenues to $150,689,059.

The move is part of a crack down by the ATO on foreign Companies who trade with JB Hi Fi and Harvey Norman.

In a statement, the ATO said it did “vigorously examine” the tax affairs of multinationals. “The ATO will pursue matters through the courts if necessary to uphold the integrity of Australia’s tax system.”

According to Hisense sources the Chinese Company, who purchased the rights to the Toshiba brand name for the next 40 years, has recently held discussions with Vestel, Skyworks and Taiwanese Company Compal to take over immediate distribution as they fear that a lack of investment by the current manufacturers will hurt the brand going forward.

ChannelNews has also been told that Hisense who was forced to license the Sharp brand name for the US market because of poor sales of Hisense branded TV’s will give up the rights to the Sharp brand and immediately start marketing Toshiba TV’s in the US market.

It’s believed that they will ask Sharp to compensate them for giving up the brand three years short of their five year contract.

Sharp which was acquired by Foxconn late last year, is suing Hisense in the Superior Court of California, San Francisco, formally ending what had been discussions about terminating the license that began last September.

The suit alleges that Hisense “cut corners” on its Sharp-branded LCD TV line in failing to meet “the standards and quality” required under a 5-year license signed in 2015.

Hisense signed the pact in buying Sharp’s Rosarito, Mexico LCD TV assembly plant for $23.7 million. The suit seeks, among other things, a court order barring Hisense from using Sharp’s trademarks.

Among the allegations are that Hisense:
Falsely advertised brightness levels and 4K resolution.
Failed to comply with Underwriter Laboratory standards.
Failed to comply with the Federal Communications Commission’s rules governing electromagnetic interference.
Didn’t price Sharp TVs at a premium to its own brand. The prices of the Sharp sets declined 40% in 2016, while those for Hisense models were unchanged, Sharp said. Hisense sold a line of 28, 32-75-inch Sharp LCD TVs.

According to Hisense management that ChannelNews has spoken to, the Company is “desperate” to make sure that the Toshiba brand is not tarnished and that they can enter the US and European markets with the brand mid-2018.

“Yes we are talking to the current manufacturers. We will buy the TV’s from them and we will be responsible for the brand in the future” an executive said.

A senior Hisense executive confirmed to ChannelNews that the discussions with the current manufacturers had recently taken place and that Hisense wants to take over the marketing and distribution of the brand immediately.

Hisense Australia’s Head of Marketing Andre Iannuzzi who is well known for failing to return phone calls has again refused to comment.

Hisense Australia’s Head of Marketing Andre Iannuzzi seen right.

This is the same executive who called in one Sydney PR Company to pitch for their business and after executives went down to Melbourne failed to call the Company back to tell them how they had done in the pitch.

He is also the same executive who openly bragged about Hisense being the #1 TV brand at the Australian Grand Prix, when ChannelNews checked with GFK it was revealed that they had only been #1 for two weeks early in 2017.

He also denied that Hisense was discounting to get sales.

GFK retail sales data and an investigation of the Chinese Companies financials revealed that Hisense had one of the lowest average selling prices for TV’s. Their financials also revealed a lack of profits from the sale of their TV’s and appliances.

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