‘Made In China’ Now On The Nose As Brands Spend Billions To Get Out
Consumer Technology Companies are moving to dump China as a manufacturing base instead they are choosing Vietnam, due to politics, rising costs and the risks associated with having products stamped Made In China.
The latest is LG Display who plans to expand manufacturing facilities of organic light-emitting diode displays (OLED) in Vietnam, also giving China a miss is German Company Porsche who believe that Made In Germany is going to ring the cash registers more so than Manufactured In China.
Porsche recently ruled out building a factory in China, its largest and most profitable market, despite struggling to ship enough German-made sports cars to meet a surge in Asian demand at the end of last year.
“It is a quality and a premium argument still to produce from Europe for China,” chief executive Oliver Blume told the Financial Times. “Today it doesn’t make any sense [to move production].”
Blume said it was worth absorbing higher costs for the cachet of the “Made in Germany” brand which he believes is more valuable with their premium customers than a Manufactured In China Sticker.
LG is set to invest A$1 Billion for its new Vietnam operation which will result in Australians being able to buy LG OLED display products in entry level premium market TV’s as well as OLED desktop monitors.
The move is also tipped to lower the cost of OLED TV’s in Australia leading to a new battle between Samsung and LG in the Australian premium TV market.
The South Koreans latest capital infusion into Vietnam manufacturing brings their accumulated investment in the communist country to close to A$5 Billion dollars.
While premium products will still come out of South Korea, Vietnam is now a major production centre for LG Display, which uses the country to make OLEDs for TVs, plastic OLED screens for mobile phones and some liquid-crystal displays.
Also manufacturing in Vietnam is Samsung who are investing billions into new smartphone and TV plants at the same time PC manufacturers are moving to Vietnam, Thailand and Malaysia with components sourced from Taiwan.
The new LG Display’s facilities will be the largest foreign-invested project in Hai Phong.
The local government says on its website that it will create 5,000 jobs, with construction to take place from March to May.
Vietnam has attracted investors shifting from China because of rising costs there and trade risks, and this influx is continuing during the global boom in electronics purchases amid the coronavirus pandemic claim observers.
Vietnam’s electronics exports jumped 56% between January and November 2020, according to the General Statistics Office, as Australian USA and European consumers were stuck at home amid COVID-19 lockdowns.