End of an Era, Onkyo Halts Production of Loudspeakers in Japan

<January 22, 2012> On Thursday, the Nikkei said it had learned that Onkyo Corporation has decided to cease production of loudspeaker systems in Japan. This decision ends several decades of domestic production of a product category in which Onkyo not only had a great reputation for quality, but also leading market share.

Although it is not well known here in the U.S., Onkyo has for many years in Japan enjoyed a strong reputation for their outstanding loudspeaker technology and often held top market share in domestic loudspeaker system sales. The company also sells speaker components on a large scale OEM-basis for installation in automotive, computer and other applications.

Originally, all Onkyo loudspeaker systems and components were manufactured in Japan. However, several years ago, the company began diversifying their production by opening facilities in Malaysia and China. About a third of their loudspeaker production remained in Japan at a facility in the Mie Prefecture.

According to the Nikkei report, the company will move the production from the Mie facility to one or more of its overseas facilities. The factory in Mie will shift to producing other products such as LED lighting.

Onkyo believes that it will be able to reduce its speaker product costs by between 10-30% with this move. The Nikkei suggested that with the falling prices of PCs and TVs, Onkyo’s speaker business “is likely bleeding red ink on the deteriorating profitability of speakers supplied as components for these items.”