Falling demand has inspired a rare gathering of manufacturers and distributors of audiovisual equipment and home appliances, who are investing billions to boost sales. The executives of leading suppliers are seen here at yesterday’s launch of PowerBuy Exp

Most business players are quite optimistic about improved consumer confidence and higher spending during the rest of the year following the Bank of Thailand's reduction of interest rates by 50 basis points last week. The move is expected to simulate private investment and consumer spending, which will encourage higher growth in real estate, automobiles and electrical appliances.

The lower interest rate will also stimulate demand for instalment loans, especially for electronic goods.

"We have set our target to grow by 8 per cent, the same growth as last year," said Hiroyuki Muto, director for sales and marketing, Panasonic Siew Sales (Thailand). This is higher than the overall expected growth rate of 5 to 6 per cent for audiovisual products.

Muto added that the audiovisual market at the beginning of the company's fiscal year (April) was stagnant, following negative factors such as the economic downturn and the uncertain political situation, which resulted in lower consumer confidence and reduced spending power.

Muto said the recent reduction in interest rates would help the market become more active during the rest of the year.

"However, I am quite concerned about unexpected happenings and uncertainties, such as whether the national election scheduled for December will be delayed," he said.

He said Panasonic would launch 20 new models of digital still and video cameras this year, together with 10 new LCD and plasma TV models.

"The LCD and plasma TVs are now more affordable for local consumers, as their prices have dropped continuously over the past three years," said Muto, adding that prices had declined by almost 40 per cent last year.

Panasonic will introduce a full line-up of its plasma TVs, from 42 inches through to 103 inches, the world's largest.

He said Panasonic was already the No 1 in the conventional flat-screen TV market. It now seeks to rise from second to first place in plasma and LCD TVs.

Chatchai Santatianant, general manager for consumer electronics at Thai Samsung Electronics, said Samsung expected growth of between 10 per cent and 20 per cent this year, thanks to the success of its global strategy in shifting merchandise to the premium market.

"Consumers in this premium segment have felt less impact from the economic downturn. They also make buying decisions based on emotional factors concerning brand name, product design and technology," he said.

Chatchai added that many customers had upgraded their ordinary television sets to LCD and plasma TVs.

"We are quite confident that the market will be better if the local political situation in Thailand is settled, following new national elections," he said.

Toshiba Thailand chairperson Kobkarn Wattanavrangkul said the company's sales had grown by almost 10 per cent in the first quarter, higher than the overall electrical-appliance market where expected growth is between 5 and 7 per cent over the period. Toshiba's growth was driven by IT products, including notebooks and projectors.

"We have seen significant growth in sales of LCD TVs, as prices dropped dramatically by almost 60 per cent last year." she said.

Kobkarn added that Toshiba's local manufacturing plant was conducting major changes in product design and features every year. This is more frequent than before, when major changes were made every two to three years.

LG Electronics (Thailand) deputy managing director Alongkorn Chujit Electronics said his company had enjoyed growth of 26 per cent in the first quarter, driven by air-conditioners, and LCD and plasma TVs. The political and economic situation is expected to bottom out in the second quarter, he said.

"Our LCD TVs, launched last year, have enjoyed outstanding growth of 10,000 units in the first five months. We also expect sales volume to increase by 500 per cent this year," he said. The company will allocate a marketing budget of Bt800 million to stimulate demand in the market.

"We are also quite optimistic that the overall electrical-appliance market, both audiovidual and home appliances, will enjoy 10-per-cent growth to more than Bt60 billion this year," said Alongkorn, adding that the company expected its domestic sales to grow by 30 per cent to Bt13 billion and export sales by 20 to 30 per cent to Bt24 billion.

Suthisarn Chirathivat, president of Power Buy, one of the largest local retail chains, said the reduction in interest rates would stimulate demand for real estate and thus encourage instalment loans for electrical appliances.

Power Buy is holding its largest fair - PowerBuy Expo 2007- from April 27 to May 7 at Central Plaza Lat Phrao. The 11-day event is expected to attract more than 500,000 visitors and achieve Bt380 million in sales.

Kwanchai Rungfapaisarn

The Nation