Nikon expects declined sales in China that could be caused by the recent boycott of Japanese products

   

Several news media outlets reported last month on the boycott of Japanese products in China caused by the recent Japanese government’s purchase of some of the Diaoyu islands which are claimed also by China. It seems that the issue is serious enough that Nikon mentioned it in their latest Q&A session for the Q2 financial results of the Imaging Division:

Q: What can you tell us about the digital camera market?

A: The market for digital cameras with interchangeable lenses grew by approximately 20% in the first half compared to the same period in the previous year however the compact digital cameras market fell by approximately 20%. Amidst this business environment, Nikon achieved growth in unit sales above market growth and increased its market share across all product segments. Global share for the recent 2Q saw us regain our market share of above 40% for digital SLR cameras by overcoming the influence of the floods in Thailand while we achieved just over a 20% market share for non-reflex cameras and compact digital cameras. With respect to market size for the full year, our forecasts for digital cameras—interchangeable lens type and interchangeable lenses remains unchanged on the back of strong growth in these areas. However, with the downturn in the economy of emerging countries and the impact of smartphones, we expect the market for compact digital cameras to contract further by 15 million units to 80 million units.

Q: What can you tell us about the impact of the boycott movement in China?

A: It is difficult to determine whether the drop in sales in China is the result of a slowdown economy or a direct result of the boycotts, however in stores, the impact on compact digital camera sales has been severe and more recently, this is being passed on to digital SLR camera sales. Although we expect a drop in sales of digital cameras with interchangeable lenses in the vicinity of tens of thousands of units over the full year, we are planning to recover this primarily through the European market. The impact on the compact digital camera market will be more severe and as a result, we expect that it will impact on approximately 40% of a downward adjustment of 1 million units.

Q: What can you tell us about the non-reflex camera market and the Nikon 1 series?

A: Although varying from region to region, the non-reflex camera market is growing on average from 60 to 70% per year. In regards to the Nikon 1 advanced camera with interchangeable lenses, while difficult in the maturing domestic market, we are currently fighting for top market share in the European and US markets where the ratio of non-reflex cameras to digital cameras with interchangeable lenses is still low and there is potential for further growth. We are receiving strong support from our customers with global share reaching approximately 25%. Nikon will continue draw on the unique concept of the Nikon 1 series to provide appealing products and enhance our marketing activities.

Last month Canon had to cut their earnings outlook as a result of China's boycott.

Read more on the history of Chinese boycotts of Japanese products.

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