GOING BROKE: File photo shows a stand as a man waits for visitors at the booth of German high end TV manufacturer Loewe at the 50th edition of the “IFA” electronics trade fair in Berlin, Germany. Loewe, the last major manufacturer of high-end television sets in Germany, is fighting for survival in a sector increasingly dominated in recent years by Asian rivals. — AFP photo
BERLIN: Loewe, the last major manufacturer of high-end television sets in Germany, is fighting for survival in a sector increasingly dominated in recent years by Asian rivals.
Ironically, it is also hoping that its saviour would hail from Asia, the very region that is at the root of many of its current woes.
Asked by the weekly magazine Der Spiegel whether Loewe will still exist in 12 months’ time, the group’s chairman Matthias Harsch replied: “That’s the question I ask myself every morning.
For the time being, my answer is still ‘yes’.”
Nevertheless, Loewe’s future is looking anything but rosy and the prospect of bankruptcy is looming ever larger over a company whose long years of losses have already eaten up half of its capital.
Last week, Loewe, which was set up by two brothers in Berlin in 1923, opted to apply for protection from its creditors, giving itself three months to find new investors prepared to finance a relaunch of the company.
Harsch told Der Spiegel that he has been in talks with investors in Asia.
In addition, as the most likely partners, he named Chinese makers such as TCL, Changhong, Skyworth and Hisense.
The partner would deliver “the major hardware components — processors, circuit boards and screens,” he said.
During the previous crisis, it was Japanese group Sharp that came to its rescue, taking a 30 per cent stake in Loewe’s share capital.
However, Sharp, too, is making losses and is therefore in no position to help its German partner this time round.
Loewe specialises in high-end equipment like flat-screen TVs that sell for up to 5,000 euros each, but it has been hit by the competition from lower-cost rivals in Asia as well as the increasing saturation of the market.
As a result, Loewe is looking to reposition itself and develop ‘a new price strategy,’ and hopes in future to offer TV sets ‘at the lower end of the premium market’.
Loewe’s woes mirror the overall trend in the once flourishing German market of TV set manufacturers.
Alongside Loewe, the sole survivors are the two companies Metz and Technisat, hardly household names and small compared with giants such as Samsung and Panasonic.
Grundig continues to exist as a brand, but was acquired a number of years ago by the company that owns the Turkish brand Beko.
Telefunken is practically no longer present in the TV set market, and Blaupunkt, a former subsidiary of Bosch, is better known for its car radios, which are made in Malaysia.
“The price war is huge.
“Competition has exploded over the past 10 years, driven primarily by new Asian makers,” the head of Metz, Norbert Kotzbauer, said in a recent press interview.
“For a while, we tried to compensate with ever larger screens.
“But there is clearly a lot of overcapacity in the market,” he said. — AFP