Problem is India doesnt have component makers

While we have had to cut back in some factories,the company is still growing and there are no plans for cutting jobs in India.

Embattled global electronics giant Sony has high hopes from the Indian market. But one of the problems here is that the country does not have component manufacturers,because of which the company has to import finished products,Sony India managing director Masaru Tamagawa tells Gayatri Verma. This year the company plans to grow its equity base in India and further penetrate the market,he says. Excerpts from the interview:

amp;149;This year weve seen Sony cut a lot of jobs and close down factories in many countries. Is Sonys electronics division in retreat? What are the implications for India?

While we have had to cut back in some factories,the company is still growing and there are no plans for cutting jobs in India.

amp;149;In the mid 90s,Japanese brands like Sony really drove the consumer electronics market. But when the markets boomed in the last 3-4 years,Korean companies ruled the roost. Did your India strategy fail?

No we do not see it like that. We have completely different product lines. There are very few products in which we compete in the same market as these companies. They manufacture consumer durables like washing machines and fridges,where we do not have a presence at all. We concentrate on consumer electronic items like digital cameras and large LCD televisions. Also,our target customer is very different. Our brand is more aspirational and we target a higher income family. Sony products are of the kind that you can one day hope to own when your income grows and that is the image that we would like to promote.

amp;149;Have you been affected by the currency fluctuations with the depreciation of the rupee and the appreciation of the yen?

I cannot really comment on the subject until the official sales and profits report has been released by the head of the company in May- June.

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amp;149;In India,how much do high import duties affect you?

Duties in India are much too high for everything. The problem with India is that there are no component manufacturers in this country and there is also no one equipped to assemble these products here. So we import everything. Of course,you learn to adapt. Rather than manufacture sub-standard products here,we prefer to import high quality finished products. Thats the trade-off.

amp;149;Will a Free Trade Agreement with Japan have any impact?

There has been talk of an FTA with Japan over the last 2-3 years at the secretary level but there is nothing of very great significance that has emerged so far. But we are hopeful that in the medium term something will come out of it.

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amp;149;Where does India fit in Sonys Asia Pacific strategy in terms of revenue and strategy for 2009?

India a very important country and market for us,with huge growth potential. It is our 8th largest market after the US,Japan,China,France,Italy,Spain and Russia in no particular order. This year we plan to grow our equity base in the country,further penetrate the market and improve sales distribution and services because all these are important to grow our brand in the country,especially in a difficult year like 2009.

amp;149;Which product lines do you see growing in 2009?

Cybershot cameras,handycams and digital electronics will continue to grow. We release about three new products in these lines every month and the response has been very good and we expect this to continue. The products are very well priced: you can get a camera for less than Rs 10,000,so many more people now believe they too can own one. The Bravia and the Vaio are also doing well.