Japanese camera maker Nikon has been struggling with a diminishing demand for its cameras. So bad the situation of the camera giant that it is now being reported that the company may pull the plug on making cameras in Japan, something the company has been doing for more than 70 years. The report of Nikon shutting down manufacturing in Japan comes from a local newspaper called Asahi.
The daily reports that Nikon is pulling the plug on its Japanese camera factory and may be moving camera production entirely to Thailand in order to cut costs. According to the report, Nikon currently has two factories – one in the Sendai in the Miyagi Prefecture of northern Japan and one in Thailand. Nikon’s Z6 and Z7 mirrorless cameras are already being made in the Thai factory and it is now being reported that Nikon may move the manufacturing of its D6 DSLR camera to Thailand by the end of 2021. This, according to the Asahi report, will mark the end of ‘Made in Japan’ Nikon cameras.
Nikon had started its Sendai factory in 1971 and has served as the company’s “mothership” manufacturing plant for nearly half a century, advising the technical operations of the factories outside of Japan. Further, the Thailand factory for Nikon was established in 1990 and has since become Nikon’s main factory for producing cameras and interchangeable lenses over the past 30 years.
In a response to Asahi, Nikon says that while the camera production will be transferred out of Japan, its Sendai plant will continue producing parts for video products as well as serving as an incubator for “new businesses that will support Nikon’s future.”
This past year has not been kind to any camera manufacturer, but Nikon is reportedly in “dire straits” as it had yet to financially recover from previous business decisions even before it was hit with the worst slump in camera sales in years, because of the COVID-19 impact. Camera Sales in 2020 Have Plummeted As Much As 54%. Camera manufacturers sold 1.562 million DSLR units through September of 2020, which is down 54%. The value of those cameras was 64.6 billion yen (~$625,667,150), which is a 51% decrease year over year. Though faring better, mirrorless cameras also suffered a large drop, with 1.807 million units shipped so far, which is down 34%. The value of those units was 145.82 billion yen (~$1,412,303,155), a 26% sales decrease. Compact camera bodies sold in greater volume than DSLRs, but suffered nearly as badly with a 51% drop in units sold to 2.498 million. The value of those sales was 53.578 billion yen (~$518,916,324), down 26%.
According to Japanese publication Toyo Keizai and summarized by Digicame-Info, “the prestigious Nikon is in dire straits”, because of the deterioration of the main camera business. In the video business, which includes cameras, sales for the coming financial quarter are expected to decrease by around 40% from the previous term to 140 billion yen (~$1,338,809,640), leaving the company with an operating deficit of 45 billion yen (~$430,331,670).
The most common scapegoat for poor camera sales, the growth of the smartphone market, is not entirely to blame here. Toyo Keizai says that Nikon’s fear of conflicting with its DSLR camera sales made the company reluctant to produce a mirrorless camera. By the time it entered the market, Sony had long since entrenched itself. In 2019, Sony produced 1.65 million units, while Nikon had only produced 280,000. Canon similarly waited to enter the market but has fared much better with strong sales of the EOS R5 capping a couple of years of what is proving to be a better mirrorless strategy.
Only time can tell whether Nikon would wade its way through this struggle and emerge triumphantly or not. For now, we will surely miss Nikon’s I AM MADE IN JAPAN tag.