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Canon closes major camera and lens factory, "facing unprecedented difficulties" in camera market


Andrew Reid
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Dark times for Canon and the camera business

https://www.eoshd.com/news/canon-facing-unprecedented-difficulties-shuts-down-massive-factory/

Just closed their massive factory in China.

It produces 13 million lenses in one year... in a pandemic year (2020) no less.

The chip shortage on top of the pandemic really seems to becoming a deafening crisis for camera makers.

Smartphones remain the biggest threat, but never before has Canon felt the need to close a factory of this size, established for 32 years!

Hope the employees can get a better job elsewhere and that they are treated respectfully during the termination process.

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EOSHD Pro Color 5 for Sony cameras EOSHD Z LOG for Nikon CamerasEOSHD C-LOG and Film Profiles for All Canon DSLRs

Within a country completely locked to travel, a foreign business is very hard to manage remotely.
Globaltime being a propaganda newspaper, it will be hard for them to speak about this.

I have witnessed so many businesses closing their factory in China for this reason that I will not say that I'm surprised.



 

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19 hours ago, independent said:

Yeah, on the heels of a pretty good year, relatively speaking, I think Canon is frontrunning the supply shortages and the decline of the overall camera market

I agree. They probably don't need the capacity anymore because of pandemic and more importantly the chip shortage which, by guessing by their actions, they see continuing for awhile.

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this and their new products announcement tomorrow ? guess many companies are trimming low margin, low sales or EOL products living on borrowed time. Guess they have enough parts for warranty and repairs on those products.

 Also note : BMD trimmed their product line silently at least a few weeks ago, along with pricing changes a few months back. 

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6 minutes ago, SteveOakley said:

this and their new products announcement tomorrow ? guess many companies are trimming low margin, low sales or EOL products living on borrowed time. Guess they have enough parts for warranty and repairs on those products.

 Also note : BMD trimmed their product line silently at least a few weeks ago, along with pricing changes a few months back. 

Are you referring to the retirement of the BM Micro Cinema Camera?  That got mentioned here.  Were there other models that got discontinued too?

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Shutting down a factory isn't necessarily a bad sign for Canon. The camera market is obviously a shrinking market, and to make money in a shrinking market it's necessary to downsize long before you have to downsize from a financial perspective. It makes perfect sense for Canon to cut back on the manufacturing capabilities for lower end cameras and focus on the high end units. I would have worried more if Canon didn't close factories.

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If they just stopped crippling their cameras then they could make a few models, make them cheaply with large volumes and price them to sell in volume because we'd all buy them.

Of course, back here in reality...

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I am certain that this closure is due to financial as opposed to ethical reasons, but I would be happy to support an industry of well-built quality tools built by well-paid specialists in democratic countries (like Japan, South Korea or Taiwan) instead of crap made by exploited serfs in China.

$6000-$7000 for a Canon R5C or Nikon Z9 is a ton, but if it lasts ten years it's well worth it.  Hopefully the companies make it worthwhile for their workers as well.

Once again, I strongly doubt that the industry could survive an economy where people are satisfied with their purchases

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Actually many manufacturers have been wanting to get out of China since the beginning of 2020. The Pandemic and the whole expansionism contributed big time to it. The Japanese Government even paid businesses billions of yen to move out of China (https://www.bloombergquint.com/global-economics/japan-to-pay-at-least-536-million-for-companies-to-leave-china).

I believe many other countries with manufacturing in China did too, and many large ones left are contemplating too. The environment for manufacturing has been losing its advantage for a while now, and the whole friction with its Asian neighbours, was probably the last nail.in the coffin (surprisingly, not Covid or the terrible lockdown so much). 

Apple seems to be one of the few ones, that has been able to retain much (not all) of its advantage. It pays higher wages than before, but their other sweat shop practices, apparently haven't gone. They paid enormous sums apparently including the majority as political money, to continue running their sweat shops.

https://9to5mac.com/2021/12/07/apple-china-iphone-pledge/

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Companies leaving China is duo to the rising production costs which is inherent in any Capitalist economy, thats why a lot of phone manufacturers assemble their devices in countries like Malay and Vietnam now duo to cheaper labour power and cheaper land costs. 

Canon which mostly make profit margins in their high end camera segments and lens selection past 10 years probably is looking to move production elsewhere for their lower end offerings probably to countries like Philippines, Vietnam, Malay or Indonesia. 

They essentially need places with stability, a competent workforce, low costs in land, construction and running costs but also very cheap labour, labour costs are the biggest hurdle for big business to overcome. 

Even Chinese companies produce stuff outside of China whenever they can these days, like in Vietnam, Thailand or North Korea which ironically has the best equipment and workforce for production costs comparable to other third world countries. 

Canon and everyone else realise that maintaining production in China in the long run is not good, rise of labour costs means the products will get more expensive, I am sure everyone has seen the rise of prices in technology past 10 years, its mostly tied to the Chinese labour cost rising. 

You can see this trend as well with america and European countries in the 60s and 70s when Japan was the factory of the world, once Japanese labour costs went up, so did cost of products made in Japan, thats when companies moved their production to likes of China and South Korea. 

I suspect Africa will be the next big expansion for Corporations to seek out for their hilariously low labour costs, either that or automation with robotics will become the norm for low cost production. 

Big business aint stupid, they too realise if they cannot keep their costs low as possible to maximise profit, people wont buy their products at certain prices, thats bad business no matter how shoddy made it is as long as the price is right people will buy. 

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18 minutes ago, SMGJohn said:

I suspect Africa will be the next big expansion for Corporations to seek out for their hilariously low labour costs, either that or automation with robotics will become the norm for low cost production. 

Note that the video is 3 years old 🙂 

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