PIANOS: ECONOMIC AND COMPETITIVE CONDITIONS
Investigation No. 332-401 Publication 3196
Appendix E Text 1
The four largest piano producers in the world are multi-national corporations based in Asia. Yamaha Corporation and Kawai Musical Instrument Manufacturing Company are headquartered in Japan; Samick Musical Instrument Manufacturing Company and Young Chang Akki Company are headquartered in Korea. Each is profiled below. The profiles provide information on manufacturing locations, start-up dates, product mix, brand names used, and contracts to supply other manufacturers with pianos. This appendix also provides information about leading producers in China and Europe that export pianos to the United States.
Yamaha and Kawai are Japan’s only significant exporters of pianos to the United States. Both are headquartered in Hamamatsu, Japan. The large domestic market in Japan has allowed each to achieve significant economies of scale. Each is a leader in the global industry in terms of manufacturing technology. In addition to accounting for most piano production in Japan, collectively, the two companies accounted for more than one-half of all vertical pianos produced in the United States in 1998.
Yamaha is, by far, the world’s largest producer of both pianos and other music and sound equipment, and the firm currently manufactures pianos in Japan, the United States, Taiwan, Indonesia, China, and the EU. Yamaha has separate facilities in Japan for the production of vertical and grand pianos. Although Yamaha makes most of its own parts, the company imports spruce and certain other wood stock from the United States. Most production equipment is either made by Yamaha or purchased from nearby Japanese suppliers. All cast-iron plates used in the production of Yamaha pianos (regardless of assembly location) are made in a state-of-the-art Yamaha foundry in Japan.
Yamaha’s production processes in Japan are reportedly the most highly automated in the world. However, to reduce production costs and hedge against currency fluctuations, Yamaha opened a plant in China in 1997 to produce certain piano parts that require relatively labor-intensive manufacturing processes. Parts made by Yamaha’s wholly owned subsidiary, Xiaoshan Yamaha Musical Instrument Co. Inc., are exported to Yamaha’s assembly plants throughout the world.
Yamaha operates about 6,000 music schools in Japan, and parents of children attending these schools are the principal market for Yamaha pianos. Because rooms are smaller in Japanese homes than in U.S. homes, most of Yamaha’s sales in the Japanese market are tall, vertical pianos. Grand pianos account for a much larger portion of Yamaha’s U.S. sales than they do of Yamaha’s sales in Japan.
Yamaha began exporting pianos to the United States in 1960. It purchased Everett Piano Co. of South Haven, MI in 1972, but shifted U.S. production in 1986 to Thomaston, GA, where Yamaha had previously established a plant for the manufacture of electronic musical instruments. The vertical pianos made in Georgia combine U.S.-origin parts and materials with plates, action assemblies, and keys imported from Japan. The Thomaston plant now produces nearly 80 percent of all of the vertical pianos sold by Yamaha in the United States. By 1998, Yamaha had a U.S. distribution network of 300 dealers.
Yamaha owns a 24.9 percent share of Schimmel Piano Group, one of the largest piano manufacturers in Western Europe, and sells German-made Schimmel pianos in Japan.Kemble, Yamaha’s majority-owned joint venture in England, is the largest producer in Western Europe and reportedly accounted for 85 percent of piano production in the United Kingdom in 1993. Kemble makes both Yamaha and Kemble brand pianos, with the Kemble brand priced higher than the company’s Yamaha brand pianos, but lower than pianos by Schimmel. Kemble brand pianos are marketed primarily in Europe and Asia, the company began exporting Kemble pianos to the United States in 1994.
Yamaha tries to produce pianos in close proximity to the leading markets and, where possible, establish partnerships with local producers. Hence, Yamaha also has joint production and marketing arrangements with companies in Germany, the United Kingdom, Taiwan, Indonesia, and China.
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