BERLIN – The weaker euro may slow the growth of Europe's consumer electronics sector, but the head of Toshiba Corp's European division told Reuters on Thursday the company wouldn't trim margins to maintain demand.
“We're not planning to subsidise this exchange rate swing at all. We'll either find ways of reducing the costs still further or we may have to adjust prices upwards,” said Alan Thompson, Toshiba's executive vice president of computer systems for Europe, the Middle East and Africa.
“There's always the risk that a weaker euro could slow market growth. I sincerely hope that our competitors take the same view as us responding to this ... recognising that the weaker euro/dollar exchange rate should not be fully subsidised,” he said.
The euro has fallen to $1.477 from a peak of around $1.60 in recent weeks.
Thompson said retailers were facing pressure from the economic slowdown and it was hard to predict where consumers would cut spending, but that Toshiba was well positioned with alternatives to expensive rival high-definition video playback systems.
“Retailers are struggling. They are want to try moving in two directions. One is to explore new price points lower down. The other is to provide new things that will persuade customers to buy mid-range and higher-end products,” he said.
Toshiba lost a battle with Sony Corp's rival Blu-ray system for high-definition video discs earlier this year.
“We're now free to go full out for all the alternatives. That will give consumers a lot of choice, which for many, perhaps most, will be a better way of going forward,” Thompson said in an interview at IFA, the world's biggest consumer electronics fair in Berlin.
Toshiba had earlier unveiled a new system for upscaling standard definition television and video to a higher definition, which Thompson said could appeal to consumers not willing to splash out on new high-definition disks and players.
He was bullish about Toshiba's sales prospects for the Christmas season.
“We don't think demand will be a limitation as we run up to the end of the year. We obviously are intending to produce a huge amount more than last year, and we will be able to sell it all,” he said.
For laptop PCs, Toshiba hoped for growth faster than the market average, Thompson added.
“Q4 for EMEA we'd definitely be looking to grow well above the market rate. I'm not saying double, but at least above the market rate; well beyond. Somewhere between growth and double would be OK ... Beyond that we want to grow share further.”
He declined to give a market share target.
With a market share of 10.1 percent, Toshiba was the world's fourth-largest notebook PC maker in 2007, behind Hewlett-Packard Co, Acer Inc and Dell Inc, according to research firm Gartner.
(Editing by Will Waterman)
