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Whirlpool Corp. to Sell Appliances in Japan Through Big Discounter

May 31, 1996

DETROIT (AP) _ Whirlpool Corp. said Friday that it will begin selling home appliances through a major Japanese discount retailer, and that the two companies will develop products specifically for Japan.

Daiichi Corp., which has more than 300 stores throughout Japan, will begin selling Whirlpool refrigerators Saturday and Whirlpool microwave ovens and washing machines next year, Whirlpool spokesman T.R. Reid said.

The two companies also will look at opportunities to market appliances elsewhere, including Singapore and Australia, where Daiichi also has stores.

Whirlpool, based in Benton Harbor, Mich., is the world’s largest manufacturer of home appliances and has been expanding aggressively overseas. It sees Asia as the region with the largest growth potential.

``As the largest home appliance market in Asia and second only to the United States worldwide, Japan with its sophisticated and demanding customers is very important to Whirlpool,″ said Bill Marohn, president and chief operating officer. ``Our success in Asia depends a great deal on how well we serve Japan.″

Daiichi will provide delivery, installation and service for its Whirlpool products.

Whirlpool has sold a small number of appliances to Japanese consumers and commercial laundries for several years through smaller retailers. The deal with Daiichi represents Whirlpool’s biggest move into the market, Reid said.

Whirlpool’s refrigerators are expected to be priced significantly lower than comparable Japanese-made refrigerators.

Marohn said the deal with Daiichi, which eliminates some costly steps of the Japanese distribution system, likely will pressure Japanese manufacturers to lower prices.

But Japan, like the United States, is a mature, slowly growing market in which sales are dominated by a few domestic companies, Reid said.

``Japan is a market we would welcome a meaningful presence in, but the core of our Asian strategy is the huge and fast-growing markets of China and India,″ Reid said. ``We’d like to force other global competitors to do business against us on all fronts.″

Marohn said Whirlpool’s target is 5 percent of the Japanese market in five years. He said, however, that he did not expect the expansion there to have much of an immediate effect on earnings.

Reid denied reports that Whirlpool’s move was in response to General Electric Co.’s recent success in selling its large American-style refrigerators at low prices through another discount retailer, Kojima Co.

``In most of Asia, large-capacity appliances are always going to be niche products more than anything else,″ he said. ``Japan is an exception because it is more affluent.″

Marohn said Whirlpool already was talking with Daiichi about selecting models from Whirlpool’s European line that would compete more directly with traditional Japanese refrigerators.

Whirlpool manufactures appliances in 12 countries and sells them under 11 brand names in about 140 countries. Daiichi is based in Hiroshima, Japan.