IN THE PIANO trade, worldwide competition has been sharpening. You may have missed it, but things are getting tense. Congress has asked the U.S. International Trade Commission to look into the American piano makers' complaints about rapacious and destructive competition from abroad, and the ITC has now published its report.
It finds that the American industry has lost a significant and growing share of its market to manufacturers in--yes, indeed--Japan and Korea. How did that happen? "The typical level of automation used in producing Japanese pianos is generally regarded by U.S. producers and importers as being higher than that used by U.S. producers," the ITC found. And again: "U.S. manufacturers have not applied the latest production technologies to operations on grand pianos. Domestic firms have lacked the economies of scale to justify the substantial investments that would be required for U.S. manufacturers to keep pace. . . ."
First of all, the Japanese themselves now buy more pianos than any other country, providing a strong base for the Japanese manufacturers. That allows them to integrate--that is, to manufacture their own components like plywood and hardware. Only one American company has its own sawmill; most buy their hardware from suppliers, sometimes Japanese. It's quite true that American labor costs are higher than Japanese, not to mention Korean. But that's only the beginning of the cost differential. Incidentally, most of the Japanese pianos were not cheaper than American ones. They had other advantages.
Polyester finishes sell pianos, the dealers say. Polyester is difficult and expensive to apply. Only one American manufacturer has invested in the equipment to do it. Most of the imports have it.
As for sales methods, the ITC found that "the Japanese suppliers have placed an emphasis on a full range of services and promotion activities with piano teachers and technicians." The American companies do some of those things but not, apparently, so effectively. It also seems that the Japanese have been more careful in their treatment of their dealers. They shipped them pianos only at the rate at which they were being sold, while the American companies encouraged their dealers to accumulate large inventories. When interest rates rose and the recession arrived, the Japanese companies' dealers with their low inventories were better prepared to survive.
Doesn't it all begin to sound familiar?