According to sources from Nikkei, Nintendo of Japan will transfer some of the production of the Switch handheld game from China to Vietnam, fearing that the US-China trade war will cast shadows on the play device. This cult game.
Currently, almost all switches are manufactured in China through outsourcing companies, including Foxconn. Therefore, the factories of this company in Vietnam can undertake the transfer from China in just a few months.
About 40% of the 17 million console switches sold in fiscal year 2018 belong to the American market – mainly the US – Nintendo's largest market by sales. So the company is actively seeking to avoid tariff risks, when they feel this will be a critical blow for both the operations of the company and their customers.
Nintendo plans to keep the Switch's global sales target in fiscal year 2019 at 18 million units, so increasing production in Vietnam could bring about a corresponding decline in production. China for the original plan.
Currently, the Switch is being sold in the US for about $ 300. But this price can add tens of dollars more if Nintendo makes consumers suffer most or all of the burden of the 25% tariff, threatening to impose on products made in China. Currently this console game machine is not subject to import tax on the US.
At the summit in late June, US President Donald Trump and his counterpart, Chinese President Xi Jinping agreed to reopen bilateral negotiations on trade, leading to the abolition of the round. Fourth tariff according to Washington's plan. But manufacturers around the world are still concerned that this conflict will last, causing many companies to review production strategies in China.
Japanese electronics firm Sharp is aiming to shift production of several laptops to the US market to Vietnam, while Ricoh plans to completely shift production of office machines to Thailand. The fourth US tariff, if applied, will skyrocket the price of electronic goods.
Refer to Nikkei