Industry News | Another Long-Standing Japanese Motor Manufacturer Goes Bankrupt! Cumulative Debt Reaches ¥46.1 Billion

Japanese electronics manufacturer Funai Electric announced its bankruptcy on October 24, with accumulated debts reaching ¥46.1 billion (approx. $303.6 million). Established in 1961, Funai once held a significant position in North America with products like TVs, audio equipment, and printers under its FUNAI brand, particularly in the LCD TV market. However, in recent years, fierce price competition from Chinese manufacturers and a shrinking North American market led to consecutive losses.

Additionally, management issues exacerbated the company’s reputation crisis, particularly after mismanagement within overseas subsidiaries. In 2021, Funai was acquired by SHC Holdings, but frequent leadership changes, coupled with unclear governance and new, external board members, only deepened concerns around corporate governance.

As the financial strain became unsustainable, Funai filed for bankruptcy, with Tokyo District Court accepting the filing on October 24. The company promptly laid off 2,000 employees, though expected payroll went unpaid, leaving employees stunned. Many employees expressed shock at the suddenness of the announcement. One employee mentioned that they “never expected it to happen so suddenly,” while another, with 17 years at Funai, stated that though many accepted it calmly, the surprise was widespread.

Funai’s bankruptcy reflects the increasing pressure facing Japan’s traditional electronics sector amidst globalization and a rapidly shifting market. This event not only impacts Funai’s workforce but also serves as a warning to other Japanese manufacturers confronting similar challenges.