Panasonic is gearing up to shut down a large appliance factory on the outskirts of Bangkok as early as this autumn in order to consolidate their production at a larger facility based in Vietnam as a means of enjoying greater efficiency, according to Japan’s Nikkei Asian Review.

Nikkei has reported that the Thai plant will stop producing washing machines from September and refrigerators from October. Following this, the building itself will then be closed by March 2021, with a neighbouring research and development centre also set to shut.

In addition, with roughly 800 employees working at the site, all of them will be offered help to find a different position within the company.

Through the move to Vietnam, Panasonic hopes to find ways in which to reduce costs through consolidating parts procurement. The new plant, which will be located just outside of Hanoi, will become the company's largest manufacturing hub in terms of producing refrigerators and washing machines in Southeast Asia, in addition to possessing excess capacity, according to the reputable Japanese business newspaper.

Moreover, the shift also reflects a new phase occurring in Southeast Asia's manufacturing industry. This transition first occurred in the 1970s, when Japanese firms making electronics shifted their domestic manufacturing to Singapore and Malaysia due to the rise in Japan’s Yen currency after switching to a floating exchange rate, therefore serving to damage Japan's price competitiveness.

The newspaper added that this shift in production to countries such as Thailand can attributed to the expensive wages in Singapore, with companies looking for even cheaper locations and keen to tap into the massive potential demand for refrigerators, washing machines, and microwaves among largely populated countries in Southeast Asia, such as Indonesia, the Philippines, and Vietnam.

Although Panasonic has been producing large household appliances in Thailand since 1979, it currently employs approximately 8,000 people in Vietnam. In addition to making large appliances, local units manufacture items such as TVs, cordless telephones, card payment terminals, and industrial devices.

At present, Panasonic is in the midst of restructuring efforts and has set a goal of cutting costs by roughly US$930 million by the fiscal year ending March 2021. Furthermore, it is considering further changes in terms of its appliance production.