By James Wells

SYDNEY: Floorcare pioneer, James Dyson, believes the international appliance industry will be under threat from Chinese brands based on its growing acquisition of intellectual property and engineering expertise.

In an exclusive interview conducted recently in Sydney, Dyson said that there is a long term danger to several appliance brands if companies continue to rely on China’s low cost manufacturing base without investing in research and development.

“I don’t think that other countries are doing enough about developing engineering from a science and technology base – instead they are carrying on like they were before. What they do not realise about Chinese manufacturing is its size in sheer numerical terms. They are turning out a million scientists and engineers a year of high standard, whereas in England it is less than 10,000,” Dyson said.

“Sooner or later China is going to be developing a vast amount of intellectual property. English companies are comfortable in the fact that while China is a very economical place to manufacture things and while we are controlling the intellectual property, we have a very successful value-added business and that is good for the economy.

“My concern is that China will want to go up the food chain and develop their own brands. It could be the Japanese story all over again, but this time it is the Chinese,” Dyson said.

“There are issues over whether China will be low cost in the future with social reforms and the floating of the currency.

The currency could rise to the dizzying heights of the Yen, which could radically change economics. They will have a much larger technological and scientific base than western countries and companies.”

This is an extract from an article which will appear in the March 2006 edition of Appliance Retailer magazine.