Loewe, the Bavaria-based German manufacturer of premium TV and audio systems, has found a new partner to extend its future, and describes itself as evolving “from a manufacturer of televisions into a system provider for networked home entertainment technologies, specialising in personalised imagery and sound”.
Central to the changes is a major restructuring through a strategic alliance with Japanese group Toyoichi Tsucho Co., a Tokyo-based company which is a major player as a trading company specialised in electronic parts, components and software for consumer-electronic products, such as televisions.
Toyoichi Tsucho Co. has already been supplying Loewe with LCD panels since 2015, along with LG.Display supplying its OLED panels and also Hisense, whose LED-LCD panels are used in the bild 1 model in a relationship dating back to Loewe’s last significant restructuring in 2013, when it gained financial investor Stargate Capital as its new owner.
Executive Board since December 2018
The new alliance with Toyoichi Tsucho focuses on the supply chain for components beyond the panels, and in particular cost reduction through bundled purchasing. It may not be a coincidence that this announcement comes only months after Dr Ralf Vogt became Chairman of the Loewe Executive Board at the end of 2018; Dr Vogt has been with Loewe since 2001 and was previously the company’s Vice President for Purchasing. According to Dr Vogt the new alliance will enable Loewe to “benefit hugely from the procurement power of our new partner. In addition, with direct deliveries, considerably less capital will be tied up. This approach allows Loewe, as a relatively small CE manufacturer, to be much more competitive with larger companies, and will free resources for brand building and brand communication.”
The reorganisation also sees the Loewe factory in Kronach become an independent organisational unit, to be promoted as a competence centre for electronics and software solutions working with third parties as well as Loewe itself. The agreed purchasing partnership with Toyoichi will include a ‘just in time’ production warehouse operated by the Japanese in Kronach, with economies of scale due to larger purchasing volumes not only benefiting Loewe, but also third parties.
"This opens up cross-industry opportunities for the entry of further partners from the local, national and international environment," says Dr. Vogt. “We are, therefore, making our most important core competencies in software and electronics available to these partners. We are open to financial participation schemes."
This extends beyond Loewe’s traditional product categories, with production orders already secured “from companies working in the fields of air-conditioning technology and building and control technology”. According to the German television news channel and website Welt, car electronics are also being produced at the Kronach plant.
Loewe audio expansion
"In addition to televisions, the original medium of ‘seeing’, we will be investing more and more in audio solutions in the future – in listening," says Dr. Vogt. "To this end, we will continue to expand our audio location in Berlin, which we established last year.”
In this regard a second cooperative arrangement is also being expanded, between Loewe and the delightfully-titled Jazz Hipster Corporation in Taiwan, which works with Loewe in the audio sector. Founded in 1981 by one 'Mr Jazz', Jazz Hipster Corporation was very early into the active speaker market, producing Bluetooth speakers, soundbars, DAB+ and WiFi speakers. It has been serving “top-tier” brands for more than 30 years, and currently professes a focus on developing ‘cloud-serviced’ smart speakers.
New Loewe areas
Loewe also plans to enter additional product categories “that are compatible with Loewe”, and it will be interesting to see if these come to Australia, as they have been announced as to be “offered under the brand's umbrella in Asia and Latin America, among other countries”.
Platform applications and digital services, systems and applications for the networked home are also planned, with news to be released at the IFA show in Berlin this September.
"Our company is currently working flat out on a modular home entertainment system that will enable customers to order digital services from Loewe in the future,” says Vogt. “This ground-breaking innovation will be presented for the first time at this year's IFA in Berlin.”
Loewe also notes how it has been working with universities, colleges, medical research institutes and other partners “for years” to extend the use of its expertise in personalised sound and imagery to other fields of application — in keeping with the tradition of the company founder. one outcome here is the recent roll-out of Mimi Defined technology (see our article here) into Loewe's television operating system.
So how German is Loewe now?
The strategic alliance is not new to Loewe — the German company has long worked with selected partners to remain competitive against rivals, many of which are giant corporations. In the past it has worked closely with Matsushita (Panasonic), Sharp, BMW and Philips. Its German-ness has always remained a priority.
"Our excellent premium products will continue to be 'Made in Germany' from our state-of-the-art factory in Kronach,” confirms Dr Vogt. “We will continue to manufacture televisions for customers entering the premium segment in Pilsen, in the Czech Republic."
A good breakdown of what components come from where was given to us in early 2018 when we asked Loewe’s Ulf Kaempfer about the company's Hisense connection. His reply was as follows:
“Hisense is a partner with Loewe only in a small way, and only in the bild 1. However the bild 1 is 80% made by Loewe and Loewe only. We only use their panel, while the engine, power supply, chassis and circuitry is all Loewe proprietary, the software utilises the Loewe OS software which provides seamless connectivity to all Loewe products. Loewe had many offers — including Apple — however Loewe had to be owned 100% under German influence. The heritage and the history must be kept the same for it to be successful and to remain true to its word. We are very proud of this. And our partner in Australia, Indi Imports, is already moving with the passion and drive that we have here in Kronach, Germany.”
The ever forward-looking approach is confirmed by Dr Vogt.
"Today it is our goal to bring the joy of technology back to people in a simple way,” he says. “This thought shapes our entire product range.”
Loewe TVs are distributed in Australia by Indi Imports: www.indimports.com