Fujifilm CEO: Supply is Normal, Overproduction Would Force Discounts and Reduce Brand Strength and Gear Value

Recently Fujifilm published the latest financial results, which were very positive for the entire imaging division.

Along with the financial result, they also published a Q&A section (you can find it below in English).

During the Q&A, Fujifilm CEO Mr. Goto has been asked about the shortages and limited inventory.

And I want to be very precise here, so I will copy and paste the answers of the CEO.

QUESTION

I have another question about the Imaging. Although your company performed well from January to March, there were some companies, such as Canon, whose performance was difficult due to inventory adjustments. In your camera business, is there any change in the inventory adjustment and market for digital cameras and INSTAX, respectively, this year? I think you have a reasonably strong plan. Can you tell us about your current situation?

CEO ANSWER:

The most important point is how much brand strength to create and how to maintain it. Therefore, it would be quite unfortunate to manufacture too much and lower the price. What Fujifilm has been trying to do for a long time is finally coming true now.

One is a camera with features. The GFX series, for example, is equipped with the world’s largest CMOS and has earned tremendous trust from professional users and advanced amateurs. The price is quite high, but customers are still waiting for back orders. The lenses accompanying them are also selling well.

We intend to drive the entire imaging business, including INSTAX, while concentrating on building brand strength and not reducing the value of the properties purchased by our customers.

For example, as I say internally, Leica, a well‐known German manufacturer, still maintains a very high value for both their old cameras and the cameras they sell now, and this is our goal. Our goal with mirrorless cameras is to fundamentally change the way Fujifilm has sold cameras in the past.

QUESTION

I understand. Let me confirm one point. Is the inventory situation normal?

CEO ANSWER

Yes

Fujifilm Has a Point, But Normal?

I get it that it’s not good for brands to overproduce and then be forced to sell lots of gear at a huge discount in order to get rid of excess stock. And this is also probably not good for those, who want to resell their Fujifilm gear, as overproduction would make their gear lose in value faster than it otherwise would.

But Fujifilm has to find a better balance between production and demand.

Now, forget about the Fujifilm X100VI. That one got so many pre-orders that even the production capacity of Canon, Nikon and Sony combined would struggle to deliver that one.

But I don’t think that it is “normal” that some gear is hard to find in stock 2+ years after announcement. For example:

• good luck finding the Fujinon XF27mmF2.8 R WR in stock
• the lovely Fujifilm X-E4 was basically never really in stock and Fujifilm discontinued it while many had still one on pre-order
• the Fujifilm X-T5 is currently out of stock at BHphoto
• at the Japanese Fujifilm store every single Fujifilm X and GFX camera is out of stock, just everything, as reported by the Japanese website dclife

With respect, Mr. Goto, but I am sorry to say that this far from “normal supply“.

It’s OK not to overproduce, but it’s also not the best business strategy to miss out on a huge amount of sales because you can’t deliver the gear we actually order.

My Thoughts

So why is Mr. Goto happy with the current stock situation?

Well, his statement leads reputable websites like the Japanese digicame-info speculate the following:

So are you [Fujifilm] intentionally narrowing down the supply of products for that goal [keep prices high]?

Now, I hope that Fujifilm isn’t intentionally creating shortages. I want to believe that they just miscalculate the real demand there is for certain gear.

Because there was a Fujifilm before the social media hype, and one after the hype. And Fujifilm probably still thinks at pre-hype numbers, which is no longer realistic.

What concerns me is that Fujifilm appears content with their supply as long as they meet their internal sales predictions, even if this results in customers waiting months for their gear to ship. From their perspective, hitting their sales targets means success, and they benefit from not having to heavily discount their products.

Anyway, statements like the one reported today do not make me overly confident that, except for the announced production boost for the Fujifilm X100VI, there will be any effort to increase production for the rest of the Fujifilm X and GFX gear.