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Sony closes smartphone plant in China, shifts production in Thailand

Sony Corporation is closing its smartphone plant in Beijing, China and will shift production to its plant in Thailand.

A company spokesperson said that in the next few days, Sony Corporation will be closing its Beijing smartphone plant as the Japanese electronics giant aims to cut costs in the loss-making business.

Sony will shift production to its plant in Thailand in a bid to halve costs and turn the smartphone business profitable in the year 2020, the spokesman said. The spokesman also asserted that the decision to close the plant was not related to US-Chinese trade tensions. Production will stop by the end of the month, he added but declined to say how many jobs would be affected by the closure.

The business is one of Sony’s few weak spots and is facing a loss of 95 billion yen ($863 million) for the financial year ending this month.

Following the closure, Sony will only make smartphones at a plant in Thailand but will continue to outsource some production to contract manufacturers, the spokesman also said.

Analysts speculate that Sony should sell the smartphone business given acute price competition with Asian rivals. The company has a global market share of less than one percent, shipping just 6.5 million handsets this financial year, mainly to Japan and Europe.

Sony, on the other hand, said it has no intention to sell as it expects smartphones to be the focus of fifth-generation wireless networks, where various devices can be connected. They aim to make the business profitable by April 2020.