SINGAPORE (AP) -- Sony Corp. President Ryoji Chubachi warned Thursday that stagflation -- slowing economic growth and quickening inflation -- in the U.S., Europe and Japan is beginning to undermine consumer demand in Asia.
"This is the reality we are facing. Our concern is that consumers' buying power is decreasing." Chubachi said at a news conference in Singapore at the opening of a lithium-ion battery plant here, Sony's first battery factory in Southeast Asia.
"If this situation continues long-term, it would affect Sony," he said.
Sony said last month its April-June profit plunged by about half from a year ago, in part because of slowing electronics sales growth.
Chubachi, which heads the company's electronics operations, said demand for Sony televisions jumped ahead of this month's Olympic Games in Beijing, and that the Tokyo-based electronics giants' computers, appliances and mobile phones also remain popular.
Sony invested $106 million in the Singapore plant, which will produce 8 million battery units a month for mobile phones by 2010 and employ 500 workers. Rechargable lithium-ion batteries, now common in cell phones and laptops, produce more power and are smaller than nickel-metal hydride batteries.
The factory is part of $370 million expansion to boost Sony's battery production by 80 percent to 74 billion units a month by 2011. It is also Singapore's first lithium-ion battery plant.
"Sony would like to address the needs of this drastically expanding market to establish a leading position," Chubachi said.
In Singapore, Sony also manufactures components such as lens, magnetic devices and power supply units. It also has a research and development center.