KAWAI MUSICAL INSTRUMENTS MANUFACTURING CO.,LTD.

Business Details

The segment manufactures and sells pianos (grand and upright), digital pianos, electronic organs, wind and percussion instruments, and other instruments, in addition to operating Music School / Gymnastics School, providing Instrument Tuning & Repair Service, and publishing and selling sheet music and educational materials. Domestically, the business is conducted through directly operated stores and a network of sales agents, while overseas expansion is carried out globally through consolidated subsidiaries such as Kawai America, Kawai Europe, and Kawai Musical Instruments Manufacturing (China). Manufacturing bases include Indonesia (PT. Kawai Indonesia) and China (Shanghai Kawai Electronic). This core business accounts for approximately 78% of consolidated net sales.

Recent Overview

Both sales and losses worsened due to weak sales in Europe and China, while North America and Japan remained solid.

In the Musical Instrument Education Business for FY2026 (ending March 2026), net sales were ¥56,492 million (down ¥1,886 million year on year) and operating loss was ¥852 million (worsening by ¥150 million year on year). In China, demand declined due to the continuation of the "double reduction" policy, while in Europe, sales of entry-level upright pianos and digital pianos were sluggish amid intensified price competition caused by rising retail inventory. On the other hand, sales in North America remained solid due to brand awareness enhancement initiatives, and in Japan, the GX Series rebranding and the Shigeru Kawai Series performed well. The company opened new directly operated stores in Australia (Brisbane, Adelaide) and the United States (Denver, St. Louis) to expand sales channels. Brand value continues to rise, supported by the selection of the SK-EX at prestigious international competitions.

Key Products

Growth Drivers

• Solid trend in keyboard instrument sales in the North American market driven by brand awareness enhancement initiatives
• Strong sales of the domestic GX Series grand piano rebranding and the Shigeru Kawai Series
• High value-added strategy and market share expansion under the 8th Medium-Term Management Plan, "KAWAI's Ten-Year Plan"
• Expansion of sales channels through the opening of new directly operated stores in Australia and the United States (four stores opened between July 2025 and February 2026)
• Enhanced brand reputation from SK-EX selections at international competitions such as the Chopin, Paderewski, and Takamatsu International Piano Competitions
• Strengthened digital marketing and dealer development, including e-commerce channels
• Development of new markets such as Latin America

Risks

• Continuing downward trend in keyboard instrument demand in China due to the ongoing "double reduction" policy
• Intensified price competition in the European market amid rising retail inventory levels (particularly for entry-level upright pianos and digital pianos)
• Risk that the overall recovery pace of keyboard instrument sales falls short of expectations
• Profit pressure from rising material costs and changes in product mix
• Uncertainty over the global economic outlook due to U.S. tariff policy and geopolitical risks
• Weakening consumer sentiment and reduced demand due to rising prices
• International risks stemming from the prolonged Ukraine crisis and instability in the Middle East