24/Jun/2026 – Update on Kawai’s Europe Business | Hibiki Path Advisors Official Website

In June 2026, Hibiki Path Advisors SPC (“we,” and/or “us,”) had the opportunity to speak with Mr. Norikazu Takada, President of Kawai Europa GmbH, which oversees KAWAI’s operations across Europe and represents a critical frontline in the execution of the company’s global strategy. Kawai Musical Instruments Manufacturing Co., Ltd. (TSE: 7952; “the Company” or “KAWAI”) has been one of our core investments since 2023. With the permission of KAWAI, we are pleased to share our observations below.

This note is structured in three parts. First, we revisit the “KAWAI Ten-Year Plan” and discuss the strategic importance of the European market. Second, we outline the distinctive characteristics and current conditions of the European market. Third, we examine the key strategic initiatives currently being implemented by KAWAI.

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We begin with (1) the “KAWAI Ten-Year Plan,” which was announced in March last year and on which we shared our initial assessment shortly thereafter. The plan represents a fundamental transformation of KAWAI’s management philosophy and mission, positioning the Company to become the world’s leading keyboard instrument manufacturer. We regard it as an ambitious long-term strategy.

(Source: KAWAI Ten-Year Plan)

At the time of its announcement, the contraction of China piano market—partly due to policy changes such as the “double reduction” policy—was still exerting a negative impact, and some skepticism existed regarding the feasibility of achieving the plan’s long-term targets. Nevertheless, we maintain strong confidence in its attainability, provided that KAWAI steadily executes strategies and tactics aimed at enhancing brand value on a global scale within the music leisure market, which is inherently characterized by relatively stable demand growth over time.

Let us turn to the center of our discussion – “Europe”. Europe has become KAWAI’s largest market by revenue, accounting for approximately 30% of keyboard instrument revenue in both FY3/25 and FY3/26, after China’s market crash. As such, it represents a critical region in assessing the feasibility of the Company’s medium- to long-term plan. Notably, Mr. Takada—formerly Head of Corporate Strategy and one of the key architects of the Ten-Year Plan alongside President Kawai—relocated to Europe to lead the region’s operations and drive execution on the ground.

(Source: KAWAI Ten-Year Plan)

Next, (2) we discuss the unique characteristics and current state of the European market.

One of the most notable insights from our discussion was the fundamental difference between the instrument buying ecosystem in Europe and that in Japan, which naturally leads to distinct marketing approaches. In continental Europe, particularly in France, Germany, and the Benelux countries, music is deeply embedded in daily life, and public music education institutions are widely available across communities. These range from conservatories to local community-based music schools, reflecting a level of public accessibility that is difficult to imagine from a Japanese perspective.

In Japan, by contrast—especially at the early stages of music education—students typically begin under private instructors in their local neighborhoods. Instrument purchases are often facilitated through these instructors (commonly referred to in the industry as “lesson-er” in Japan). In Europe, however, the process is largely conducted through public institutions from beginning to end, with instructors effectively serving as public-sector employees.

In other words, Europe’s music education system is structurally more established than Japan’s, with depth spanning from entry-level to advanced training. This necessitates a fundamentally different approach to identifying customer personas and designing customer journeys in instrument sales and marketing.

According to Mr. Takada, the European music market this year faces a challenging environment. Prolonged geopolitical tensions—including the war in Ukraine and instability in the Middle East—have weighed on economic conditions and consumer sentiment. In addition, rising defense related expenses across countries have led to budget constraints in cultural sectors. Despite these headwinds, KAWAI’s European business has performed solidly, supported by the effectiveness of its marketing initiatives and improvements in operational management—including the integration of distribution channels and enhanced pricing controls. Mr. Takada expressed strong confidence in achieving the full-year budget for the current fiscal year.

Finally, (3) we turn to KAWAI’s current strategic initiatives.

As noted, public music educators play a central role in instrument selection in Europe. These individuals, as both being professional musicians and also public servants, demand a compelling balance of quality and price. For KAWAI—already recognized for producing high-quality instruments—this creates an opportunity to compete on value without resorting to price competition, provided that awareness and understanding of its products are effectively expanded among potential users.

While specific details were not disclosed for apparent reasons, KAWAI has partnered with marketing agencies to identify target personas for its brand storytelling and to implement targeted marketing initiatives. Over the latter half of last year, KAWAI focused on driving traffic to its website and communicating a rich brand narrative alongside detailed product quality. These efforts are now beginning to yield tangible results. It carefully manages a customer journey in which prospective buyers are guided from social media engagement to visits to KAWAI’s website, and ultimately to authorized dealers.

Such brand storytelling achieves sustainable, long-term impact “only” when supported by intrinsically high-quality products. In KAWAI’s case, its strong performance in the 2025 Chopin Competition serves as compelling evidence of its underlying excellence, requiring little embellishment.

In conclusion, the European market—central to KAWAI’s future growth—is highly competitive and demands a clear and credible value proposition that meets the expectations of professional users. Our discussion confirmed that KAWAI’s digital marketing strategy, a key pillar of the Ten-Year Plan, is beginning to gain meaningful traction even in this challenging environment. We believe these efforts will translate into gradual gains in market share, enhanced brand value, and improved profitability, ultimately contributing to long-term corporate value creation.

In addition to the increased adoption of KAWAI instruments in the Chopin Competition, the Company’s presentation materials titled “A 100-Year Brand Recognized Worldwide (only in Japanese),” available on its website, provide further evidence—albeit in a modest narrative—of the brand’s steady penetration into the global top tier. As highlighted on page 5 of the materials, KAWAI’s full concert grand pianos, including the Shigeru Kawai and Kawai GX series, have already been installed in leading international concert halls and music conservatories, such as Opéra national de Paris, and The Juilliard School

(Source: KAWAI Website)

As a very committed shareholder supporting KAWAI’s growth, and more precisely, as a “close yet tough friend,” we will continue to engage with KAWAI in a constructive dialogue in its journey to maximize its corporate value.

This post does not constitute a proposal, solicitation, marketing communication, advertisement, inducement or representation in respect of any service or product, nor does it constitute advice to buy or sell any investment product or any investment of any kind, or a recommendation to purchase or sell any investment product, make any investment, execute any transaction, or refrain from taking any other action, whether or not any terms are described. It also does not constitute an opinion regarding the merits of any particular investment or investment strategy. Any examples of strategies or transactions are provided solely for illustrative purposes and do not indicate any past or future strategy or performance, nor do they indicate the likelihood of success of any particular strategy. This post does not constitute investment, financial, legal, tax, or any other advice.

This post presents our assessments, estimates, and opinions regarding the business of Kawai Musical Instruments Manufacturing Co., Ltd. (“KAWAI”) and KAWAI group companies.
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We do not intend, either by ourselves or through other shareholders, to propose at a general meeting of shareholders of KAWAI that the business or assets of KAWAI or KAWAI group companies be transferred to a third party or discontinued. We also have no intention of engaging in any conduct whose purpose would be to make it difficult for KAWAI or KAWAI group companies to continue conducting their businesses in a stable and ongoing manner.

We currently beneficially own and/or have an economic interest in securities of KAWAI and/or KAWAI group companies, and may continue to beneficially own or have an economic interest in such securities in the future. With respect to our investment in KAWAI and/or KAWAI group companies, we may, on an ongoing basis and depending on various factors — including the financial condition and strategic direction of KAWAI and KAWAI group companies, the results of discussions with KAWAI and KAWAI group companies, overall market conditions, other investment opportunities available to us, and the possibility of purchasing or selling securities of KAWAI and KAWAI group companies at prices at which we desire to transact — at any time, including through open-market or private transactions after we have established a position, buy, sell, cover, hedge, or otherwise change the form or substance of our investment, including securities of KAWAI and KAWAI group companies, in any manner permitted by applicable laws and regulations, and we expressly disclaim any obligation to notify others of any such changes. We reserve the right to take any actions we deem appropriate in relation to our investment in KAWAI and KAWAI group companies. Such actions may include, but are not limited to, communications with the board of directors, management, or other investors.