"Different from big audio companies, Rotel doesn't have to suffer the numbers guys, the bankers," Peter Kao tells me, "we don't risk having to change our processes to hit sales targets. Our strength is that we can focus on what we do well and remain strategic in order to reach long term goals." To many hi-fi enthusiasts, this might sound a bit corporate, but the man who runs Rotel makes a very important point – one that cuts to the very heart of the company's history, tradition and identity. Unlike many larger Japanese names, Rotel is a family-owned business controlled by a trim team outside of the mainstream. Instead, Rotel has done things very differently – and under Peter's stewardship, will continue to do so.

Rotel Factory, Tokyo Japan. Circa 1960s

Rotel is a truly multi-national company, so is a bit complex to pinpoint its roots. "The brand is Japanese, the factory is in China, and the family is originally from Taiwan," Peter tells me. "My great-uncle who founded the company was Tomoki Tachikawa, a Taiwanese Japanese. Our first factory was in Tokyo, Meguro-ku. We then moved our factory to Taiwan in the late seventies, before moving to China."

The brand's Global Technology Officer, Daren Orth, adds: "The key is that the family owns the trademark. We're very proud of our Japanese roots but the business has evolved to be an international company. Because it's a family-run company, we're not limited to shareholders specific to a public board or to a private equity firm or tied to targets just specifically for the sake of targets. That has given us the flexibility to really tune and refine the business itself. The Rotel brand is targeted to different markets based on market conditions, and we do adapt and evolve – building products that aren't just an on trend shotgun, aiming for the comfortable middle."

Rotel Factory, Circa 1973

Instead, Rotel has filled an interesting niche in audio for at least the past forty years. Think of it as a mass market manufacturer – with many of the economies of scale that confers – which focuses more on the specialist audio market. It's no giant Sony or Samsung, but nor is it a small 'cottage industry' maker with tiny sales numbers. Instead, it treads a carefully chosen path down the middle, in-between these two extremes. Resulting in the professionalism of products made by companies that produce in massive quantities, with the attention to detail in design and manufacturing that true hi-fi specialists can offer.

"Rotel has a very different feel than big Japanese companies", agrees Peter. "When you're that size you're looking at many layers of management and goals, often several levels removed from the end customer. For us, we work very closely to our customers, through social media and in our participation at audio shows, we have the opportunity to meet customers, distributors and dealers to hear their feedback. We're very close to the market and try to remain nimble to better serve our customers."

Rotel Michi Assembly Area - Present Day

He points to the company's recent Covid experience as an example of Rotel's fleet-footedness. "Even on the manufacturing side, nobody really knew what was going to happen when the pandemic hit. We were sure that there was going to be a parts shortage, as factories could be shut down the next day, so we took the risk to buy everything we needed to continue our production – ICs, components, etc. – and stored them in our warehouse! As a small company, we were able to be flexible and act quickly to prepare for this fragile unknown."

This means that Rotel can be more focused on its manufacturing side than many big audio brands in the industry, and concentrate on its customers. Indeed, self-determination, control and sustainability are central strands of the company's ethos. That's what has led Rotel to operate its own factory in China where it has complete control, whereas many rival brands outsource the manufacturing side to third-party OEMs. Rotel, by contrast, actually started as an OEM – so has always been at the 'coalface' of the manufacturing process. "My great uncle started the company in Japan in the 1950s, and had a factory in Japan making products for other brands. The Rotel brand started in 1961 in Japan", Peter tells me.

Assembly Line & Production, Circa 1970

His own personal story is very much tied up in this. He joined the company to learn the ropes at a junior level, and soon found himself at the forefront of the company's move to China. "I grew up in Hawaii," Peter says, "but I went to Japan to study the language in the 90's. I started working there back in 1996. It was a part time job for me, and I never thought I'd stay this long, but as I got more involved in the business, it became more interesting to me."

He continues: "When Rotel was setting up a factory in China, the family needed someone who was a trusted resource, and as I speak, read and write English, Japanese and Mandarin I was asked to manage the factory startup. So I stayed, and a lot longer than I thought I would. With that said, it's been very exciting for me, and a great experience to help Rotel develop in Asia as one of the first audio companies to do this – and now I've been here over twenty five years."

Rotel Baseball and Ping Pong Teams - Circa 1970

Daren Orth explains: "Rotel basically lifted everything but the physical building when we moved to China, and Peter was the guy who made daily trips from Hong Kong to Shenzhen to make it happen. That's quite a thing, and his family had that level of confidence in him to do that – to ensure the continuity of the business. When we moved from Shenzhen into our current factory in Zhuhai, we did essentially the same thing. The guy got over there and made it happen! Moving a factory is high cost and includes risk of disruption. The Rotel family had a growth strategy for the brand and high confidence in Peter moving the manufacturing facility, to ensure the business could scale. It worked, and continues to some twenty-plus years later."

Peter adds: "I found it intriguing at the time to see how it all works. When I first joined Rotel, I never knew how much work went into manufacturing something. There are so many parts, how do you keep track on all of them? This story is so important because we want people to know that we're different from other brands. For other Japanese brands, when it got too expensive to build their products, they just OEM'd everything out to other factories across the globe – but we always insisted on building our own products in our own factory. It was the only way to control the quality."

Peter says that you have to produce quality yourself. "You can't rely on someone else. We actually looked for more things to build – we wanted to learn that skill to build things ourselves. If there's a problem with the unit, we can almost always trace it back to some component on the PCB – so it has to be built very well with quality components. So we had to invest in our own surface mount machines, solder stations, high precision testing equipment and more rather than having someone else do it for us to ensure the quality meets the Rotel standard."

Rotel 5 Year Anniversary Celebration, Circa 1966

Interestingly, Daren points out that people regularly enquire with Rotel about original equipment manufacturing work. "We get people reaching out for OEM opportunities, but we don't win the bids because we're too expensive. When people come back to us and tell us this, we say 'thank you', because we're proud of our quality. It's a huge expense to operate a factory and manage the multiple teams required to manufacture audio equipment, and we are proud of our staff – some of whom have put twenty years of their lives into the brand."

He adds that it's about building products that do push the envelope a bit and challenge the norm. "We challenge the distributors to put the products in the market but positioned properly in the market. Each country is different, and this system allows us to have flexibility. And if there's something we want to do from a tech or channel standpoint, the fact that Peter is our leader and that we can make decisions really quickly helps the business."

Rotel has demonstrated this several times in the past. For example, when the brand first got into hi-fi in the late seventies, the company was famous for its huge, powerful, gadget-festooned amplifiers and stereo receivers – the more expensive examples of which had rack mounting handles, and were so heavy that they really needed them. Yet just a few years later, the market had changed, and Rotel with it – in the UK and beyond, the brand had great success with the RA-820BX, a humble, stripped-down slimline integrated amp that sounded great and was surprisingly affordable. Then, ten years later, Rotel reinvented itself again, and was now making inroads with its excellent Michi series of affordable high-end components.

Rotel Component Insertion Line, Present Day

Peter agrees. "We've always been very strong in hi-fi amplifiers, that's really what Rotel is known for, but in the late nineties the market shifted to home theatre products. We tried to stay away from these for a while, but the US market asked us to build receivers to compete with other major brands. As the process became more complicated, we didn't have the products, so we partnered with a Korean company in Seoul. For some time, Rotel had an engineering team in Japan doing traditional products, and an engineering team in South Korea designing AV products built in China."

He thinks that Rotel has been fortunate with the Michi series. "When we relaunched it, we wanted our sub-brand to be something like the relationship between Lexus and Toyota. When you look at the new Michi, you can tell it has its own brand, its own life. We want to take the strength of what people know Rotel for – which is big, powerful amplifiers – and leverage this strength into an even higher-performance market."

Having reviewed the Michi pre-power and X5 integrated, I can see why. The latter, I would suggest, is a sort of reinvention of the classic nineteen seventies Japanese muscle amp. "We try to stay close to what the brand is known for, power and quality – but nothing too flashy", says Peter. Daren adds that the hard part for the company's flagship range, when in the design stage, was to know when to stop. "Taking buttons off a product during the development process is hard, adding clutter without improving the user experience is easy. When you just start populating buttons on the front panel when they're all over the remote control, it's bad. It took a lot of work to ensure Michi ended up clean."

Rotel Michi - 1990s

INTO THE FUTURE

Daren says that Rotel's future success is based on continuing to steward the brand carefully. "Yes, we want to grow, but we do that by doubling down on what we do well," he adds. Peter agrees. "Looking ahead, our plan is to stick to what we know. For the last sixty years, Rotel has always provided great sounding products at an uncompromised value for the cost – and we'll stick to that. We're a family-owned business, without financial pressures or stakeholders to report to, allowing us to really focus on the customer's listening experience. Rotel has survived and prospered for over sixty years, and we'll do the same thing going forward."

This means that Rotel is going to focus even more clearly on two-channel hi-fi products going forward. "Recently we decided it may be the time to take a break from home theatre," he tells me. "We are competing with companies that are much bigger. There's also an issue with expensive licensing of digital home theatre formats, which is difficult and expensive for the smaller brands. This led us to focus on what we do best, what we're known for – high quality hi-fi products with powerful sound. We're always looking for something different, but not radically different, to our traditional market."

That's quite a statement to make because the home theatre friendly USA is easily Rotel's biggest market, followed by the European Union and the UK combined. "We're also strong in many Asian countries like Thailand, Singapore, and Malaysia, plus Australia, and have a fast-growing market in China. We do anywhere from 5,000 to 8,000 products per month", he reveals. Again, we see the company moving away from the 'jack of all trades, master of none' ethos that some of its rivals pursue. Instead, the future for Rotel is trying to scale up what it already does best. "We want to grow the business," explains Peter, "but not at a ridiculous pace. We will invest in the long term. That's our path, a niche that works for our boutique audio company, while expanding in the way that works for Rotel."

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