The bigger issue is the inventory levels are up for the imaging group - anywhere from 35-50% over 2022 depending on the time period. Inventory has risen from 62 days to 77 days of sales. Increased inventory at a time when interest costs are rising is a concern. My guess is there is still a lot of EF-mount inventory - and the recent sales and promotions are to reduce that inventory.
Inventory can be at different levels. Canon would have 1) pre-process inventory which are the components (mostly from 3rd parties) prior to production. There is 2) work in Progress (WIP) inventory and then 3) post processing or finished goods inventory. Obviously, reducing all 3 is important for working capital reasons.
1) covid supply chain issues caused havoc with simple/cheap items causing bottlenecks for finished goods eg display driver chips for cars limiting sales. Forecasted sales and cancelled orders messed up big time then. Most Japanese suppliers have keiretsu/ just in time minimising pre-process inventory so overall production halted quickly. This should be mostly resolved now.
2) WiP should be low unless there is a long production cycle. Bodies especially should be low but maybe lenses have a long time with finishing/polishing of big expensive lens elements taking a lot of time. This could be an issue with a lot of new RF glass needing to work out production yield issues
3) Finished goods is tricky. There could be an excess of EF lenses from previous manufacturing runs and perhaps "last run" volume being higher than normal but these will decrease to zero over time now. Given the recent internet kerfuffel over discontinuation of EF-M then the internet echo chamber would be set to outrage if discontinuation of EF lenses were formally done before lots of new RF lenses (and maybe some 3rd party lenses).
There could be consignment stock where Canon owns the stock but located in local distributor/retailer. I suspect that this wouldn't be the case but could be wrong. Any stock within Canon locally (Canon Australia, Canon USA etc) would be recording in their financial figures.
Overall, a lot of new products (lenses in particular) are on backorder so they aren't the issue so I am guessing that there are either remaining component supply chain issues which Canon is happy to keep higher stock for the moment as they have been bitten before or perhaps production yield issues eg glass elements.
