Panasonic said on Friday that it would take three more years to reach the strategic goals it set in 2007 as president Fumio Ohtsubo said that Japan’s largest electronics group had been “lacking in terms of agility”.
The company’s new strategic plan for the year to March 2013 set the same targets – sales of Y10,000bn ($109bn) and a 10 per cent return on equity – that it was meant to hit last year. Panasonic, which recently took majority control of rival Sanyo Electric, reported sales of Y7,418bn and made a net loss of Y104bn.
Panasonic’s struggle to meet its goals shows how badly the Japanese electronics industry has suffered from the global recession and low cost Taiwanese and Korean competition.
Mr Ohtsubo signalled a further shift in Panasonic’s focus away from consumer electronics and towards more stable industrial businesses. He said that energy would be Panasonic’s “flagship” business and set a target of 16 per cent annual sales growth for its lithium-ion batteries, solar panels and other green energy products.
The company‘s plan calls for rapid sales growth in emerging markets. This year, Panasonic expects China to overtake the US as its largest overseas market, and it will set up new centres to research consumer tastes in India and Brazil.
Mr Ohtsubo also said that synergies from the deal with Sanyo would increase their annual operating profits by Y80bn. Panasonic owns more than 50 per cent of Sanyo but a large minority stake is still publicly listed.
He hinted that Sanyo’s struggling white goods business will be gradually absorbed by into Panasonic’s white goods business with plans to “integrate and unify development and production”. White goods are often cited as one of the segments of Japanese industry most badly in need of consolidation.
Panasonic’s recovery is set to be a long haul for shareholders. Mr Ohtsubo said that Panasonic intends to rebuild a cash pile depleted by losses and the Sanyo acquisition.
For the new financial year to March 2011 Panasonic predicted a rebound in sales and operating profits but net income of only Y50bn. That is below analyst estimates of more than Y100bn in net profits.
Toshiba also reported a much reduced net loss of Y20bn on Friday after its chip division swung back from Y280bn in losses a year earlier to make a small profit.
Get alerts on Industrial goods when a new story is published