Panasonic who got out of the low margin TV market, is now moving to sharpen its focus and improve profitability especially in the premium appliances and emerging battery market, they have also moved to restructure their holding operation.
According to Paul Read the CEO of Panasonic Australia the local operation which has just finished their financial year, has seen growth in both the appliance air conditioning markets during the past year with segments such as Personal Care also delivering growth.
The global restructure announced at an online news conference will see Panasonic shifts to a holding-company model designed to give each business unit more autonomy, allowing them to use their own discretion in key business decisions and, crucially, to move more quickly.
According to Read the move will benefit the local operation that is also seeing growth in the personal care market, where Panasonic sells premium hair curlers, shavers, and hair dryers as well as electronic toothbrushes.
Globally Panasonic executives have set aside $6.4 billion for “growth areas” such as automotive batteries, supply chain software and air-conditioning they have also set aside $1.2B for investment into new technologies such as hydrogen energy and workplace digitisation as well as an expanded range of premium appliances.
Panasonic CEO Yuki Kusumi said that these are strategic investments to be undertaken by Panasonic as a group and that each business unit will be allowed to invest separately in new business opportunities.
The company said that the restructure would lead to a “significant jump in profitability”.
The business is looking to achieve a A$16-billion-dollar profit for fiscal years 2022 through 2024.
Kusumi has said that reorganizing into a holding company is not aimed at cost-cutting or restructuring, but as a way to enable each unit to exercise greater initiative.
According to Read the local business was disrupted last year due to COVID and supply issues.
“While we have plants in Thailand Vietnam parts manufactured in China are still key to the business and the latest lockdowns in China could create further problems” he said.
As part of the restructure Panasonic will pool the resources of the units for larger initiatives, such as an expansion of battery production for Tesla electric vehicles and in the manufacture of appliances and air conditioners where the Company is witnessing profitable growth.
Last month, Japanese media reported that Panasonic is looking at billions of dollars of investment in the U.S. to mass-produce the 4680, a new battery that promises to increase the range of Tesla cars and make them more affordable.
Under former CEO Kazuhiro Tsuga, Panasonic withdrew from areas such as semiconductors, LCD panels and solar panels.
Kusumi is expected to shift the company’s priority from restructuring to growth once again.
Panasonic also plans to raise its profile in overseas markets.
In Asia and Asia Pacific, the company will replicate the online marketing and low-cost production system it has developed for the Chinese market for the rest of the region, Kusumi said.
They also plan to build on its strength in air conditioners and air purifiers in markets such as Australia, while also developing a network for marketing, installation, and maintenance services.
