Pioneer Corporation Business Report FY2009
Business Highlights
Financial Overview |
(in millions of JPY) |
FY2009 | FY2008 | Rate of change (%) | Factors | |
Overall | ||||
Sales | 438,998 | 558,837 | (21.4) | - |
Net income | (58,276) | (130,529) | - | - |
Car electronics business | ||||
Sales | 251,060 | 293,501 | (14.5) | -Sales of car navigation systems for the OEM market decreased mainly in Japan and North America. -Although sales of car audio systems for the OEM market increased in Japan and China, they decreased overall for the year. |
Operating income |
(7,274) | (12,337) | - | - |
Financial Alliance Formed with Honda
-The Company announced that it has finalized the payment date on March 23, relating to the already announced issuance of new shares through a third-party allotment to Honda Motor Co., Ltd. In its core business of car electronics, the Company will promote the OEM business with Honda. 14,700,000 shares of common stock will be issued to Honda to raise 2,481,250,000 yen, which will be applied to R&D expenses as operating funds. After the issuance, Honda will be the second largest shareholder of Pioneer with 4.50% shareholding ratio, after Sharp Corp. with 9.19%. (From an article in the Nikkan Jidosha Shimbun on Mar. 8, 2010)Business Reorganized
-The Company announced that it will move its head office from Meguro Ward, Tokyo to its existing office in Saiwai Ward, Kawasaki City, Kanagawa Pref. Operation at the new headquarters will begin on Nov. 24, 2009. With this move, the company will complete its project to integrate its five main operating bases in the Kanto region into two locations, namely to Kawasaki City and Kawagoe City in Saitama Pref. The current headquarters facility in Tokyo is scheduled to be sold off after the transfer. (From an article in the Nikkan Jidosha Shimbun on Nov. 6, 2009)-The Company announced reorganization of the company Group. Through disaggregation for absorption and merger of its subsidiaries, it aims to streamline its business operations. As for domestic sales of car electronics, a sales department of the Company's headquarters and a subsidiary will be merged. For home electronics and other products, sales departments of the headquarters will be consolidated with sales subsidiaries and others. Moreover, two subsidiaries will be merged into the Company for more efficient operations of the headquarters and indirect departments. (From an article in the Nikkan Jidosha Shimbun on Aug. 7, 2009)
-The Company has newly established the "general market sales division" and "OEM (original equipment manufacturing) division" in the Mobile Entertainment Business Group as part of its organizational change, effective Apr. 16, 2009. In order to quickly respond to the growth-expected car electronics market, the company has thus reorganized its in-vehicle device business, based on these two divisions. The "new business development office" has also been established to discover and nurture new businesses in the area of in-vehicle devices. (From an article in the Nikkan Jidosha Shimbun on Apr. 18, 2009)
Recent Developments Outside Japan
-The Company announced that it has reached a cross-license agreement with Honeywell International Inc. in the area of automotive and portable GPS navigation devices. The agreement gives them the right to use each company's patented technologies in the field. Although the Company filed a complaint against Honeywell in the U.S. in Nov. for infringing the Company's navigation patents, this agreement will terminate the matter. (From an article in the Nikkan Jidosha Shimbun on Dec. 21, 2009)-The Company and Shanghai Automotive Industry Corporation (Group) (SAIC) announced that they have established a joint-venture company for the purpose of expanding their car navigation business in China. The new company, Anyo Pioneer Motor Information Technology Co., Ltd., will provide OE car navigation systems and establish traffic information systems for the Chinese market, aiming to generate more than 1.5 billion yuan in sales in the fifth year. In the medium- and long-term perspective, it will work on establishing an extremely low cost car navigation device. Anyo Pioneer Motor Information Technology, which will be headquartered in Shanghai, will be capitalized at 90 million yuan, with 51 percent invested by the SAIC Group and 49 percent by Pioneer China Holding Co., Ltd. Functions of the joint-venture company will include planning, development, and distribution of car navigation products in China, which will be combined with the Company's manufacturing, software development, and map database editing capabilities, fully covering operations required for leading the car navigation market in China. (From an article in the Nikkan Jidosha Shimbun on Dec. 10, 2009)
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
Medium-term Business Plan |
(in millions of JPY) |
FY2012 | FY2011 | FY2010 | |
Overall | |||
Sales | 480,000 | 570,000 | 630,000 |
Operating income |
17,000 | 27,000 | 30,000 |
Net income | 11,000 | 18,000 | 21,000 |
Car electronics business | |||
Sales | 277,000 | 330,000 | 354,000 |
Operating income | 14,000 | 18,500 | 20,000 |
-The Company announced a medium-term management plan through Mar. 31, 2012 to undertake full efforts on restructuring measures. The company will work to build stronger operations for the car electronics business as a core business through enhanced alliance with automakers and other companies. To streamline the Group, it will force through structural reforms, including reorganization of operational bases and personnel downsizing. The Company aims to raise the ratio in the sales amount by the car electronics business to over 80% in the fiscal year ending Mar. 2012, from approx. 60% in the fiscal year ending Mar. 2009. (From an article in the Nikkan Jidosha Shimbun on May 2, 2009)
R&D
R&D Expenditure |
(in millions of JPY) |
FY2009 | FY2008 | FY2007 | |
Overall | 35,977 | 54,790 | 59,395 |
Car electronics business | 18,500 | 25,642 | 22,705 |
R&D Structure
-The Company announced that it will establish a new R&D center, which will consolidate its technical development functions. The Company's existing Research Center and the Development Center under the Technical Development Division will be abolished, with their operations planned to be transferred to the new facility. The change is part of the Company's structural reorganization initiatives intended to establish a leaner and more flexible business framework. (From an article in the Nikkan Jidosha Shimbun on Apr. 2, 2009)Product Development
Photoremo@Navi Ver1.0-The Company and Sharp Corporation announced that they have jointly developed the Photoremo@Navi Ver1.0, a new data standard for communications between mobile phones and car navigation systems. The Photoremo, which was named based on the "remote control by photo (images)"concept, enables transfer of images in JPEG format with additional control information. The two companies intend to employ the versatile JPEG system to make communication between a wider range of digital equipment possible. The new development adds cutting-edge technology to the Company's car navigation products, while marking Sharp's first entry into the in-vehicle electric equipment business. The two companies look to market the Photoremo@Navi program to other car navigation suppliers as well. (From an article in the Nikkan Jidosha Shimbun on Apr. 15, 2009)
Car navigation systems
-The Company launched a car navigation system equipped with a terrestrial digital broadcasting demodulator LSI that improved performance in terms of achieving better reception. This was made possible by developing proprietary data complement technology.
Investment Activities
Capital Expenditure |
(in millions of JPY) |
FY2009 | FY2008 | FY2007 | |
Overall | 22,750 | 49,795 | 38,527 |
Car electronics business | 14,615 | 29,774 | 18,515 |
New Facilities (Car electronics business)
(As of Mar. 31, 2010)
Name | Location | Type of facility | Planned total investment amount (in million JPY) |
Starting month | Planned completion |
Kawagoe Plant | Saitama, Japan |
Production facilities for car electronics products, Sales of software |
13,991 | Mar. 2010 |
Mar. 2011 |
Tohoku Pioneer Corp. | Yamagata, Japan |
Production facilities for car electronics products | 787 | Apr. 2010 |
Mar. 2011 |
Increment P Corp. | Tokyo, Japan |
Map soft etc. | 1,715 | Apr. 2010 |
Mar. 2011 |
Pioneer Manufacturing (Thailand) Co., Ltd. |
Ayutthaya, Thailand |
Production facilities for car electronics products | 1,493 | Apr. 2010 |
Mar. 2011 |
Pioneer Technology (Shanghai) Co., Ltd. |
Shanghai, China |
Production facilities for car electronics products | 509 | Apr. 2010 |
Mar. 2011 |
Pioneer Electronics (Shanghai Export Zone) Co., Ltd. | Shanghai, China |
Production facilities for car electronics products | 1,775 | Apr. 2010 |
Mar. 2011 |