Clarion Co., Ltd. Business Report FY2009
|(in millions of JPY)
|Rate of change (%)
|-In the Americas, sales increased in the OEM market, a market that the company started selling to for the first time last year. But in Japan and Europe, sales decreased in the OEM market. Sales in the general consumer market in Japan also were lower. As a result, overall sales decreased.
|-Income increased, thanks to successfully reducing fixed and variable costs through implementing structural reforms, reducing non-operating expenditures, and benefiting from positive foreign currency translation.
|-Income increased, as the Company recovered part of its development costs from its customers and reported a gain on fixed assets sold, and other gains.
|Automotive equipment business
|-In the general consumer market worldwide, both sales prices and volumes dropped. However, in the OEM market, both prices and volumes are showing signs of recovery, thanks to greater sales in the Americas and to governmental sales incentives for new car purchasers in several countries.
|-Although the Company reported a loss for operating income, it successfully reduced its fixed and variable costs through rationalizing its business operations.
Business Plan-The Company aims to push up its annual sales to 188 billion yen and operating profit margin to more than 5 percent by fiscal year 2011, which is the target year of its new three-year medium-term business plan. The plan calls for the company to step up its structural reforms in order to slash both fixed costs and variable expenses. In order to improve cost efficiency, the company will curtail its global production capacity by 30 percent. Based on the initiative, it will integrate its domestic production operations into its Koriyama Plant (Fukushima Prefecture) by transferring the function of its Mito Plant to this facility. The project, which is already in progress, is scheduled to be completed by December 2010. The company is also discussing consolidation of its production operations in Asia. In addition to freezing its new plant project in Thailand, the company has temporarily suspended operations or reduced working hours at some of its production lines at home and abroad. At the same time, the Group will further accelerate its personnel downsizing project with a target of cutting down its workforce to approximately 9,000 from 12,000. In the area of development, Clarion will focus on engineering common car navigation platforms so as to enhance its development efficiency. (From an article in the Nikkan Jidosha Shimbun on May 23, 2009)
-The Company has embarked on increasing production of its car navigation systems, because it is receiving surging orders from its leading customer, Nissan Motor for dealer installation in the Japanese domestic market and Ford for the North American market. This surge in demand is in contrast to the efforts the company has been continuing to cut back on production capacity by 30 percent from the level before the financial crisis as part of restructuring to streamline the operation. The function of the Mito Plant in Ibaraki Prefecture, one of main production sites, is now being consolidated to the Koriyama Plant in Fukushima Prefecture. As a contingency plan, production will be resumed at Mito to keep all the production facilities for car navigation systems almost in full operation. (From an article in the Nikkan Jidosha Shimbun on Aug. 31, 2009)
-The Company announced on February 16 it will produce car navigation systems for the Latin American market at its subsidiary in Mexico starting in August this year. Due to elimination of Brazilian import duties from Mexico, as well as integration of navigation and audio systems, Clarion expects substantial cost reductions will be realized. Production will be conducted at its Mexican subsidiary "Electronica Clarion S.A." at a pace of 3,000 sets a month. (From an article in the Nikkan Jidosha Shimbun on Feb. 17, 2010)
Contracts-The Company announced on Aug. 3, 2009 that it has supplied 2DIN SSD (solid state drive) AV-Navi system, its built-in navigation system with embedded semiconductor memory, to Mitsubishi Motors Corp. mini cars including the i-MiEV electric vehicle, eK wagon, eK SPORT and TOPPO. (From an article in the Nikkan Jidosha Shimbun on Aug. 4, 2009)
-The Company is supplying its touchscreen navigation systems as factory-installed units to MMC Automotores do Brasil Ltda., a local production and sales company affiliated with Mitsubishi Motors Corporation, beginning in late November, the company said on November 30, 2009. They will be installed on the Pajero Full and Outlander models. (From an article in the Nikkan Jidosha Shimbun on Dec. 1, 2009)
-The Company developed a CD player with a 4.3-inch monitor display device and began its OEM supply to four Suzuki models including the "Wagon R," the company said on December 24, 2009. The Company has been supplying the device for the Suzuki Palette as a factory-installed standard equipment since September. In addition to the Wagon R, it is now available as dealer option on the Lapin, Every and the new Alto. (From an article in the Nikkan Jidosha Shimbun on Dec. 25, 2009)
-The Company announced that it will start full-scale production of its original car audio systems required from Tata Motor Limited for the ultra low-cost Nano. (From an article in the Nikkan Jidosha Shimbun on Jan. 27, 2009)
>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)
|(in millions of JPY)
Recent Activities(1) The Company worked on developing parking and driving assist systems that incorporate onboard cameras.-Also, the Companydevelopedtechnology to process images displayed overhead,namingthis technology ASIC(Application Specific Integrated Circuit) for overhead view monitors (OVMs).
-The Company is developing new in-vehicle cameras, which are capable ofcapturing images that cover anarea of more than 190 degrees wide. Inaddition, the Company is developing technology to detect approaching objects in order to support saferdriving at blind corners.
-In the future, the Company will make its in-vehicle cameras: (1) CMOSsensor-based, (2) more compact,and (3) lower cost. It plans to combine these features with imagerecognition technology developedby Hitachi, so as to enhance its technologicalcapabilities in the area of ITS andassist vehicleparking andpromote saferdriving.
(2) For superior sound in onboard devices, the Company is developing the following:-Automatic volume control, which automatically sets the optimal volume of sound.
-Technology to improve and correct sound quality when compressed audio sources are played.
-Technology to tune the volume and frequency of sound, so as to provide higher quality sound that best matches the properties of the speakers being used and the auditory perception of the human ear.
(3) IVCS・Car Navigations
-The Company is adding more multifunctional features such as a Google internet search link and an ECO driving assist system to its navigation systems.
-The Company will accelerate development of a car navigation system designed exclusively for electric vehicles (EV). For the EV car navigation system, features different from those for gasoline and hybrid vehicles are required. Especially supply of the latest data concerning the cell management and charging stations, which affect the driving distance, is essential. A communication function such as those for cell phones and personal computers, therefore, should be integrated in the EV car navigation system and Clarion is working toward establishment of an always-connected system. EVs' travelling features are also different from those of gasoline and hybrid vehicles. Clarion, therefore, has begun to work toward establishment of a new route guidance system suitable for efficient travelling of electric vehicles. (From an article in the Nikkan Jidosha Shimbun on Sep. 14, 2009)
-The Company is expanding investment in the onboard camera and image treatment sector. Expenditures for this sector, which account for 2 percent or less than 500 million yen among the total development budget in the current fiscal year, will be raised to 10 percent or approximately 2.5 billion yen in fiscal 2013. The increase is in response to rising global trends for compulsory installation of cameras on a vehicle to assist driving safety. The company is already conducting joint development of products with several companies including automakers under contract of original equipment manufacture by the brand of customers. (From an article in the Nikkan Jidosha Shimbun on Nov. 11, 2009)
(As of Mar. 31, 2010)
|Outline of tie-ups
|licensed patent on manufacturing optical disc players
|Dec. 1, 1994
to the patent expiry date
|Vehicle Information and Communication System Center
|license on the use of VICS technical information
|Nov. 28, 1995 -
expiry date agreed by two parties
|(in millions of JPY)
-Installing additional equipment to increase production capacity; and purchasing new dies to cope with model changes at its plant in China.