Pioneer Corporation Business Report FY ended Mar. 2017
Financial Overview
(in million JPY)
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of change (%) | Factors | |
| Overall | ||||
| Sales | 386,682 | 449,630 | (14.0) | -Sales were lower due to lower product deliveries of car-electronics products to the OEM market and the effect of negative currency translation because of the high valuation of the yen. |
| Operating income | 4,167 | 7,304 | (42.9) | -Operating income was lower because of lower sales volumes, even though the Company made costs improvements and the effect of currency translation actually reduced sales expenses and general expenses. |
| Ordinary income | 2,966 | 7,250 | (59.1) | |
| Net income | (5,054) | 731 | - | -The Company posted a net loss of JPY 3,014 million as an extraordinary expense due to expenses it incurred to improve its operating structure outside Japan. |
| Car electronics business | ||||
| Sales | 312,489 | 357,842 | (12.7) | 1) |
| Operating income | 6,051 | 8,581 | (29.5) | - |
Factors
1) Sales by product
-Sales in the consumer market increased year-over-year (y/y) due to higher sales in China, although sales were lower in Japan.
-Sales in the OEM market increased y/y due to higher sales in Southeast Asia and China, although sales were lower in Japan and North America.
-Sales in the consumer market decreased y/y especially in emerging countries.
-Sales in the OEM market increased y/y due to higher sales in Japan and North America.
Out of all sales of car electronics products, OEM sales increased from 60% the previous year to 58%
Recent Development Outside Japan
-The Company will start activities to improve profitability for its car electronics operations. It will seek an improved model mix by actively introducing high value-added models like new aftermarket products equipped with car audio systems or advanced driver assistance systems. In its operations targeting OEMs, Pioneer will review business processes to improve profitability and strengthen promotion of its advanced technologies in an effort to acquire new orders. The company plans to increase the ratio of operating profit to net sales in its car electronics operations for this fiscal year by 1.4 points to 3.3% from the result of the previous year. (From an article in the Nikkan Jidosha Shimbun on May 19, 2017)
-The Company will launch its first 10V type car-use navigation system in September 2016, which the company is aiming to use as an impetus to expand its share in the minivan navigation market. Minivan users tend to choose large monitors that are easy to read and use according to the size of the vehicle. Pioneer will strengthen its product lineup for minivans, and differentiate its products from competitors with their high navigation performance. The company will strengthen the appeal to its "Carrozzeria" brand users, and enhance advertisement in the minivan navigation market. Industry members will be watching to see how much Pioneer can increase its market share against leading competitors. (From an article in the Nikkan Jidosha Shimbun on May 17, 2016)
Contracts
-The Company announced that its sound systems featured as original equipment on new LEXUS LC. The system features an 8-channel full-digital Class-D amplifier and 12 newly developed speakers. (From a press release on December 12, 2016)
Business Partnership
-The Company announced that it has agreed with HERE, a German digital map maker, to perform verification tests for building a "data ecosystem" that enables the efficient update and maintenance of map data for automated driving by utilizing Pioneer's 3D-LiDAR driving space sensor. The companies will integrate 3D-LiDAR with HERE's high precision maps for automated driving and begin from vehicle localization. Pioneer will utilize high-precision vehicle localization technology together with its 3D-LiDAR driving space sensor to identify data required for updating automated driving map data. HERE will collect and analyze sample data (sensor data, etc.) by utilizing cloud computing with its high precision automated driving maps. Based on this the companies will investigate practical realization of mechanisms for transmitting updated map data to vehicles. (From an article in the Nikkan Jidosha Shimbun on May 19, 2016)
-HERE, a Netherlands-based open location platform company, and Pioneer Corporation announced their intention to enter into a strategic partnership to enable industry-leading global mapping solutions and next generation location-based services for the automotive and other industries. By linking their complementary mapping and automotive technologies and assets, HERE and Pioneer plan to enable fully integrated global SD (standard definition) and HD (high definition) mapping solutions at a scale and quality-level unmatched in the industry. These solutions are intended to support customers in various industries where location intelligence can be applied. The two companies are also exploring the development of new services that harness the real-time data of connected Pioneer devices. (From a press release on February 8, 2017)
Established Joint Venture with Konica Minolta
-The Company and Konica Minolta, Inc. announced that they will establish a joint venture for organic electroluminescent (EL) lighting panels in May 2017. The two companies' product development and sales functions will be merged into a new company, "Konica Minolta Pioneer OLED, Inc." Certain high-grade vehicles have started to use organic EL lighting panels for tail lamps. Organic EL lighting contributes to energy efficiency, and is expected to be increasingly in demand in the automotive market. The joint venture will enhance product competitiveness by utilizing the two companies' know-how to increase order intake and achieve sales of JPY 25 billion in the medium and long term. Pioneer has dissolved its tie-up for the organic EL lighting business with Mitsubishi Chemical Corporation. The joint venture will be capitalized at JPY 490 million, and be owned 50/50 by the two companies. It will aim to achieve growth with its business centered on automotive lighting. (From an article in the Nikkan Jidosha Shimbun on February 1, 2017)
Mid-term Business Plan (April 2016 - March 2021)
-Growth strategy with a focus on the consumer market business, OEM business, and map business and autonomous driving field
Consumer market business
-In order to maintain high profitability through sustainable growth in sales and to establish a connected car life as soon as possible, the Company will actively develop value added products like smartphone-linked products and advanced driver assistance systems, release new in-vehicle entertainment systems, expand services for businesses by connecting to the cloud, and enhance the lineup of low cost products targeted at emerging markets.
OEM business
-In order to accommodate a large scale of orders from existing customers, the Company will optimize its business process as a whole. It will also attract new customers by developing and designing products in anticipation of customer needs to improve profitability.
Map Business and Autonomous Driving Field
-In the autonomous driving field, the Company will strive to become an "essential company toward realization of autonomous driving" by making use of its ability to provide both "3D-LiDAR" sensor and high-precision map data, necessary for autonomous driving, and by taking advantage of its alliances.
-The Company announced its new mid-term plan for the five years through fiscal year 2020 (ending in March 2021). Pioneer will promote growth strategies in its car electronics operations, centering on the consumer market and OEM businesses. It will also concentrate resources on its high precision map business and related technologies required for autonomous driving. The company aims to increase its sales by 13.4% from the FY 2016 level to JPY 510 billion, and its operating profit margin to 6% or greater in FY 2020. Under the new plan, Pioneer seeks to become a leading company in "Comprehensive Infotainment" that creates comfort, excitement, reliability, and safety in vehicles by promoting strategies suited to the properties of its consumer market and OEM businesses. Moreover, Pioneer will focus on its map business and autonomous driving field business as one of its three business pillars as it anticipates growing demand for advanced driving assist systems. (From an article in the Nikkan Jidosha Shimbun on May 20, 2016)
Forecast for FY ending March 2018
|
(in millions of JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ended Mar. 31, 2017 (Actual Results) |
Rate of Change (%) |
|
| Sales | 390,000 | 386,682 | 0.9 |
| -Car electronics | 322,000 | 312,489 | 3.0 |
| Operating income | 10,000 | 4,167 | 140.0 |
| Ordinary income | - | 2,966 | - |
| Net income | 3,500 | (5,054) | - |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 23,863 | 24,804 | 28,196 |
| -Car electronics | 17,733 | 17,807 | 16,470 |
-R&D expenditure for FY ending March 2018 is expected to reach JPY 25,000 million
R&D Facilities
| Name of Facility | Location |
| Research & Development Division/Verification Laboratory | Kanagawa Pref., Japan |
| Research & Development Division (Kofu) | Yamanashi Pref., Japan |
| Research & Development Division in Tohoku Pioneer Corp. | Yamagata Pref., Japan |
| R&D Division, Pioneer China Holding Co., Ltd. | Beijing, China |
R&D activities
(1)Technology Capable of Predicting Driving Behavior
-Technology that predicts driving behavior is able to foresee drivers’ and occupants’ behaviors in advance. This is achieved by the technology’s combining various road conditions that are constantly changing, based on information it remembers about various behavior patterns, weather patterns, and driver patterns. This technology identifies various past conditions such as individual drivers’ particular driving histories and situations that have occurred in the past both inside and outside the vehicle.
-Without the driver needing to operate any onboard devices, this technology automatically provides optimal information and services at the appropriate timing. For example, based on the driver’s and occupant’s past patterns, it can automatically predict destinations and arrival times, select travel routes to avoid traffic jams, and even select often played music. In addition, since it can predict what to do such as enlarging and reducing car-navigation-system maps based on drivers’ usual behavior patterns, it reduces the need for drivers to operate devices themselves.
-In order to further improve the accuracy of predicting driving behavior, this technology makes use of machine learning.*
* Machine learning is technology that learns by repeatedly remembering stored data and identifying specific patterns.
(2) Image-recognition Technology
-Image-recognition technology is capable of predicting human cognition and judgments that are made possible through human vision.
- The technology can predict and determine road conditions such as traffic jams that it recognizes based on the areas and order of things that people focus on when they look ahead in front of traveling vehicles.
- When the driving-behavior prediction technology mentioned above is added to this technology, this image-recognition technology can more accurately predict road conditions.
Developed System to Detect Sleeping at the Wheel
-The Company will commercialize a system that detects driver drowsiness and sends alerts with a vibration unit integrated in driver's seats. The company currently offers it to car seat manufacturers as an advanced driver assistance system that includes heart rate sensors. Major automakers are planning the practical use of level 3 autonomous vehicles (autonomous driving except in emergencies), where smooth changes from autonomous to manual driving are required. Pioneer is aiming to win early orders of the system as a human–machine interface as well. (From an article in the Nikkan Jidosha Shimbun on January 17, 2017)
-The Company announced that it has developed a Driver Monitoring System that detects levels of driver drowsiness based on changes in heart rate and improves their alertness. The system will be introduced to the market in 2020 or later. The company expects that it will be used to prevent drowsy driving and a smooth shift from automated driving mode to manual mode at level 3 automated driving (manual driving only in emergency situations). The system is being developed to prevent deterioration of drivers’ alertness by linking technologies that detect the signs of drowsiness through heart rate measurement and original analysis algorithms, with effective technologies that improve levels of alertness through vibrations. Focusing on the fact that signs of drowsiness can be detected early by the heart rate and the pulse, Pioneer is developing algorithms that identify signs of drowsiness by taking into account heart rate sensors built into the seats or the steering wheel and the sensor precision in the in-vehicle environment. By considering the fusion of sensors with cameras in the future, the company will strive to provide more precise and comprehensive functions to detect drowsiness. (From an article in the Nikkan Jidosha Shimbun on December 19, 2016)
-The Company announced on April 25 that Pioneer China Holding Co., Ltd. (Pioneer China), a Chinese subsidiary of Pioneer, has developed a drowsiness detection unit capable of detecting when a driver becomes sleepy. The new unit offers high-accuracy detection, and Pioneer is aiming to deploy this technology in advanced driver assistance systems (ADAS). Pioneer China developed the new unit using technologies developed by Suzhou Tsingtech Microvision Electronic Technology Co., Ltd. (Tsingtech Microvision), a venture company established under the Tsinghua University Suzhou Automotive Research Institute in China. Pioneer China and Tsingtech Microvision have been jointly developing next-generation in-vehicle equipment. The new unit detects the drowsiness of a driver with high accuracy by confirming how the steering wheel is operated, and utilizing unique image recognition technologies and analysis based on a drowsiness detection algorithm. (From an article in the Nikkan Jidosha Shimbun on April 27, 2016)
Developed Cloud-based Vehicle Assistance System
-The Company announced that it will start the Automated Safety Consulting service from November 30, 2016. As safe driving management solution, this service is a version strengthening the Vehicle Assist’s feature to reduce car accidents. The Vehicle Assist is a crowd driving management service and has in-vehicle devices and servers which analyze driver’s performance and sound a warning or send e-mails toward danger driving performance. The Automated Safety Consulting service provides this facility and an additional new reporting facility once a month, the Safe Driving Management Assist which shows instruction points enabling to understand at a glance. (From a press release on November 29, 2016)
Developed Accident-risk Prediction Platform
-The Company announced that it has developed the Intelligent Pilot. The Intelligent Pilot is an aftermarket ADAS solution, built using constantly connected IoT device and Pioneer’s accident risk prediction platform. This platform uses Pioneer’s original map-based predictive technologies by using weather data, driving trend data, probe data such as places where drivers tend to slow down suddenly causing near accidents. This new system offers warnings based on the individual situation of each driver at the appropriate place and time, enabling personalized advanced driving support. Pioneer will propose practical uses for these solutions to automobile-related service providers, keeping a close eye on overseas business development. (From a press release on November 25, 2016)
-The Company announced that it is launching WEB API service that will be compatible with its Vehicle Assist fleet management service. By using the new WEB API service and Pioneer's dedicated in-vehicle devices, customers will be able to access the various functions of the Vehicle Assist through their existing services. (From a press release on May 19, 2016)
Technology Licensing-in Agreement |
(As of Mar. 31, 2017) |
| Company (Location) |
Contract content | Period |
| Dolby Laboratories Licensing Corporation (USA) |
Licensing-in of patented technology to produce digital sound devices and noise reduction devices. | December 21, 1971 - until the expiration of the patent |
| MPEG LA, L.L.C. (USA) |
Licensing-in of patented technology to produce MPEG-2 video products | January 1, 1994 - December 31, 2015 |
Capital investment |
(in millions of JPY) |
| (FY ended March 2017) | (FY ended March 2016) | (FY ended March 2015) | |
| Overall | 21,952 | 25,426 | 32,586 |
| -Car electronics | 18,954 | 20,444 | 27,220 |
-In FY ended March 2017, the Company invested mainly in embedded software, dies, and manufacturing equipment.
-In FY ending March 2018, the Company plans to invest JPY 35,000 million in plants and equipment
Planned Capital Investments (Car electronics) |
(As of Mar. 31, 2017) |
| Name | Location | Type of facility | Planned total investment amount (in million JPY) |
| Headquarters | Tokyo, Japan |
Develop software for internal-use | 1,027 |
| Kawagoe office | Saitama Pref., Japan |
Manufacturing equipment for car electronics, software for sales, software for internal use, etc. | 21,223 |
| Tohoku Pioneer Corp. | Yamagata Pref., Japan |
Production facilities for car electronics products | 403 |
| Increment P Corp. | Kanagawa Pref., Japan |
Develop commercial software | 3,385 |
| Pioneer Manufacturing(Thailand) Co., Ltd. | Ayutthaya, Thailand |
Facilities to manufacture car-electronics products; and dies | 1,891 |
| Tohoku Pioneer(Thailand) Co.,Ltd. | Ayutthaya, Thailand |
Facilities to manufacture car-electronics products; and dies | 523 |
| Tohoku Pioneer(Vietnam) Co.,Ltd. | Haiphong, Vietnam | Facilities to manufacture car-electronics products; and dies | 950 |
| Pioneer Technology(Shanghai) Co., Ltd. | Shanghai, China |
Production facilities for car electronics products | 532 |
| Pioneer do Brasil Ltda. | Manaus, Brazil |
Production facilities for car electronics products | 1,090 |