Matsushita Electric Industrial Co., Ltd. Panasonic Business Report FY2007

Business Highlights

Highlights FY2007 (ended Mar. 2008)

Financial Overview
(in million
FY2007 FY2006 Rate of
Sales 9,068,928 9,108,170 (0.4%) While sales increased in all the divisions, total sales decreased since the sales at Victor Company of Japan, Limited and its consolidated subsidiaries (the Japan Victor Group) became accounted for under the  equity method as of August 2007. As a result, their total annual sales were not fully included in the Company's FY2007 total sales.
519,481 459,541 13.0% The Company's operating income increased, thanks to sales increases in all divisions. (See "Sales" above regarding the status of the sales at the Japan Victor Group.) The Company also increased its sales through cost-cutting efforts, mainly targeting materials costs and fixed costs.
281,877 217,185 29.8% Net income increased due to decreased corporate tax, etc.
AVC Networks Division
Sales 4,319,594 4,064,111 6.3% Sales at the division increased year-on-year, thanks to strong sales of car electronics equipment and other products
252,239 220,080 14.6% Operating income grew year-on-year, supported by greater sales of car electronics equipment.

Business plan

Panasonic Automotive Systems Company (PAS) will study the possibility of establishing production bases in Russia and India. As more and more Japanese automakers and parts suppliers are expected to start manufacturing locally in the two markets, the electric system supplier will consider having its own local production capacity to supply mainly car electronics products on an OEM basis. From now, the company will conduct field surveys before making final decisions on when and where to set up the plants and what to produce. "Our first target is Russia," said one of the company executives. "We would like to materialize the plan in Russia in three to four years," he added. The establishment of plants in the two countries, when materialized, would each be the first production base for the company. India will be the second target for the company. PAS will proceed with the study on the country in parallel with the survey on Russia. (From an article in the Nikkan Jidosha Shimbun on Sep. 25, 2007)

Panasonic Automotive Systems Company (PAS) has started discussions on pulling out of the digital versatile disc (DVD) car navigation business. Since demand for DVD type navigation products is on the decline, the company intends to encourage consumers to switch to hard disk drive (HDD) type units. PAS will decide on its future production plans for DVD navigation systems according to demand trends, while maintaining the current volume of production over a year or so. As prices of HDD systems are falling and new, personal navigation devices (PNDs) that use flash memory are gaining popularity, it is possible that DVD navigation devices will eventually disappear from the product lineups of major suppliers. (From an article in the Nikkan Jidosha Shimbun on Mar. 13, 2008)


R&D Structure (Panasonic Automotive Systems Company)
Company Location
Matsushita Electric Industrial Co., Ltd.
-Automotive Electronics Development Center
-Automotive Systems Development Office
Panasonic Automotive Systems Company
-Product Development center
-Advanced Development Center
-System Development Center
Panasonic ITS Co., Ltd. Yokohama
Panasonic Automotive Systems Company of America Georgia, USA
Automotive Systems Europe Panasonic GmbH Langen, Germany
Panasonic Automotive Systems Development Tianjin Co., Ltd. Tianjin, China
Panasonic Automotive Systems Asia Pacific Co., Ltd. Samutprakarn, Germany

R&D Expenditure
(in million JPY) FY2007 FY2006 FY2005
Overall 554,538 578,087 564,781
AVC Network 295,542 286,971 275,419
Technology Alliance

Panasonic Automotive Systems Company of America and Garmin International have agreed to collaborate on OEM automotive projects targeting various vehicle manufacturers. The agreement provides the framework for the two powerhouses in their respective industries to jointly create customized navigation products for the global automotive industry. Garmin is a worldwide provider of GPS-enabled products and other navigation, communications and information products.Both companies will continue to pursue independent initiatives, as well as jointly work on select OEM programs in which their combined strengths and expertise will provide increased value to automakers and provide a greater driving experience for consumers. (From a press release on Jan. 14, 2008)

Investment Activities

Capital Expenditure
(in million JPY) FY2007 FY2006 FY2005
Overall 449,348 418,334 345,819
AVC Network 209,663 150,700 120,581

New equipment installation (FY2008)

(in million JPY) Planned
Main purpose
Overall 530,000 -
Digital AVC Network (*) 264,000 To produce new products and increase the production volume of existing digital audio-video equipment and information equipment. 
* The Company will change the name of the AVC Networks business to the Digital AVC Networks business in FY2008, which ends in March 2009.