Panasonic is making plans to revive its TV division, according to the senior executive responsible for the reforms.
The company, whose TV division is expected to clock up its fourth yearly loss in the current financial year, will reduce personnel, write off losses on assets at its TV-making plants, and rethink its traditional policy of only making larger screen sizes using plasma panels.
Interviewed by Japan's Nikkei business daily, Panasonic's senior vice-president in charge of AV products, Mamoru Yoshida (pictured), said that the company is focusing on structural reforms, and hopes to turn its TV operations around by the 2013-14 financial year,
Asked how sales are went during the peak Christmas/New Year selling period, Yoshida said that price-competition in the US led to the company dropping less profitable models, such as standard 42in screens and 32in models. However, he said that 'our sales in the U.S. fell short of our initial target by 60-70%'.
In Europe, he said, the UK saw the largest fall in TV sales for the company, while the Chinese market hasn't delivered the sales Panasonic expected.
And while the Japanese domestic TV market is showing signs of some recovery, it's not going to return to the peak demand seen in recent times as the country approached digital switchover last year.
Speaking of his moves to improve profitability, Yoshida explained that 'When I took charge of our TV operations last year, I found that some models had already fallen below marginal profit levels. I decided to remove these models and narrowed down our offerings. I slashed our plasma TV lineup by a third.
'We also reviewed our production costs – I am telling our production lines to halve their costs from earlier models.'
He says that in the current and forthcoming financial years, 'we will focus on structurally reforming our TV operations. At the same time, we will cut our production costs and improve the appeal of our products, so our TV operations can return to the black by the end of fiscal 2012.'
What of the future for plasma TVs, for a long time Panasonic's flagship products? 'we're not necessarily trying to downsize production.
'Rather, we are first attempting to optimise the size of our TVs, with the aim of redeveloping certain products that incorporate their appeal. We plan to expand our existing TV operations while moving into the smart TV segment.'
And Yoshida countered suggestions in some quarters that Panasonic might be exiting the TV business to concentrate on more profitable products such as renewable energy technology: 'Panasonic is accelerating its shift into green technology and energy, but this does not mean that we will terminate production of TVs and audio-visual equipment.'
Follow whathifi.com on Twitter