Panasonic eyes double-digit overseas growth

Panasonic eyes double-digit overseas growth

Tokyo: Japan’s Panasonic Corp said it will target double-digit overseas sales growth in each of the next three business years, giving a glimpse of the business plan it is due to issue early next year.

Driving overseas sales is important for Panasonic as it counts on the domestic market, where the population is shrinking and ageing, for more than half of its overall revenues.

The maker of Viera TVs and Lumix digital cameras also said it plans to start white goods production in Europe and India, in a move to cut transportation costs and cater to local consumer taste.

Panasonic is aiming for annual sales growth of 15-20% in emerging markets of Brazil, Russia, India and China -- the so-called Bric nations -- plus Vietnam over the three years, Panasonic senior managing director Hitoshi Otsuki told Reuters.

Besides the Bric countries and Vietnam, where it earned ¥420 billion ($4.8 billion) in sales in the year to March 2009, Panasonic also targets Mexico, Indonesia, Nigeria, Turkey and the Balkan states including Serbia as high-priority markets.

The company will aim for 30% annual sales growth in those nations for the three financial years from next April by offering electronic products designed and priced in a bid to spur demand among middle-class consumers there, Otsuki said.

“We need to achieve 20 to 30% growth in emerging markets. Otherwise, double-digit sales growth in overseas markets would be out of reach," Otsuki said in an interview on Thursday.

Panasonic, the world’s No.4 flat TV maker behind Samsung Electronics Co Ltd, LG Electronics Inc and Sony Corp, does not give its sales figures for Mexico, Indonesia, Nigeria, Turkey and the Balkan states.

It is set to unveil a new business strategy in January.

Otsuki, in charge of Panasonic’ overseas marketing, said it will likely start refrigerator and washing machine production in Europe in three years, taking on local white goods giants such as Electrolux.

Panasonic now makes washers and refrigerators in China for the European market.

“It is quite inefficient to send such bulky products all the way to Europe from China. Starting up local production is just a matter of time," Otsuki said.

“If we are to buy an existing plant there or to turn to M&As, production can start next year. If we are to build a plant from scratch ... the year after next is more likely timing for local production. We have not decided which way we take."

Panasonic, which is carrying out a tender offer to take over Sanyo Electric Co Ltd, the world’s largest rechargeable battery maker, is also looking for a factory site in India to make white goods there, Otsuki said.

He said details of the plant, such as the size of investment, have not been decided, but that the Indian plant will come onstream ahead of the planned European factory.

Panasonic currently manufactures white goods in Southeast Asia for the Indian market.

Shares in Panasonic closed down 1.7% at ¥1,108, underperforming the Tokyo stock market’s electrical machinery index, which fell 1%.