Once upon a time, Japanese companies dominated consumer electronics. But not anymore.
Stiff competition from regional rivals led Japan, once Asia’s biggest economy, to be overtaken by China in 2010. The gadgets one buys in an electronic store are now as likely to have been made in China or South Korea as they are to have been produced in Japan.
But amid the reports from renowned Japanese corporations of staggering financial losses and gloomy forecasts for the future, Panasonic is one of the few leading Japanese companies that expects growth.
The global electronics giant, headquartered in Osaka, saw profits last year of $1.3 billion, which was more than forecast, but still 10 percent less than in 2015.
Panasonic hopes to celebrate its 100th anniversary next year with increased sales and profits as a result of new consolidations and the expansion of its automotive-related and home appliance businesses.
According to the company’s latest financial report, which was released in May, net profit in fiscal year 2018 is projected at $1.4 billion — up 7 percent. Sales are also expected to rise, to $69.4 billion. This 6-percent year-on-year rise would be the first increase in the company’s sales for four years.
However, the company’s current sales in Europe are still weak, and increased only slightly compared to the Japanese domestic market, the Asian market and the markets of the Americas. Sales in Europe were buoyed mainly by the company’s air conditioner division.
And in Ukraine, 2014 and 2015 in particular weren’t easy for Panasonic: political turmoil and Russia’s subsequent war on Ukraine hit the hryvnia hard, the currency losing two-thirds of its value since 2014. That, and the wider economic recession, has reduced consumer demand and depressed sales in 2014 and 2015.
But, the Ukrainian economy is returning to growth, and now electronics sales are rising too, which is good news for Panasonic.
Koji Terajima, the director of Panasonic Ukraine, said sales in Ukraine last year were positive for the first time since 2014. Growth is forecast to be at least 10 percent this year, but he wouldn’t discuss sales figures or profits for the division in Ukraine.
But given that Panasonic has just 40 employees in Ukraine, who also cover Moldova, the Caucasus and Central Asia, while it has 257,533 globally, obviously Ukraine is only a minuscule part of the company’s revenues.
New technology
According to the Nikkei Asian Review, Panasonic’s president, Kazuhiro Tsuga, said on May 12 that the company is shifting resources to high-growth areas.
The company, which made its name by mainly producing home and office appliances, has turned its attention to the automotive industry and sustainable energy.
For instance, it recently partnered with U.S. electric car manufacturer Tesla.
In January, Panasonic and Tesla announced that the two companies had started jointly making lithium-ion batteries for Tesla’s energy storage products and Model 3 electric car at the Tesla Gigafactory in Nevada. Several months later, in April, Panasonic established another lithium-ion battery factory, this time in Dalian, China.
In addition, Panasonic is extending its collaboration with Tesla to the production of high-efficiency photovoltaic cells and modules for solar panels at a factory in Buffalo, New York.
Better investment
Two years ago, Panasonic became the first, and so far the only Japanese company to introduce residential solar modules to the Ukrainian market, but demand has been rather low.
“We offer high-quality solar panels with 25 years of workmanship warranty, which makes the price higher than that of competitors, but means it’s a better investment in the long run,” said Panasonic Ukraine’s Terajima.
Although the Japanese manufacturer has been developing residential solar panels for years, sales are still sluggish, even in Japan. This contributed to overall losses, the company’s annual report states.
Terajima added that besides solar panels, Panasonic markets a range of energy-efficient goods such as air conditioners, refrigerators, and uninterruptible power supply (UPS) devices with lower electricity consumption.
This year, another two new products particularly suitable to the Ukrainian market will hit the shelves. The first is a low-energy heat pump, designed to keep homes warm even in extremely low temperatures. The second is an air purifier, which will help counter the detrimental effects of Ukraine’s high levels of air pollution.
Customers first
Ukraine’s efforts to fight the shadow economy should help boost Panasonic’s fortunes as well. Starting from May 8, the Cabinet of Ministers of Ukraine changed its regulations on sales of sophisticated electronic goods that are subject to warranty. The list of goods affected by the change includes refrigerators, air conditioners, washing machines, vacuum cleaners, laptops, television sets and other home and office appliances — many of the staples of Panasonic’s trade.
Now electronics retailers are obliged to issue receipts for goods using cash registers — a measure the government hopes will aid in the fight against the gray economy. The law will mainly affect small retail stores and individual sellers of electronics.
Panasonic welcomes the new law, as it protects manufacturers from illegal retailers and ensures customers ’right to warranty and repair service.
“We always recommend that customers make purchases in official retail stores. However, in Ukraine many electronic products are imported unofficially. In this case we, as the manufacturer, can’t guarantee these goods’ quality and safety,” said Terajima.
“We always think about our Ukrainian customers, providing full support in the local language, doing repairs and providing replacements. And to deliver a better experience with Panasonic, we’ve extended the warranty period on all of our products to three years, up from one year.”
