Panasonic Boosts India Manufacturing by Adding Flat Televisions

Panasonic Corp., the Japanese manufacturer struggling to make its television business profitable, plans to start producing flat-panel TVs in India to fuel sales growth and meet local regulatory demands.

 

Japan’s No. 2 TV maker is building a factory in the northern state of Haryana where it will make flat-screens using semiconductors imported from Japan to meet a target of tripling Indian sales by 2016, Panasonic President Kazuhiro Tsuga told reporters in Mumbai. The company plans to start making chips in India after 2015 to help feed a market that consumed $8 billion in semiconductors in 2012, a 7.4 percent increase over 2011 even as global chip-based revenue declined, according to Gartner Inc.

Tsuga is leaning on India and Brazil to help make Panasonic’s TV business profitable by March 2016, a target that’s two years behind that of larger rival Sony Corp. India has received about 20 billion rupees ($372 million) in investment proposals for the electronics industry this year. It plans to approve bids to open the country’s first wafer manufacturing factories by May with production starting in 2014, Information Technology Minister Kapil Sibal said on April 22.

 

“India is growing like most other developing countries where there are a lot of opportunities in consumer electronics and appliances,” Tsuga said. “Our philosophy has been to not simply import products from other countries,” he said, because items “should be specially customized for Indian consumers, keeping local needs in mind.”

 

Chip Appetite

 

India’s semiconductor consumption will reach $9.6 billion in 2013, according to Gartner. The country has already approved about 10 billion rupees of foreign investment in manufacturing of consumer electronics this year, and plans to add a total of 250 billion rupees by March 2014, J. Satyanarayana, secretary of India’s Department of Electronics and Information Technology, said in a phone interview.

Along with televisions, which are currently being imported to India from Malaysia and other Asian markets, Panasonic will expand manufacturing of other consumer electronics including air conditioners, washing machines and refrigerators, Tsuga said. The Osaka-based company will spend about $250 million on marketing in its push into India.

 

Panasonic shares were unchanged yesterday at 709 yen at the close of trading in Tokyo. Japan’s benchmark Nikkei 225 Stock Average fell 0.2 percent.

Panasonic has forecast a net loss of 765 billion yen in the 12 months ended March 31.