JVC 2013 Annual Report Download - page 17

Car electronics, a business domain in which Japanese corporations
can exercise their strengths, must maintain a high quality and be
reliable enough to cope with the special temperature, vibration,
and dust conditions inside vehicles.
The JVCKENWOOD Group has positioned the Car Electronics
Segment, in which both JVC and Kenwood participated, as its
largest business. We expect this business will display the greatest
effects of integration, and have therefore been pushing forward
with efforts to integrate the technological development,
production, procurement, product planning, and marketing
functions in this business since October 2007. Over many years,
the two companies had independently fostered acoustic, video,
and car mounting technologies as well as product planning
capabilities. We have focused on developing new products by
combining these with cutting-edge data compression and
extension technologies as well as user interface technologies. In
addition, we have developed marketing and sales strategies to
make the most of the Kenwood and JVC brands, each of which
has different features. At the same time, we have further
enhanced our cost competitiveness by integrating production and
procurement.
As a result, we have achieved the largest share in the
European and U.S. after-market with the Consumer Business for
car navigation and car audio systems leading to our large-scale
composition. Unlike the overseas after-market, the main product
in the domestic after-market is car navigation systems. We are
also increasing our share and making a success in of the domestic
market with Saisoku-Navi, a flash memory type of car navigation
system developed by integrating the technologies of the two
companies.
Keeping an eye on the shift from the after-market to the
genuine product market, we are increasing orders received for
dealer option products for automobile dealers and genuine
products for automobile manufacturers. We are achieving this by
strengthening the OEM Business and forming alliances with
partner corporations. We are also winning orders for CD and DVD
drive mechanisms for car-mounted equipment not only from
domestic makers, but also from European and U.S. car accessory
manufacturers. These orders reflect our industry-leading product
quality, merchandising capabilities, and cost performance.
In the Consumer Car Electronics Business, we will aim to
expand sales in the domestic market by emphasizing car
navigation systems with specialized flash memory type products,
equipped with Saisoku-Navi series, including cost reductions. In
the overseas after-market sector, we will increase our variety and
sales of display audio system products with enhanced connection
capabilities to smartphones and tap into emerging markets by
launching models exclusively for emerging countries.
In the OEM Business, we will develop and mass-produce a
specially designed car navigation system and display audio system
to win new orders. We will also make efforts to increase orders
received for car navigation systems to be converted to after-
market models as dealer option products by leveraging our
strengths in the after-market, and cooperating with our partner
corporations. In the segment that includes CD/DVD mechanisms
for car-mounted AV systems, we will boost mass-production of
newly developed optical pickups through cooperation with
Shinwa International Holdings Limited, which became a subsidiary
in June 2013, thereby developing a new customer base. In
addition, we will work to create synergies and step up activities in
the water-based paint plastic panel business in a bid to expand
and strengthen our business in emerging markets, focusing
particularly on China, where continuous rapid growth can be
expected. Furthermore, JVCKENWOOD acquired all shares of
JVCKENWOOD Nagaoka Corporation (formerly TOTOKU Nagaoka
Corporation) through a corporate split (absorption-type split) from
TOTOKU Electric Co., Ltd. in July 2013. We hold high expectations
that in-car electronic devices and parts, which are provided on an
EMS basis by JVCKENWOOD Nagaoka, will become a new
business domain for the Group and contribute to expansion of the
OEM Business.
Looking ahead toward the establishment of a car-mounted
network environment, we set up a joint venture with ZMP INC., a
company which operates the development platform for next
generation mobility, etc., at the end of July, 2013. The aim is to
develop a technology with various services for cars linked to an
open Internet environment and establish those services as a
business. Using the establishment of the joint venture as a
springboard, we will make full-fledged efforts to promote
business development in the telematics※ field, a sector that is
expected to grow in the future. Moreover, we will work toward
the early commercialization of new growth domains such as the
Head-up Display Business, Controller Area Network (CAN)
Business and the Self-driving Car Business under the innovative
Advanced Driver Assistance System (i-ADAS) task force, which was
launched on August 1, 2013.
Telematics A newly coined word combining telecommunications and
informatics, meaning the provision of information services in
real time by connecting mobile objects such as automobiles to
communications systems like mobile phones.
■Major Products
Car Audio, Car AV Systems, Car Navigation Systems,
CD and DVD Mechanism for Car-mounted Equipment
■Net sales and operating income (Billions of yen)
100.5
107.8
108.4 107.3
2.5
4 .1
7.9
6.3
4.0
-1. 3
3.6 3 .1
1.1
-10 . 8
-0.8
1.7
2.0
-1.7
2.2
1. 2
91.8
91.4
92.5 93.5
68.8
141.8
100.1 77. 5
40.9
44.9
42.9
36.7
FYE
3/'10
FYE
3/ '11
FYE
3/ '12
FYE
3/'13
FYE
3/'10
FYE
3/ '11
FYE
3/ '12
FYE
3/'13
FYE
3/'10
FYE
3/ '11
FYE
3/ '12
FYE
3/'13
FYE
3/'10
FYE
3/ '11
FYE
3/ '12
FYE
3/'13
■ Net sales

Operating
income
15
JVC KENWOOD Corporation
Business Overview