Kenwood 2001 Annual Report Download - page 13

KENWOOD Corporation Annual Report 2001 11
Expanding the OEM business for further growth
Kenwood is in its 22nd year since entering into the car audio
business in 1980. During the past, Kenwood has gained
popularity among users with its superior Hi-Fi performance
and versatility as well as sophisticated design and now holds
approximately 15% of the world's car audio after-market. In
recent years, major automobile manufacturers have
acknowledged Kenwood's success in the consumer market
and started to adopt its products in their automobiles.
Despite these long lasted successes in the car audio market,
however, Kenwood struggled in the 72nd fiscal term due to
the low demand for pure audio products in the stagnant
Japanese consumer market and the slowdown of the US
market in the latter half. In addition to the economic
recesses, shortages in major components and fluctuating
exchange rate held down the company's sales figure as well
as income below the business plan. Operating under the new
system formed in May 2001, the division intends to improve
the profitability of its business through an operational reform
and to aim for further growth by enhancing its marketing
efforts in the OEM market.
Pursuing collaboration with tier-1 suppliers in the world
The OEM car audio market that is
estimated at one trillion yen, twice as
big as the after-market, provides a
huge opportunity for Kenwood. One
of the strategies taken by the
company in developing the OEM
business is the creation of business
collaboration with the major
automotive component suppliers who
are closely tied to automobile
manufacturers. Currently, the
company is co-developing an audio-visual navigation system
with DENSO and is planning to apply the same approach to
the tier-1 automotive component suppliers throughout the
world so that our products will be adopted as standard
components by major automobile manufacturers in the world.
On the other hand, Kenwood is also working hard to
develop unique products for the after-market, like the MP3
decoder built-in receiver that shipped 270% of the original
plan, and to raise the status of the brand even further.
Exploring new areas of business
Product development at Kenwood will be more focused on
the navigation systems, for which the market continues to
expand, in addition to the value-added audio products as
explained above. We have already introduced the DVD
navigation system that had performed extremely well in Japan
last year and in the US and European market this year. Now
the company's efforts are centered on the development of
digital broadcast receivers, which are expected to be the
bread and butter products in the future. In addition to the first
DAB receiver for the European market introduced earlier, the
company is currently planning to release a product for Sirius
Satellite in the US, which will start its broadcasting in 2001,
and new car audio equipment aimed at
the digital terrestrial broadcasting and
the digital satellite broadcasting that are
expected to take off in 2003 in Japan.
Besides these, we will also work hard to
develop new products by integrating
audio, navigation, and communications
functions - products that are unique to
Kenwood in their nature, representing
the three business sectors of the
company.
Director & Division Manager,
Car Electronics Division
Haruo Kasuya
Gain new grounds
by expanding into the OEM market
and by nourishing seedlings of new technology
Car El
Construct a New Organization to
Instill Vigor into Business
Car Electronics Division