Kenwood 2001 Annual Report Download - page 4

KENWOOD Corporation Annual Report 2001
02
A Message from the President
Business Environment
The Japanese economy in 2000 and 2001 suffered from a
serious deflation arising from a prolonged slump in
consumer spending and vigorous competition among
corporations. The price fall in audio-visual products, the
company's mainstay, is especially big and has yet to find
its bottom. Moreover, the cellular phone market,
comprising a large portion of the Japanese
communications market, shows a slowing down in the
growth rate and the center of attention is shifting to
replacement demand among existing users. Overseas, the
long sustained growth of the US market has finally come to
an end and even the growth of the economy-leading IT
industry is in recess. In Europe, although production in
general has slowed down and exports are declining,
improvements in employment and tax relief in major
countries are keeping consumer spending afloat. In Asia,
the US influenced waning demand for semiconductors and
a slowdown in exports are starting to stifle domestic
demand as well.
Corporate Performance
Under these circumstances, Kenwood recorded a solid
figure in terms of sales for the year ended in March 2001
of 303.4 billion, an increase of 10.5% from the previous
year. In the profit and loss column, however, a sharp price
fall in home audio and car audio products worldwide and
delays in new product introductions have resulted in a net
loss of 21.8 billion.
Kenwood further opted to settle 28.4 billion
independently (non-consolidated) in extraordinary losses for
the term. These losses were caused by the withdrawal
from the CD-ROM and GSM businesses, in which losses
have been accumulating over the years, and by reserving
allowances for losses in subsidiary investments. Taking
these measures and nullifying the negative legacy was
inevitable if we were to revitalize the business without