Kenwood 2001 Annual Report Download - page 8

KENWOOD Corporation Annual Report 2001
06
76.4%
Audio
Equipment
Percent of Net Sales
Year in Review
Sales of audio equipment for the year ended in March 2001
rose by 9.5% from the previous year to 231.8 billion aided
by the introduction of new products with higher values, such
as home audio equipment with a built-in CD-R/RW drive and
car audio with a MP3 decoder. However, profit has declined
as primary products in both fields got involved in price wars
and sales failed to meet our expectation in the overseas
market.
Home Audio
Car Audio
0
Sales of Car Audio (Consolidated)
(Billions of yen)
1997
1998
1999
2000
2001
50 100
0
Sales of Home Audio (Consolidated)
(Billions of yen)
1997
1998
1999
2000
2001
50 100
Home Audio
Car Audio
Sales of car audio for the year ended in March 2001 were up by
11.6% to 120.5 billion but operating income declined. Falling
market prices in Japan along with the insufficient product supply
caused by the worldwide shortage in major components during
the first half led to the poor performance below the business plan
expectations.
Kenwood, the leader in the after-market, launched a receiver
with built-in MP3 decoder, the first of its kind in the industry,
during the term. The company's effort was well rewarded as the
new model with the unique function appealed to the consumer
and the company had to triple the original production plan.
Meanwhile, car navigation systems also performed well and,
especially in Japan, sales of DVD navigation systems reached
approximately double the quantity sold during the previous term.
In the OEM market, we are concentrating our efforts in
expanding the business not only for car audio, but also for car
navigation systems.
In the overseas after-market, the fact that CD receivers have
reached the growth stage and the solid performance of our MASK
series with a unique anti-theft mechanism led to a sales increase
of approximately 10% from the previous year.
While sales of home audio for the year ended in March 2001
grew to 102.0 billion, a 7.2% increase from the previous year,
the bottom-line analysis reveals a huge loss in the business.
Domestically, Kenwood holds the top share in the market for
both system component and portable component. In the
system component category, new models designed for
integration with PC systems, such as the one with a built-in
CD-R/RW drive, gained popularity and, in the personal audio
category, the MD radio-cassette player "Rampage" continued
to perform well. However, the prolonged slump in consumer
spending had further intensified the price war in the market.
Business overseas also suffered a setback as our effort to
introduce new DVD players and home-theater audio systems in
the US and Europe in the latter half of the term was not
enough to negate the effects of a general price fall in
conventional models.
Audio
Equipment
Audio
Equipment