Pioneer 2010 Annual Report Download - page 8

A Sweeping Review of Manufacturing Costs
Business restructuring in fiscal 2010 enabled Pioneer to
substantially reduce fixed costs. We believe that generating
earnings through bold cost reductions will be an urgent prior-
ity for the future, in addition to expanding sales. Focusing on
“providing user-preferred functions at user-preferred prices
and time frames,” we will work to conduct cost reductions,
including cost reviews, in all processes from product planning
to design, procuring, manufacturing and delivery. For exam-
ple, in car navigation systems, we expect to reduce software
development expenses through co-development of car navi-
gation platforms with Mitsubishi Electric Corporation. As
well, we will promote manufacturing cost reductions through
the standardization of parts and modules.
Alliance Strategy
While strengthening relationships with major customers, in
these times of rapid change, Pioneer is shifting away from
its former policy of doing everything internally to forming
alliances with business partners in order to advance the
development of Pioneer’s businesses. In fiscal 2010, Pioneer
successfully formed various alliances in each business seg-
ment, beginning with an optical disc joint venture with Sharp
Corporation in November 2009. Each of these alliances is a
strategic one designed to promote Pioneer’s businesses by
leveraging Pioneer’s strengths to the most efficient level.
Expanding Business in Newly Emerging
Markets
Pioneer is working to drive further business expansion cen-
tered on its Car Electronics business and Home Electronics
business in South and Central America, Asia, Africa and the
Middle East. In the Car Electronics consumer-market busi-
nesses, Pioneer will work to expand sales by rolling out prod-
ucts that provide pricing and functionality that fit the
characteristics of each region. In the OEM business, Pioneer
plans to grow sales, particularly in China through its joint ven-
ture with Shanghai Automotive Industry Corporation (Group), a
major Chinese automaker, and through expanded transactions
with major customers. In the home AV business, we will work
to expand sales in China, Central and South America and other
regions by strengthening our product lineup through the use of
OEM and ODM arrangements. In the Chinese market in par-
ticular, Pioneer will actively expand its sales channels through
a business alliance with Suning Appliance Co., Ltd., a major
Chinese home electronics mass retailer.
Alliance Strategy Summary
Partner Type of alliance Outline
Car Electronics
Business
Honda Motor
Co., Ltd. Strengthening of business relationship Strengthening of OEM business
Mitsubishi Electric
Corporation Co-development Stronger co-development of car navigation systems, cost reduction and creation of new value-added products
Shanghai
Automotive Industry
Corporation (Group)
Joint venture established
(Ownership: 49%)
Development of OEM car navigation business and car
navigation system models compatible with Intelligent
Transport Systems in Chinese market
Home Electronics
Business
Sharp Corporation Optical disc joint venture established
(Ownership: 66%)
Effective utilization of business resources related to
the optical disc business
Suning Appliance
Co., Ltd.
Sales expansion and licensing
Pioneer brand in China Expansion of AV product sales in China
Others Mitsubishi Chemical
Corporation
Co-development of OLED
lighting application
Co-development of OLED products business for
lighting application
PIONEER CORPORATION Annual Report 2010
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