Panasonic achieved positive results in 3rd Quarter FY 2020
On February 2nd, 2020, Panasonic shared positive results in 3rd quarter FY 2020. Panasonic, which is a Japanese multinational electronics company founded by a Japanese famous entrepreneur (Konosuke Matsushita) in 1918, has around 260 thousands employees across the globe. The sales revenue of the company was 7,490 billion Japanese yen in 2019 and the Japanese electronics giant has more than 500 subsidiaries in the world. Panasonic has several business categories such as Appliances, Life Solutions, Connected Solutions, Automotive and Industrial Solutions. Panasonic S5 and Panasonic hz2000 are famous products in the present.
The notable moment in the quarterly meeting was that the sales of automotive batteries increased and the Automotive category was profitable. This is a really good sign for the company because it wants to find new core businesses to earn profit, and automotive batteries is a candidate. As we can imagine, it is difficult and takes time to make new businesses profitable. Main reasons why the Automotive category is profitable is that production of Tesla’s model 3 is increasing, which leads to lower costs of automotive batteries, and Panasonic improves their quality as well.
The race in automotive batteries soars up
Even though we can see the positive results of Panasonic’s automotive battery business, it might have to take more bold actions to win the tight race in automotive batteries business. First of all, Panasonic was the market leader until 2018, but Contemporary Amperex Technology Co. Limited (CATL) and LG Energy Solutions are two powerhouses in the market now.
As we see the other article, LG Chem decided to split its battery division proactively so as to follow the current trend called “ESG investment”. Many experts say that CATL and LG Energy Solutions will compete each other by increasing their capacity. On the other hand, Panasonic considers its competitive advantage safety and high density of batteries. It means that the Japanese electronics giant takes different approach from Korean or Chinese battery giant. In addition to this, Tesla announced that the most valuable automotive company was planning to produce its own battery cell in Battery Day, which was held in September 2020.
Therefore, business landscape becomes more uncertain so that we expect that Panasonic acts boldly in order to win the game. This is because history verifies that Japanese manufacturing companies lost the competition in the several markets such as home appliances, TV and semiconductor in the past. Since the automotive battery market is promised to grow and attractive, more Chinese manufacturers are expected to enter as well as European countries have accelerated investments. What will Panasonic do in the next?