Published: September 17, 2014 | Japan
Japanese Pioneer has agreed to sell its DJ equipment business to global investment firm KKR for US $551 million (~AU $606.8 million). The purpose of this initiative is the very reason of Pioneer’s vision of becoming a ‘comprehensive infotainment’ company embarking into the burgeoning Connected Car industry. From now onwards, the focus for Pioneer will be on its car electronics business which makes products such as in-car entertainment and navigation units. This deal expected to be finalised by March 2015.
Pioneer will seek to further enhance its corporate value as the world’s number-one independent car electronics manufacturer by fundamentally transforming its businesses,including (i) concentrating its management resources on the core Car Electronics business and (ii) utilizing external capital in other businesses.
“Pioneer will retain 14.95 per cent of the voting rights in Pioneer DJ and we will maintain a framework for cooperation to ensure the future growth of the company.” – Susumi Kotani, President & CEO, Pioneer
In-car Electronics industry
The car electronics industry has entered a phase of major change in terms of the market environment in which Pioneer operates,including an increasing ratio of products being installed in new vehicles as standard equipment or dealer options.
To achieve these objectives, the company aims to be an indispensable key supplier to automakers and their mega-suppliers, based on the expertise and customer confidence we have gained in the OEM market. In the consumer market, we will drive the car electronics industry as a pioneer in providing new value in the connected car life market, by being the first company to provide and expand world-first, cutting-edge solutions.
Expand OEM Business
The OEM business will work to increase sales and strengthen its profitability by expanding business with existing customers and new customer acquisitions, through such measures as enhancing our strengths, building on the expertise, customer confidence and technological capabilities, and strengthening our ability to provide solutions for connected cars and to develop key modules that create a vehicle cockpit. We will also work to increase our share of the global car speaker market by promoting our business in this segment on a full scale, which is expected to grow in line with the growth of automobile sales.
The firm said it expected to take further actions to cut costs, including shifting more manufacturing overseas over the two years to March 2018 to result in total savings of 18.5 billion yen.
Source: Pioneer Japan