TOKYO (Bloomberg) -- Panasonic Corp. is in talks with automotive parts makers for possible acquisitions or alliances as Japan’s No. 2 television producer seeks to expand the components it delivers to vehicle manufacturers.
The supplier of lithium ion batteries for Toyota and Tesla is interested in companies that make front and rear car components and have a strong safety record, Yoshihiko Yamada, the head of Panasonic’s automotive and industrial systems unit, said in an interview today.
Panasonic plans to double revenue to 2 trillion yen ($19 billion) from automobile-related products such as drive-control systems by March 2019, as part of President Kazuhiro Tsuga’s plan to cut reliance on televisions and other consumer electronics. Panasonic, which has announced six deals this year worth about $473 million based on data compiled by Bloomberg, will seek partnerships or deals to accelerate growth in technologies such as automatic parking, Yamada said.
“It’s hard to enter a new area without a track record and it’s hard for our system to get adopted without making the device that can contain the system,” Yamada said during an interview in Osaka. “That’s among our weaknesses.”
Panasonic makes cameras and sensors that can be used in an automated parking system, according to Yamada. “They can be added to the front or rear bumper, but we don’t make bumpers.”
The executive declined to identify companies that are in talks with Panasonic.
Yamada’s automotive and industrial systems unit, which also makes devices for industries other than carmakers, was the biggest contributor to profit and revenue among Panasonic’s four main divisions in the six months ended Sept. 30. The unit generated 1.36 trillion yen in sales during the period, about 37 percent of the company’s total revenue.
For automotive-related products, the company will probably generate 1.1 trillion yen in sales this financial year, up 10 percent from a year earlier, Yamada said. The annual revenue will probably total 1.3 trillion yen by March 2016, he said.
Car safety devices, such as 360-degree view camera systems, and power packs for electric cars, are two focus areas to drive growth, Panasonic said last month. The company is also expanding its entertainment systems used in cars to meet rising demand for passengers to watch DVDs and other multimedia systems used in living room.
Demand to make cars more environmentally friendly through lower emissions and to increase safety measures will boost industrywide revenue of car-related businesses to about 19 trillion yen in 2018, Yamada said.
Panasonic aims to take advantage of its consumer electronics business technologies, including face recognition software used in Lumix cameras, to develop more products for the car industry, Yamada said.
“The reason why we believe Panasonic can succeed in this area is because we have a wide range of technologies that we’ve fostered in the past that are ready for use,” he said.
The division plans to boost the proportion of revenue from overseas auto manufacturers to as much as 50 percent from 20 percent, Yamada said. About 60 percent of Panasonic’s auto parts sales are now generated from Japanese carmakers.
Panasonic plans 120 billion yen in capital spending for automotive businesses during the three years to March 2016 to help boost production capacity of lithium-ion batteries, according to a Nov. 22 presentation. Research and development expense will total 300 billion yen during the period.