Joseph Palenchar On Feb 25 2013 - 1:00am

Pioneer Home A/V Sees Flexibility In New Structure


LONG BEACH, CALIF. — The consolidation of Pioneer’s home-A/V business unit in Japan with other business units into a leaner wholly owned subsidiary will speed up product planning, time to market, and a return to home-A/V profitability.

According to Russ Johnston, executive VP of home entertainment and corporate communications at Pioneer Electronics USA, the home A/V business includes engineering and product planning for global markets.

Other units that will be part of the subsidiary are the company’s wired phone business, which largely sells into the Japanese market; Pioneer’s Japanese home- A/V sales operation; cable set-top boxes; and IT peripheral products.

DJ products are part of the A/V business, but Pioneer does not plan to include the DJ business in the newly formed subsidiary, a Pioneer spokesperson said in Japan.

The new subsidiary, which will be responsible for its own profit-and-loss statement, will be home to all product development and engineering staff, sales management and back-office functions for the three business units, Johnston said. The consolidation will enable the three groups to make speedier product planning and development decisions, he continued.

Subsidiary status will also give the business units more flexibility to use resources inside and outside of Pioneer to develop products, he added.

The subsidiary will also be able to “make the business unit more profitable in a faster manner” because, in having its own SG&A expenses and P&L, it will be able to manage itself more effectively, Johnston added.

The reporting structure, including product-needs communication, between Pioneer USA’s home-A/V division and Japan’s home-A/V executives will “stay exactly the same,” Johnston noted.

He also said the changes will not disrupt 2013 U.S. product plans, which call for 14 new A/V receivers in the Pioneer and Elite lines by the end of the summer, he said.

Consolidation will be complete in July, said a spokeswoman for Pioneer Corp. in Japan. Although a Pioneer financial statement said the three business units would be “spun off,” she noted that “there’s no transaction of shares or stocks with other investors outside of Pioneer groups.”

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