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Pioneer's Kotani Outlines Future Goals

NEW YORK -- Susumu Kotani, Pioneer Electronics USA's president/chief operating officer, in his first meeting with the press since his appointment this spring, outlined the company's strategies and goals for the balance of this year and beyond.

Kotani, a 25-year veteran of Pioneer, is no stranger to the U.S. market, having been the senior VP of car electronics from 1991-'97. He was upbeat about Pioneer's performance in its first fiscal quarter, with the company reporting a net profit of $26 million and a consolidated revenue gain of 3.4 percent to $1.3 billion (TWICE, p. 4, Aug. 21).

The Pioneer executive cited DVD-related products and plasma-display sales as the two categories that drove the business during the first quarter.

But Kotani's message was that to increase its business and achieve its lofty Vision 2005 goals, which were set by the corporation two years ago, more has to be done in the United States.

He reiterated the four goals parent company president Kaneo Ito outlined: Become No. 1 in the DVD category; build a solid foundation for next-generation displays; expand into the networking area; and change from an assembly to a key device area. "Our sales goal is about $12 billion," he said. "In order to accomplish this we must double our sales."

The U.S. market is key to Vision 2005's success, said Kotani, with the Web and digital technology being the driving forces behind change. -"The U.S. has embraced this technology and achieved great productivity gains in every sector of the economy. New business models are being formed every day. Also, the relationship between customers and manufacturers is changing. [Manufacturers] need high-quality communications with our customers . a mutual, trusting relationship. Because of rapid change management must make quick, accurate decisions to remain competitive.-"

In June, Kotani held a meeting in Los Angeles for all Pioneer employees that targeted three goals:

· Get a 20 percent share of the DVD-related market. (At this time it is 10 percent, but worldwide, Pioneer has a 20 percent share.)

· Strengthen Pioneer's brand awareness in video to the level it has in the home audio and car electronics markets.

· Create a corporate management division that will coordinate sales and marketing strategies across all categories. The division will set basic strategy that will be adapted in different categories.

Kotani wants Pioneer Electronics USA to be -"a leader in the Pioneer Group.-" The corporation depends on overseas markets to provide 60 percent of all sales. More than 70 percent of products come from overseas factories, he noted.

-"The U.S. is the biggest sales and marketing group [in the company],-" he added. -"We are doing business in the largest market in the world. Without our contribution, Pioneer is not really a global company. Sales are good, but from a profit standpoint we are not contributing enough."

By implication, the impression is that Kotani is under scrutiny to make Pioneer's U.S. operation a driving force within the company and within the industry.