JVC Kenwood Targets Rapid Car CE Growth

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JVC and Kenwood officially merged under the JVC Kenwood Holdings name Oct. 1 and said it wants to make OEM and aftermarket car electronics business its top product category.

It wants car electronics to be "the [company's] largest segment in total sales," JVC Kenwood said in a statement, but did not indicate a timetable.

The company reorganized its business segments into car electronics; home/mobile, including home and portable audio, TVs and camcorders; entertainment; and professional systems, including wireless communications and professional audio and video.

To accelerate its car electronics business, the merged entity said it expanded the scope of its previously created joint venture, J&K Technologies, beyond home, car and portable audio R&D to include product development, design, procurement and production. Also to bolster its car electronics standing, JVC Kenwood vowed to increase its presence in car navigation systems.

For the fiscal year ending March 2009, the two companies previously forecast car electronics would account for 18 percent of the two brands' sales, with the home/mobile segment accounting for 43 percent. Professional systems would account for 14 percent, with entertainment accounting for 9 percent. Other businesses would account for 16 percent of sales.

In the newly created home/mobile segment, the company called its camcorder business "highly profitable" and described its TV and home audio businesses as "unprofitable." The new company is making efforts in both areas to restructure and cut costs. (See story on www.TWICE.com for further details on this and financial aspects of the story.)

In the U.S., Keith Lehmann, senior VP of Kenwood USA's CE division, said, "Very little integration has happened yet in the U.S." He added, "I don't expect significant integration in the next year or so."

He agreed that, for the holding company, "car electronics is the major growth area." Both brands, he noted, could increase their penetration of the automotive OEM market, where their shares "are not huge;" enter new automotive product categories; and perhaps tap the expediter market.

Although Kenwood exited the U.S. home audio market several years ago, the brand is "actively considering" a reentry with lifestyle-oriented products, but not in the near future, he said.

Major shareholders in the holding company are Panasonic with 24.4 percent of shares, Kenwood with 11.3 percent, and Sparx Asset Management.

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