Panasonic Holdings Corporation has announced significant restructuring plans, including the dissolution of its home appliance subsidiary, Panasonic, by 2025. The decision reflects the company’s strategy to reorganize its various business units under new subsidiaries for more effective management and quicker decision-making.
On February 4, during an online press conference, Yuki Kusumi, President of Panasonic Holdings, emphasized the necessity for substantial management reform. "We have determined the need for fundamental transformation of our operations," he stated, outlining the reasons behind the decision to dissolve the current Panasonic structure.
According to the new plan, Panasonic will be reorganized to form multiple subsidiaries focused on specific sectors. This includes separate companies for home appliances, air conditioning, and lighting. The restructuring effort aims to fortify Panasonic’s competitive position amid increasing competition, particularly from Chinese manufacturers who have been gaining market share.
One core aspect of the restructuring involves the future of Panasonic’s television business, which has been underperforming. Kusumi did not rule out the possibility of selling the television sector, indicating, "While we are prepared to sell, we have not yet set any definitive selling policy for this business." This statement reflects Panasonic's willingness to explore all options to recover from its changing market dynamics and past underperformance.
The domestic market for flat-screen TVs has shown Panasonic’s market share declining to 12.8% as of 2024, compared to approximately 20% during the peak of the 2010s. The company is also eyeing re-entering the U.S. market after nearly a decade of withdrawal, indicating its future strategies may include geographic expansion to regain footing.
Under its restructuring plan, Panasonic aims to regroup under the new subsidiaries: "Smart Life," which will encompass its white goods, and another focused on air conditioning and food distribution. This overhaul of Panasonic’s organizational structure is intended to create seven subsidiaries going forward, aiming to bolster decision-making processes and drive growth.
Despite these ambitious plans, Panasonic anticipates its consolidated revenue for the fiscal year ending 2024 to decrease by 2% to approximately $83 billion, reflecting the company's challenges. Kusumi hinted at plans for early retirement offers and the acceleration of digital transformation initiatives to improve productivity and reduce costs across the board.
Although these reforms signify Panasonic's commitment to reinvigorate its business strategies, challenges remain. The market perception of its stock value has not significantly improved, leading to concerns among investors. At the recent shareholders' meeting, Kusumi expressed aspirations to see Panasonic’s price-to-book ratio (PBR) rise to 2-3 times its current value, which has dipped below 1. This underlines the pressure on management to execute tangible reforms and restore investor confidence.
Overall, the restructuring initiative signals Panasonic's strategic pivot toward specialization and operational efficiency as it navigates shifting market landscapes and aims to rebuild its legacy as a leading electronics manufacturer.