Panasonic dissolves its LCD subsidiary and moves into the electric vehicle battery market

CTOnews.com, August 1 (Xinhua)-- Japanese electronics giant Panasonic announced on Monday that it will liquidate its subsidiary that makes liquid crystal displays (LCD) to accelerate its transition to electric vehicle (EV) battery manufacturing.

Panasonic liquid Crystal display, located in Hirou City, near Osaka, mainly provides LCD for automotive and industrial applications. The plant will be directly controlled by the parent company, and Panasonic plans to transform it into a production base for EV batteries.

By disbanding the subsidiary, Panasonic will cancel its debt of 580 billion yen (CTOnews.com Note: currently about 29.174 billion yuan) to another subsidiary, thereby reducing the income tax burden of 121.3 billion yen (currently about 6.101 billion yuan). Since the loan has set up a loss reserve, it will not affect Panasonic's profitability. Instead, the company raised its net profit forecast for the fiscal year to March 2024 to 460 billion yen, up 73 per cent from a year earlier. The new forecast is 110 billion yen higher than the previous forecast, a record high. Panasonic's sales and revenue forecasts remain unchanged.

Panasonic began producing LCD panels in 2006, and the Jilu factory began producing panels for televisions in 2010. But its profitability has declined as price competition with South Korean and Chinese manufacturers has intensified. The company concentrated production on Jilu and focused on automotive and industrial displays, but decided to close the plant in 2019 and reduce its LCD business to selling only inventory products. Panasonic lost money in fiscal years 2011 and 2012 because of the downturn in its flat panel display business, which is seen as a symbol of overinvestment. EV battery is a growth area, but it is also an area of fierce investment competition, which needs to face challenges from Chinese and Korean companies.