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Monday, July 11, 2005
 Sanyo to Boost Own-brand Cameras
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Message Text: Sanyo Electric Co. Ltd. is on track to hit its target for digital camera output of 13 million units this year and aims to double sales of its own branded cameras, an executive said on Monday.

In an interview with Reuters, Morihiro Kubo, head of Sanyo's camera division, said Sanyo would aim to boost sales of cameras sold under its own brand to 10 percent of its total output in the future from about 5 percent now. He declined to say when that target would be hit.

Sanyo is one of the world's largest producers of digital cameras, although it supplies about 95 percent of its output to other companies such as Nikon Corp. and Olympus Corp. under original equipment manufacturer (OEM) agreements.

Kubo said Sanyo would hit the 10 percent target primarily by expanding sales of multi-function cameras like the "Xacti C5," which can take both still pictures and video. It plans to sell 300,000 such cameras in 2005/06, double the previous year's total.

He stood by the company's target to produce 13 million units in the 2005/06 business year, up from 11 million the previous year.

Some analysts have warned that Sanyo would fail to hit that target, first unveiled in April, due to weak market demand.

"So far things are progressing in line with our plans," Kubo said at the company's digital camera factory in Daito City, in the western prefecture of Osaka.

While digital camera operations are still one of Sanyo's more profitable businesses, analysts say margins have come under pressure recently because of sliding prices and slowing market growth, especially in mature markets like Japan.

Sanyo does not give a breakdown for profit in its digital camera division. But Goldman Sachs predicted in a recent report that the division would post an operating profit of 3.2 billion yen this business year, less than half the 7.0 billion yen of 2004/05.

Kubo said Sanyo has made progress in cutting costs by boosting the ratio of overseas procurement, shifting production to countries where labor costs are lower and accelerating development to bring products to market faster.

"We are aiming to cut (production) costs by 30 percent with models coming out this fall compared with those launched in spring last year," Kubo said. "If we don't cut costs by that much, we won't be able to keep up with price falls in the market."

Sanyo said last week it would cut 14,000 employees, or about 15 percent of its global work force of 96,000, shutter domestic factories and halve debt in a sweeping restructuring designed to return the company to profitability.
 
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