Struggling Japanese Electronics Company JVC has announced a massive 80% decline in profits.
The company has also admitted that it is srtuggling to compete in the consumer electronics market and that it has been affected by unexpectedly sharp declines in the selling price for LCD TVs. Matsushita Electric Industrial President, Kunio Nakamura, told business daily Nihon Keizai today that his company had no plans to sell its shareholdings in JVC parent company, Victor, but they were monitoring daily the compay’s performance. JVC, which is sold in Australia by Hagemeyer, is also struggling in the camcorder and DVD recorder market, where it admits that ir has been impacted by a major drop in sales of DVD equipment, as well as quality issues.
In Australia, JVC LCD TVs are overpriced and, due to the fact that they are channelled by a distributor, there is little flexibility to move on price quickly when competitors cut costs. Several mass-market resellers won’t stock JVC products because of pricing performance issues. The company admits that sales declined year-on-year as growth of LCD TVs was insufficient to make up for a decline in sales of DVD players. The company has also been hit by the impact of a shrinking market for CRT TVs and lower sales of DVD equipment resulting from the elimination of models. Also impacting JVC was quality issues with DVD recorders
JVC’s profit and loss statement showed an overall operating income of 1.5 billion Yen during the quarter, down 80 percent year-on-year from an operating income of 7.4 billion Yen. Income was 0.1 billion Yen during the quarter, compared with income of 6.4 billion Yen in 3Q last year. Net income before tax was 75 million Yen for the quarter, compared with net income before tax of 4.7 billion Yen in 3Q of last year. JVC has also forecast continued problems.
Calls to Carlos Prosse, General Manager of JVC Australia, were being screened by a PA who said “We have a pecking order in this company and our media team needs to screen all PR calls.” When it was put to her that the General Manager should be in a position to comment on his own operation she said “Everything has to go through PR”.
Later, Carlos Prosse called back. He said “It’s nothing. It’s all a storm in a tea cup. Every manufacturer is in trouble. We are doing great.” When asked whether JVC Australia had a problem in responding to pricing due to the JVC LCD TV product being sold via a distributor vs a vendor, he said “We are working with the factory on issue. These are some of the hurdles one has to deal with.”