Japan electronic giants embrace autos after consumer-goods struggles
TOKYO — After pitching his company’s PlayStation Vue cloud-based TV service and top-shelf Alpha 7S digital camera, Sony Corp. CEO Kazuo Hirai made a telling, if abrupt, segue.
The Japanese consumer electronics giant is targeting a new market, Hirai announced — the mammoth auto industry.
“This growing automotive segment has enormous potential,” Hirai told the crowd in January at the International CES in Las Vegas. “We’re aiming to take a leading position.”
Names such as Sony, Panasonic and Toshiba were once synonymous with cutting-edge household gadgetry, churning out everything from TVs and computers to fax machines and VCRs.
But these days, Japan’s storied electronics companies are struggling in the cutthroat consumer goods market amid cheaper, and often more innovative, rivals from South Korea and China.
The trend has pushed the beleaguered blue chips to try reinventing themselves as suppliers to one of the few sectors of Japan Inc. still thriving: the auto business. The payoffs could be handsome because auto sales are on a global upswing and the profit margins can be higher than for old-school consumer goods.
The Walkman creator is the latest into the ring, with Hirai’s plan to parlay Sony’s expertise in digital cameras into sensors for advanced automotive safe-ty systems. But other Japanese electronics companies are already there, fighting for a larger slice of auto sales in everything from computer chips to electric vehicle batteries.
“It’s a big trend,” said Hiroshi Ataka, manager of Japan component forecasts at IHS Automotive. “A lot of electronics companies are expecting growth from automotive. Their traditional products have become commodity products.”