The Nikkei in Tokyo is reporting today that JVC Kenwood has revealed that it expects to achieve ¥13 billion ($158 million) in net profit for fiscal 2015. This rate is more than double its fiscal 2011 level of profit…and an ambitious target.
See more on how JVC Kenwood expects to dramatically improve its business results…
JVC Kenwood has said it will take multiple steps to achieve this goal. One such step is that the company plans to focus on emerging market sales where it feels it has an opportunity to generate greater growth. In fact, they plan on sending teams directly to China and India to conduct market research and focus their product planning.
The company’s management feels that by offering car audio and other products specifically designed for these local markets, they will see sales grow to ¥100 billion ($1.2 billion). This is fully triple its current sales contribution from emerging markets. Now emerging markets represent about 11% of the company’s sales. With the growth in emerging markets, JVC Kenwood believes it can raise this proportion to 25% of their overall sales.
Boost sales, cut costs…
JVC Kenwood also plans to cut expenses. One of the ways it will do so is to covert a Hong-Kong based auto parts company in which it had previously invested into a wholly owned subsidiary.
The company will also make substantive changes in its audio/video business, which has been impacted by sluggish sales. In order to improve the performance of this division, the company plans to refocus its assortment in order to narrow it down to only the more profitable products within the overall line-up such as high-definition projectors and high-performance headphones.
Hitting reset on targets…
Finally, JVC Kenwood will target lowering its debt expense as well as seek to negotiate extensions with their various financial institutions.
The company’s sales target for 2015 is ¥400 billion. Previously, JVC Kenwood had said it would have sales of ¥430 billion and a net profit of ¥11 billion for their fiscal 2013. However, the company said these plans had to be reworked due to the impact of the floods in Thailand earlier this year, as well as the challenging currency exchange environment.