Pioneer Corporation is in talks with various companies to rescue its finances as its OEM automotive navigation sales falter, it said last week.
The company admitted it is having trouble remaining a “going concern,” when it pays back loans due in late September.
A “going concern” is an accounting term that means the company is able to continue operating for a period of time sufficient to fulfill it commitments and obligations.
Pioneer reported a loss last week of $60 million for the April-June quarter, which follows a loss of about $60 million for its fiscal year 2018 that ended in April.
The Japanese Nikkei Asian Review reported last week that Pioneer is considering spinning off some of its operations and creating a joint venture with Calsonic Kansei, an 80 year old auto parts company. The report said “Struggling Japanese consumer electronics maker Pioneer has asked at least two companies, including autoparts supplier Calsonic Kansei, for financial help, people familiar with the matter said Wednesday.”
When asked for comment, a Pioneer USA spokeswoman sent us the following statement out of Japan:
“Please be informed that Pioneer Corporation has not made any announcement on its support requests to some companies, which some media reported today. Pioneer is currently examining its management improvement plans and the significant revision measures in the OEM business, and discussing them with some companies including Calsonic Kansei Corporation, however, no decisions have been made. We have no other comments on this matter.”
The Asian Review added, “In the coming weeks, attention will focus on whether Pioneer will be able to repay debts of 13.3 billion yen [about $120 million] by a Sept. 26 deadline.”
Pioneer has divested itself of a number of consumer electronics businesses over recent years including its audio/visual and DJ businesses, choosing to focus on automotive product sales. However, it has struggled to devise a plan to revive its flagging OEM navigation sales.
In its recent financial statements it said, “In the OEM business, which has faced harsh profitability conditions and is the main factor of deterioration of business performance, we will make every possible effort to decide details of significant revision measures at an early stage, including alliance with business partners, review of business conditions with customers, and cost reduction.”
Regarding consumer sales it said, “In the consumer market business, our main source of revenue, we plan to promote Pioneer’s proprietary “connected car life” by launching new products with enhanced smartphone-link functions and pursuing sound-centric entertainment in a timely manner. We will also proactively strengthen our new businesses, such as solutions businesses that combine Pioneer’s strengths in both hardware and software, including telematics services for automobile insurance and Vehicle Assist, a driving management service for fleet vehicles, and thereby we will pursue increase profit again.”
It is also pursuing 3D-LiDar and advanced automotive mapping technology.
Pioneer said it is negotiating with banks on refinancing loans and cash flow and it is pursuing the “share transfer” of some of its Malaysia plants and the Pioneer FA Corporation.
The problem is that Pioneer has stepped back from making units that have good quality. They don’t listen to advice from the Installer who install the units everyday. Other companies have been listening and have make better products and sound, look and function better. There products have a cheaper feel and they are cutting corners where they shouldn’t be. They have a Double Din Unit that MSRP for 699.99 . But there is companies with better feature and better product for less. Pioneer needs to set there EGO aside and listen to the people who deal with there products everyday. Maybe some Testing in the field. Give installer a chance to pick up the product for cost instead of making them pay the say as everyone else with the Terms they have to give feed back on the units and the problems they run into. Pioneer use to be a great car audio company but has really fallen off the last couple years and everyone as seen it.
For Years now it’s been a race to 0 , No one is Hearing the Sales and Installation Shops . Hal Goodley Custom Audio Madisonville Ky since 1984
First clarion , here goes pioneer
Boss, PA, Jensen, Dual. Same quality. Fraction of price. Sadly, Throw away society.
raise your prices. we already sell at msrp. the market will allow higher prices (and more profitability for retailers) for your excellent products.
g
This is what happens when you turn your back on your after market; brick and mortar partners. When you allow your stuff to be sold to anyone that has money and a pules and allow it all over Amazon and other places; your partners have no choice but to switch gears and support those manufactures that at least attempt to protect dealers from below map; unauthorized dealer sales. Pioneer makes great products; they just come to market with way too low maps and offer too many features for the price, making it very difficult to step customers up. On top of all that, they refuse to protect dealers by selling their products to anybody who has the cash and can move boxes, no matter how it negatively affects the industry as a whole. Pioneer leads and is the cause for the race to zero; if they were to STOP offering their line the way they do and protect it; they would gain market share back and at the same time, strengthen our industry. It’s not just about OEM; you must support brick and mortar dealers and help fix this whole internet B.S.!
Don’t die on us Pioneer, you make my favorite touchscreen units!!