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Panasonic Explores Sale of Auto Parts Unit, Eyes EV Market Focus

Panasonic enters talks to sell Panasonic Automotive Systems, targeting a shift towards EV market focus. No layoffs expected; deal specifics anticipated by March 2024
p 6752.TSE Blue Chip 150 Tech 350
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Panasonic Holdings is in discussions to divest its auto parts subsidiary, Panasonic Automotive Systems, signaling a strategic shift towards concentrating on the electric vehicle (EV) market. The Japanese manufacturer aims to sell a stake in the subsidiary, which manufactures display systems and EV charging components, to funds affiliated with Apollo Global Management. The agreement’s details are anticipated to be finalized by March 2024, with the size of the stake undisclosed. Panasonic assures that if the deal proceeds, no layoffs are expected.

Recent corporate efforts have seen Panasonic channel resources into three key technologies: EV batteries (supplied to Tesla), heat pump technologies, and supply chain management software. The company, considering a reshuffle of underperforming business units, has emphasized the potential for some units to be restructured.

The auto parts divestiture aligns with Panasonic’s strategy, focusing on batteries and software. Norikazu Shimizu, a senior analyst at IwaiCosmo Securities, suggests the move aims at streamlining the group business. The announcement hints at a “potential future public listing” for the auto parts subsidiary post-sale. Panasonic acknowledges the competitive auto parts market amid the EV transition and anticipates continued investment in software development and electrification for sustained growth. The company recently reported a record net profit of 288 billion yen ($1.9 billion) for H1, but adjusted full-year forecasts due to sluggish demand for consumer electronics in Asia.

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