Bloomberg: Pioneer has confirmed that it will build a new factory in Brazil to double output of car audio and video players to meet an increase in demand.
Pioneer will spend 1.5 billion yen ($13 million) by March 2009 to bring the factory’s annual output to 1 million units, double the current level, spokeswoman Ema Suzuki said by telephone last week. The plant, in Manaus, northern Brazil, will replace an existing facility in the city when it starts production by April 2008, she said.
The expansion adds to plans announced by Tokyo-based Pioneer last month to spend about 2 billion yen to raise production of car stereos over three years in China and Thailand. The company is increasing output as economic expansion fuels sales of vehicles and car stereos, led by expansion in Brazil, Russia, India and China, the world’s fastest-growing major economy.
The company plans to increase the number of employees at the factory to 550 in the year starting April 2009, from 350 now, Suzuki said. Pioneer is Brazil’s largest maker of car audio products, with about 30 percent of the country’s 2 million units a year market, she said.
Pioneer, also Japan’s third-largest plasma television maker, needs faster growth abroad as price declines for flat-panel televisions and other electronics are eroding its profit. The company on Jan. 31 cut its forecast for net income to 5 billion yen for the year ending March 31, from an earlier projection for 10 billion yen and an 85 billion yen loss a year earlier.
The company in February said it will form a venture in Shanghai that will start in August, and build a second factory in Thailand to open in April.
The Chinese plant is expected to have annual output of 4 million car stereos in the year ending March 2010, while production capacity of the Thai plants will increase 40 percent to 7 million units by 2010 from a projected 5 million this year Pioneer said at the time.