JVC Mulls Scaleback of Japan LCD TV Operations

By Insert Byline

Struggling consumer electronics maker Victor Co of Japan is considering drastically scaling back its home-use LCD TV operations in Japan, a source with direct knowledge of the matter said on Wednesday.

Expectations of such a move, reported earlier in the day by the Nikkei business daily, sent JVC shares up more than 6 percent.

JVC, Pioneer and other mid-size electronics makers are having a difficult time competing with bigger flat-TV suppliers equipped with larger and more advanced production facilities, such as Samsung Electronics and Panasonic maker Matsushita Electric Industrial.

JVC, however, plans to maintain its liquid crystal display (LCD) TV operations for corporate and public sector clients in Japan, the source said.

The electronics maker, owned 36.8 percent by Matsushita and 17 percent by auto and consumer electronics maker Kenwood, is the fifth-largest LCD TV maker in the Japanese market. But its domestic market share fell to 3.1 percent in 2007 from 4.1 percent a year earlier, according to DisplaySearch.

The Nikkei said JVC plans to end domestic production and sales of flat-panel televisions, succumbing to fierce competition, and will instead focus on North America and Europe.

JVC on Tuesday revised down its net outlook for the year just ended for the third time, hit by a firmer yen and a special loss at its LCD TV operations.

Pioneer, the world's fifth-largest plasma TV maker, said last month it would cease production of plasma display panels and start buying the panels from outside suppliers, a move aimed at saving on hefty costs to build and run its own panel plants.

Shares in JVC rose 6.3 percent to 220 yen by the end of morning trade in Tokyo, outperforming the Nikkei 225 Average, which rose over 1 percent.