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| May 1, 2008 |
| Announcement |
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KENWOOD to expand consumer and OEM sales in South America and
will begin direct sales of car electronics products in Brazil.
Alliance with Visteon for production and OEM sales will continue. |
KENWOOD Corporation (President and CEO: Kazuo Shiohata; head office: Tokyo, Japan) will initiate direct sales of car electronic consumer products in Brazil and reinforce its alliance with Visteon Sistemas Automotivos Ltda. (“Visteon”), a Brazilian subsidiary of Visteon Corporation, a leading U.S. automotive parts manufacturer (CEO – Michael F. Johnston; Head Office – Michigan, U.S.A.).
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| 1. Background and Purpose of Direct Sales in Brazil |
KENWOOD continues to tap into emerging markets, primarily in BRICs, by bolstering the consumer segment that comprises the core of its car electronics business. The company identified Brazil as a priority growth market and established a subsidiary in Brazil in 1994. In 2000, KENWOOD formed a business alliance with Visteon concerning the car electronics business in South America and focused mainly on the expansion of OEM businesses through production and distribution by Visteon, which has factories in Brazil and distribution networks throughout South America.
Part of a strategic to reinforce its car electronics business, KENWOOD is shifting consumer sales to direct distribution in Brazilian market which have grown remarkably in recent years. In a new partnership agreement with KENWOOD, Visteon has agreed to concentrate on assembly and distribution of OEM products to auto manufacturers and dealers, areas in which Visteon has proven capabilities.
Based on this new partnership agreement, KENWOOD will succeed to Visteon's sales network and begin direct sales of its consumer products. KENWOOD hopes to expand sales in the consumer segments of the South American market, including those countries where it has already completed direct penetration.
KENWOOD will continue to outsource to Visteon the assembly of consumer and OEM products and the exclusive distribution of OEM products to certain auto manufacturers in the South American market. This arrangement will help maximize the benefits of preferential tax applicable to production at Visteon's factory in Manaus. It will also maximize the benefits of adjacent-to-market production and both companies' sales strengths. KENWOOD and Visteon will work together to expand their businesses in South America on both fronts of consumer sales and OEM.
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| 2. Future Prospects |
In order to get direct sales of consumer products in Brazil in full swing by the end of the first half of the year, KENWOOD will expand the sales network and boost the manpower of its Brazilian subsidiary. It will also strengthen the sales structure for mass merchandise outlets, specialty stores and distributors, and build up its after-sales service network. KENWOOD will also consider launching CD receivers, amplifiers, speakers, all-in-one AV-navigation systems, and other car audio products that are selling robustly in Europe and North America as well as expand them into the OEM market.
In addition, KENWOOD plans to enhance sales by driving brand promotion with Formula One (F1) racing, an enormously popular sport in Brazil and which KENWOOD is an official supplier. Through these initiatives, KENWOOD anticipates an increase in sales of its car electronics products in the South American market from between 100,000 and 200,000 units, to the vicinity of 500,000 or 600,000 units by fiscal year 2010. |
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| About Visteon |
| Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, and electronic products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany; the company has facilities in 26 countries and employs approximately 41,500 people. |
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| About KENWOOD |
KENWOOD Group is "Reaching out to discover, inspire and enhance the enjoyment of life" as part of its bold, new vision for the future. As a leader in the field of "Mobile & Home Multimedia Systems," KENWOOD is comprised of three businesses (Car Electronics, Communications Equipment and Home Electronics), 11 domestic and 25 overseas subsidiaries around the world.
KENWOOD is expanding its car electronics business by retaining its focus on the consumer sales segment, while simultaneously consolidating its position as one of the world's leading brands by creating a variety of innovative and sophisticated products and by exploiting its track record and acquiring new customers in the OEM segment. |
For inquiries regarding this article, please contact:
Public & Investor Relations Office, Corporate Relations Division, KENWOOD Corporation
TEL: +81 42 (646) 6724 FAX: +81 42 (646) 1440 E-mail: pr.qa@kenwood.co.jp |
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