TOKYO -- Japanese electronics conglomerate Hitachi will sell its Clarion subsidiary, which makes car navigation systems, for around 80 billion yen ($713 million) to French auto parts maker Faurecia, Nikkei has learned.
As of the end of March, Hitachi held approximately 63% of Clarion shares. It is expected to sell more than a 50% stake in the company in response to Faurecia's tender offer.
Demand for Clarion's car navigation systems has slumped because smartphones typically have navigation functions. The deal follows the sale of a 60 billion yen ($538 million) slice of Japanese consumer electronics maker Pioneer to a Hong Kong-based investment fund.
Clarion makes car navigation systems for Nissan Motor, Mazda Motor, Mitsubishi Motors and others. It had sales of 183 billion yen in the fiscal year ended March, but its operating profit margin was about 4%, low compared with its industry peers. Clarion also develops autonomous vehicle technology.
In addition to air conditioning and audio equipment, Faurecia makes navigation systems. The company hopes to penetrate the Japanese market through a controlling stake in Clarion.
Faurecia is one of the biggest auto component manufacturers in Europe, along with Germany's Bosch and Continental. For the year ended December 2017, the company had sales of 16.9 billion euros ($19.3 billion).