OSAKA -- Panasonic will scrap its 10 trillion yen ($88.7 billion) group sales target for the fiscal year ending March 2019 as the Japanese electronics giant modifies its pursuit of scale in light of a cooling global business environment.
The lofty target was set to mark the company's centennial that year. The company will instead aim for roughly 9 trillion yen without setting a target date. President Kazuhiro Tsuga will present the new goal at a press conference March 31.
The Osaka-based company downgraded its sales forecast for fiscal 2015 from 8 trillion yen due to the Chinese economic slowdown and other factors. With the business climate turning bleak, the 10 trillion yen goal is looking increasingly out of reach.
Panasonic will split operations into two segments and assign each a sales target. The consumer products segment, which includes the automotive, residential and white goods divisions, is to reap 6 trillion yen in annual sales, with an operating margin of 5% or higher. Panasonic shrank this segment in part by withdrawing from plasma televisions.
The business-to-business segment will have an annual sales target of 3 trillion yen, with an operating margin of at least 10%. A larger security systems business, where it has a substantial competitive advantage, will contribute.
Tsuga, meanwhile, plans to delegate more power to segments in order to foster prompt decision-making, rather than fixating on scale.