Sanyo audio works being turned into subsidiary

OSAKA — Sanyo Electric Co. has decided to shift its sluggish audio-equipment arm to a subsidiary that it plans to set up this spring, company officials said Feb. 17. The intention is to speed up development of products such as digital videodisks and information-related goods, the officials said.

The major consumer electronics maker, based in Osaka, will set up the wholly owned Sanyo Techno-Sound Co. on April 1. Sanyo also plans to streamline its television and video divisions, focusing on lucrative large nonhousehold television sets or digital cameras, the officials said. Sanyo will cut its production of consumer products at these divisions and instead increase procurement from other makers under original equipment manufacturing accords, the officials said.

The reorganization will mean transferring some of the 2,600 employees at the audio, television and video divisions to the new subsidiary or other divisions, the officials said. Sanyo’s audio division has seen its profits drop annually by some 10 billion yen for the past few years due to fierce competition and lower demand for its products.