Matsushita Electric Industrial Co. said Friday it aims to lift its profit margin to at least 5 percent in the next three years on sales of 8.2 trillion yen by meeting rising demand for digital consumer electronics products such as DVD recorders and flat TVs.
It also unveiled plans to invest 130 billion yen to build a new semiconductor facility at its existing plant in Toyama Prefecture in a bid to boost production of system-on-chips used for its key products.
Matsushita originally tried to achieve a 5 percent profit margin in its core business operations during the three-year term end this March, but it is expected to fall far short of that goal.
For the current fiscal year, which ends in March, the company expects a profit margin of 2 percent on revenues of 7.45 trillion yen.
The company said it will aim for 410 billion yen in operating profits on revenue of 8.2 trillion yen in fiscal 2006.
In announcing the new three-year plan starting in April, Matsushita President Kunio Nakamura said the company's inefficient structure as well as its sales-driven -- instead of profit-oriented -- mind-set have resulted in rather poor profitability.
As part of efforts to boost margins, he said the company will slash 100 billion yen in costs by the end of March 2005. This will come partly by more selective allocation of research and development outlays.
The company said digital products, including digital cameras and plasma display panel TVs, will continue to drive growth.
Matsushita said it aims to achieve a 10 percent share of the global digital camera market by the end of fiscal 2006, when manufacturers are expected to sell 55 million units worldwide.
Officials declined to give Matsushita's current market share, saying it is very small because the firm entered the digital camera market later than its competitors.