Sanyo have Sell Car Battery to some Clients
A Sanyo Electric Co. executive in charge of the company's battery unit said its promising car battery business will remain largely independent from that of parent Panasonic Corp., since Panasonic's close ties to Toyota Motor Corp. may make it difficult for Sanyo to keep other auto makers as customers, due to competitive reasons.
In December, Panasonic spent about 400 billion yen, roughly $4.43 billion, to acquire a majority stake in Sanyo with an eye toward building a green energy business that incorporates the smaller electronics maker's car battery and solar panel units.
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Mitsuru Honma, executive vice president of Sanyo Electric, gives a lecture during the Tokyo International Automotive Conference in Tokyo last year.
Panasonic holds slightly less than 20% of a battery joint venture with Toyota, called Panasonic EV Energy. Panasonic EV Energy doesn't sell its batteries to other car companies. But Sanyo has stood by its plan to sell to multiple auto makers, saying it's the easiest way to gain scale and establish a de-facto standard in a new industry.
Panasonic has yet to detail plans for how the two companies will reconcile divergent business strategies to supply lithium-ion batteries used in hybrid and electric vehicles.
"Panasonic thinks it is fine for Sanyo to stick to the current policy of selling batteries to all possible clients," said Executive Vice President Mitsuru Homma, who heads Sanyo's profitable battery business, speaking in an interview. "We won't risk losing our existing clients."
Sanyo, the world's largest maker of rechargeable batteries by market share, currently supplies nickel-metal hydride car batteries for current-generation of hybrid vehicles offered by auto makers such as Ford Motor Co. and Honda Motor Co.
Lithium-ion battery technology is expected to power the next-generation of hybrid, plug-in hybrid and electric vehicles. Mr. Homma says the car lithium ion battery market is almost non-existent now but should grow to about 1 trillion yen in 2015 and double to 2 trillion yen in 2020.
A Panasonic spokesman declined to comment, saying the company is still in discussion about integration plans. Panasonic President Fumio Ohtsubo is expected to unveil a detailed strategy for its green energy business in May.
One of the main hurdles to mass production of car lithium ion batteries is high prices, which will gradually decline as development costs phase out.
Lithium ion batteries are now used mostly for consumer electronics products, such as cellphones, computers, digital cameras and other portable gadgets. Mr. Homma said he expects the market for lithium ion batteries for consumer electronics to top 1 trillion yen by 2015, from the current range of 800 billion yen to 900 billion yen. Sanyo and Panasonic are aiming to grab a combined revenue market share of about 40%-45% by 2015, up from a combined share of about 35% now.
Mr. Homma acknowledges this won't be easy with South Korea's Samsung SDI Co. gaining ground technologically. Samsung also has been helped in part by a weaker won.
"SDI is the biggest threat right now," said Mr. Homma.
Sanyo has started looking at how best to approach the potentially huge Chinese car battery market. Unlike other Japanese electronics companies that intend to partner with a Japanese auto maker to enter the Chinese market, Sanyo may consider teaming up with Chinese auto makers to beef up its local presence, Mr. Homma said.
"We have to act early in China, or we will miss out on the opportunity when the market emerges," said Mr. Homma, predicting that the Chinese market could account for between a third to a half of as many as 20 million electric vehicles sold world-wide in 2020