TOKYO (AP) -- Panasonic Corp. will slash about $1.5 billion from its planned investment in two new flat-screen TV plants and shut down unprofitable businesses as demand for high-end electronics falls globally, the company's president said Friday.
Panasonic President Fumio Ohtsubo said the electronics giant will cut about 23 percent from its planned $580 billion investment through 2012 in two new TV panel factories in Japan. He said the company scaled back its ambitious plan as a result of market conditions.
"The expanding demand for flat-screen TVs has hit a slight downturn," Ohtsubo told reporters in Tokyo.
The world's largest maker of plasma televisions still plans to sell 50 percent more TVs next fiscal year, a total target of 15.5 million units, he said. It will also undertake a major launch of home appliance sales in Europe during that period.
Panasonic makes flat-screen TVs based on both plasma and liquid crystal display technology, and is ramping up production to keep up with domestic rivals such as Sharp and Sony.
As tough competition drives down the price of TVs, manufacturers have poured funds into their production capacity to leverage economies of scale, a strategy that can backfire if overall sales decline.
In November, Panasonic cut its net profit forecast for the current fiscal year by 90 percent, blaming the poor business environment and the yen's surge against foreign currencies.
Ohtsubo also said Friday the company would undertake some cutbacks in the coming fiscal year, exit certain businesses and products, and shut down some foreign manufacturing operations.
Panasonic is in the middle of a $9 billion takeover of Japanese rival Sanyo, hoping that transforming into one of the world's biggest electronics companies will help it weather the global economic crisis. The company has said it is prepared to invest an additional $1 billion to speed up the process.
Panasonic last year changed its official name from Matsushita Electric Industrial Co., shedding the name of its charismatic founder in favor of its more internationally known brand.