Panasonic Sees Sales Growth in Europe as Economy Starts Recovery

Panasonic Corp. (6752), Japan’s biggest consumer-electronics maker, expects European sales to increase next year as the economy starts to stabilize and businesses boost investments.

Panasonic sees growth now in eastern Europe and Germany in areas including automotive, and expects southern European sales to start rising next year, said Laurent Abadie, chief executive officer for Panasonic in Europe. The company plans a business-to-business smartphone for the U.S. and Europe early next year after halting handset sales in Europe, he said.

“Overall, sales are stable now and next year we are planning growth,” Abadie said in an interview at the IFA consumer-electronics show in Berlin today. “In Europe, there’s big opportunities and still room for us to grow. Even in Spain we think that we have reached the bottom and we have some signs of recovery.”

Economic expansion in Germany and France has led the euro region out of its longest recession, supporting the gradual recovery forecast by European Central Bank President Mario Draghi. Euro-area services expanded in August for the first time in 19 months, while a gauge of German factory output rose to the highest level in more than two years. Economic confidence in the zone soared to a two-year high in August as the currency bloc’s recovery gathered pace.

Serbian Factories

About 9 percent of the Osaka-based company’s revenue comes from Europe. Panasonic expects the region to account for more than 10 percent within three years as it invests in areas including consumer electronics and B2B segments, Abadie said.

“We are in fact building two new factories in Serbia, which will be effective for 2014 or 2015, and we plan to produce high-end products for Europe and Russia,” Abadie said. “That could be a good opportunity for us.”

Panasonic said yesterday that full-year earnings could beat its forecast as a weaker yen lowers prices for its products in overseas markets.

“We’re seeing better numbers than we had anticipated,” President Kazuhiro Tsuga, said in an interview, declining to give details. The company in July forecast net income of 50 billion yen ($502 million) for the year ending March 2014.

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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