• July 2012

From now on, we will shift our focus substantially to pursuing profitable growth and away from achieving turnaround. The Japanese electronics industry has now entered a stage of the largest change since WWII, which no company can cope with based on past successful experiences. Such change is seen in the fact that the volume zone of emerging markets is engulfing the volume zone of industrialized countries' markets, where Japan has been at its strongest, due to rapid growth of said markets. Another change is that as conventional manufacturing based on the approach of downgrading products from high-end to low-end models has reached a limit, we must now adopt a new manufacturing approach based on the viewpoint of emerging countries, where competition with rivals is based on the strength of material superiority while upgrading products from radically inexpensive low-end models to high-end models - that is, from the bottom to the top, a different way of thinking.

JVCKENWOOD Group, in order to quickly ride the current in a period of change, will continuously introduce products that deliver excitement and peace of mind - our corporate vision - to customers in line with the key policies, as described below, aiming to achieve "profitable growth" enthusiastically and swiftly.

1) Making inroads into growth markets

To win over the volume zone of emerging markets, where explosive growth is continuing, we will achieve innovation for new manufacturing based on the viewpoint of emerging countries, and decisively shift management resources to emerging nations.

2) Shifting from a manufacturer to a value creator

To shift away from pursuing functions only to creating value led by users, we will develop products and services that are comfortable to use and have breathtaking designs by not only using cutting-edge technologies but also combining them with optimum technologies. By doing this, we will exert a unique presence in the global market.

3) Shifting away from the self-sufficient principle and creating value

To provide highly-unique products and services that meet customer needs, we will first clarify the Group's core technologies and fields and then protect them, as well as implement flexible management measures that emphasize time and costs, including cooperation, alliance and M&A with other companies. Particularly, to master manufacturing practiced in emerging countries, which cannot be achieved based on conventional approaches, we will thoroughly study companies that have succeeded in emerging countries, and use study results in creating the Group's value.

4) Establishing a global brand customers feel longing for

To increase awareness and value of the Group's brand around the world, we will actively invest in the brand and advertisements. We will also enhance brand loyalty through continued introduction of symbolic products, developing our brand into one for which customers in the world feel longing.

We believe that in order for a company to achieve continued development in society, it is important that the company should meet the expectations of various stakeholders, earn the trust of society and continue contributing to society.

JVCKENWOOD Group will continue its efforts to improve its business performance and financial conditions, and attain highly transparent and reliable management. To facilitate this, through the 4th Ordinary General Meeting of Shareholders held on June 26, 2012, we have added one external director, and established a structure under which the Chairman of the Board and three external directors are committed to corporate governance and five directors including me serve concurrently as executive officer. The corporate auditor system has shifted to the one for an integrated company through the merger, and now consists of one auditor and two external auditors.

Under the new corporate structure, we will provide shareholders with stable returns, and improve the quality of not only products and services but also every corporate activity so that we will be trusted and counted on by all customers, corporate clients and stakeholders. Furthermore, we will contribute to society through business activities that reflect our strengths. At the same time, we will strengthen social contribution activities that are rooted regionally and environmental protection activities for the next generation.

We will further enhance the crisis management system by drawing lessons from the Great East Japan Earthquake and Thai floods, and strengthen measures against varied risks that have significant effects on management as well as promote systematic steps for business continuity.

I would like to ask for your continued understanding and support.