Panasonic Electric Case Study

From 1991 to December 2010 Japanese Foreign Direct Investment in India amounted almost US$2.2 billion and out of that 64 percent of Japanese Foreign Direct Investment inflow came during the period of 2000 to 2010. Out of US$ 2.2 billion only 0.6 billion came till 2000 from the period of 1991.

Major portion of Japanese Foreign Direct Investment mainly confined to transport industry and share of this particular sector is 53 percent. The second important sector which is attracting Japanese investment inflows Electric equipments and its share stood at 7.1 percent followed by service sector covering both financial sector and non- financial sector and accounted for 3.3 percent and earth moving machinery with relative share of 3.2 percent.

Japanese

There was ¥50 billion acquirement of electrical materials heavyweight Anchor Electricals by Matsushita Electric Works (now Panasonic) in 2007. Panasonic Electric operates as a nationwide sales network as the largest company with a 37percent market share and its works in particular can be cited as successful example among the M&A cases by Japanese companies in India. Anchor Electricals, which was bought by Panasonic, manufactures and sells primarily household electrical equipment such as wiring instruments, circuits, electrical wire, ceiling fans, lighting lamps and lighting fixtures. Panasonic Electric Works engaged in a capital participation in this company in 2007 and declare 100percent subsidiary by 2009. Currently Panasonic Electric Works is improving production processes by sending Japanese employees to the local sites, becoming a new model for success for Japanese corporations. NTT DOCOMO also deserves consideration. This company agreed to capital participation with Tata Teleservices, part of the Tata Group, in 2008 and invested ¥250 billion in 2009 to acquire 26percent of their stock as well as 12percent of the stock of the related Tata Teleservices Maharashtra. NTT DOCOMO launched the brand “Tata DOCOMO” in India, started offering innovative services such as “one paisa per second” and “one paisa per SMS

India is the largest yen loan recipient country since 2003 and the amount of loan received by India was 22.5 billion yen in 2007. Japan is one of the largest sources of FDI inflows in India between 1999 and 2010. Japanese companies are more concentrated around the areas like Delhi, Tamil Nadu, Maharashtra; Haryana and Karnataka- almost 135 Japanese companies are established in Delhi, 198 companies established in Maharashtra, 135 companies were established in Karnataka, 240 companies in Tamil Nadu and 193 companies in Haryana. Main FDI inflows from Japan through Indian companies – from 2000 to 2010 include Maruti Udyog, Escort Yamaha Motor Ltd., Yamaha Motor India Pvt. Ltd., Sanyo BPL Pvt. Ltd., Welspum products, Telco constructions equipments Co., Birla NGK Insulator Pvt. Ltd, Toyota Kirloskar Motor Ltd.