Recently, a significant announcement from the Panasonic Group stirred considerable attention and discussion. The company revealed its intention to disband Panasonic Electric, transitioning it into a business entity under a somewhat ambiguous term: "developmental dissolution." This phrasing sparked a wave of speculation about the company's future and strategic positioning.

Panasonic, once a giant in the television manufacturing industry, is now facing the harsh reality of a steep decline. The shift from being a globally respected brand known for producing quality televisions to announcing such a drastic restructuring has left many bewildered. Within a mere two days of the initial announcement, Panasonic was compelled to issue two clarifications, asserting that it is reorganizing Panasonic Electric rather than dissolving the entire group. Additionally, they indicated that no decisions had yet been made regarding the potential sale or withdrawal from their television operations.

This turn of events highlights the challenges auto manufacturers face in the realm of consumer electronics. Panasonic has been a cornerstone of Japanese manufacturing for decades, boasting a portfolio of over 520 companies worldwide and an annual revenue exceeding ¥4.3 trillion. In the late 20th century, many in China became acquainted with the Panasonic brand through its television sets. During the 1980s and 1990s, advertisements featuring the iconic deep male voice uttering "Panasonic" became nostalgic fixtures in Chinese homes, evoking sentiments of prestige and quality. For countless households, owning a Panasonic television was a source of pride, symbolizing a certain status in society.

However, as time marched on, the glory days of Panasonic televisions began to fade. In recent years, the company made troubling decisions, including shutting down production facilities in Japan, Vietnam, and India. Currently, the company produces only around one million televisions annually—a mere fraction of its former output. In stark contrast to Panasonic's plight is the meteoric rise of Chinese and South Korean television manufacturers. Brands like TCL, Hisense, Xiaomi, and Huawei have increasingly captured the market share, demonstrating remarkable growth and innovation.

As of the first half of 2024, Hisense secured the second position globally in television shipments, capturing 14% of the market. TCL continues to be a formidable player, ranking among the top in panel market shares. Between the third and fourth quarters of 2024, Samsung, TCL, Hisense, LG, and Xiaomi emerged as the top five television brands, collectively holding a remarkable market share of 63.3%. In this mix of dominant players, the absence of any Japanese brands is particularly noteworthy, with local names holding a significant share of the market.

Panasonic's struggle is further underscored by its dwindling market presence; as of 2024, the company's global television market share had plummeted to just 1%. This once-prestigious entity now finds itself grappling with deep-seated issues within its television business, which has become a liability rather than a profit-generating segment. Consequently, the decision to integrate the home appliance division comes as no surprise—not only must they revitalize their image, but they also face the pressing need to reassess their core business strategies.

Looking ahead, the remaining question is where Panasonic intends to stake its claim following the dissolution of its television arm. The company has expressed a shift in focus towards automotive batteries, a burgeoning industry witnessing preeminent growth and competition. Panasonic aims to develop its battery division, demonstrating confidence in the quality of its products, even as it acknowledges the intense price competition posed by leading firms like CATL.

In recent months, Panasonic has identified automotive batteries as a "key investment area," committing substantial resources to bolster its production capacity. The objective is to quadruple output levels, aspiring to reach an annual production capacity of 200 gigawatt-hours by 2030. However, the landscape of battery production reveals a stark divide; CATL, America’s leading battery manufacturer, is projecting industry-leading figures of 246 gigawatt-hours by 2024, significantly surpassing Panasonic's ambitious targets.

This discrepancy has historical roots; Panasonic initially garnered acclaim through its partnership with Tesla, making considerable headway in the electric vehicle market. However, the turn of the century brought forth newfound competition from China, where companies like CATL and BYD emerged as pioneers in the technology sector. Today, China has burgeoned into the largest and fastest-growing market for new energy vehicles, paving the way for native battery manufacturers to thrive. Since 2017, CATL has positioned itself atop the global leaderboard for battery sales, overshadowing Panasonic's previous successes.

Statistics illustrate this dramatic shift: data compiled by Dongwu Securities reveals that by August 2024, CATL accounted for 37.1% of the global battery installation market, followed closely by BYD at 16.4%. Panasonic, meanwhile, held a meager 4.4% market share, ranking sixth overall. The comparative figures highlight the undeniable lead that Chinese manufacturers hold over their Japanese counterpart.

As the prestige of Japan's automotive industry falters—once outpacing the United States in output—it faces a paradigm shift driven by the intensity of the electric vehicle revolution. Given this backdrop, Panasonic's decision to refocus on automotive batteries amidst the dissolution of its television operations presents a strategic gamble, fraught with uncertainty. The question remains whether this pivot will provide the growth they seek or be yet another chapter in a long list of challenges facing an iconic brand striving to reclaim its former status.