Japan's electronic industry experiences business slump

The industry-wide business slump continues to weigh on Japan's electronics companies despite hopeful signs seen in the overall Japanese economy.

Except for Hitachi, the other seven major electronic companies' annual earnings were reduced in the last fiscal year and four of them suffered losses.

According to reports, one of the hardest hit electronic manufacturers in Japan is Panasonic, which has suffered losses of more than 1.3 trillion yen (about 13.6 billion U.S. dollars) in the past two years.

Currently the company is cutting jobs, selling its assets and reducing the number of business units. In 2011, Panasonic sold its Sanyo digital movie camera business and the company said it might withdraw from plasma display TV operations in the coming fiscal year.

Analysts attribute the electronic business slump to too many companies competing in the weak domestic market, while their overseas sales remained around 30 percent for the last 15 years.

Takuji Okubo, Chief Economist and Managing Director of Japan Macro Advisors said that relying on the domestic market has always been a problem for Japanese electronic companies.

He said, "They have to expand overseas and that's another challenge they have to tackle in the next few years."

Despite acknowledging the problems of Japanese electronic industry, Okubo believes electronics companies will soon regain their corporate strength once they complete streamlining non-profit operations.

He said, "I think there is no reason to be pessimistic on the competitiveness of the Japanese companies; they can succeed so long as they fix other variables, which are making them less competitive."