• JANUARY 5, 2000

Philips India mulls sale of projects business

Philips India is evaluating a sale of its projects division. The division operated as a part of the Business Electronics Division.

Although the sale of the projects division seems to be a fallout of the parent company’s hive off of the same division, Philips India intends to focus on the business electronics division. The company has in the past sold of its Salt Lake and Loni units that were used for the manufacture of color TVs. The company found itself hampered by its high cost structure, which prevented it from slashing prices when far more nimble competitors such as Akai and Aiwa came on the scene.

Philips introduced the state of the art flat TVs but intends to outsource their manufacture. With a tighter patent regime likely to be in place the company sees outsourcing as a way to reduce its cost structure. In the past the company has lost market share to Videocon, BPL, Onida. It wants to increase its focus on the marketing of consumer durables instead of manufacturing. With the Chinese manufacturer Konka too making its debut in the Indian market, cutting costs has become imperative for the company.

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