TOKYO (Aug 27): Japanese electronics giant Panasonic Corp on Thursday said it will stop making lithium-ion batteries at its factory in Beijing this month, cutting 1,300 jobs as part of a move to focus on higher-margin products such as electric car batteries.
The 15-year-old plant produces batteries for simple mobile phones and digital cameras, both of which are being increasingly overtaken by smartphones in popularity.
"The global market for these products has been shrinking," Panasonic spokeswoman Yayoi Watanabe said, adding the closure was more about global technology trends rather than the recent turmoil that has battered Chinese markets. Employees were informed of the closure in late July, she said.
Finland's Nokia, which sold its mobile phone business to Microsoft in 2014, was the main customer of the plant in its early days, according to the Nikkei business daily.
Panasonic took over the plant from Sanyo Electric, a leading maker of lithium-ion batteries and solar panels which it acquired in 2010. The deal failed to bring in much growth due to the emergence of South Korean manufacturers, analysts say, and the Japanese firm has since sold several Sanyo operations.
The plant closure comes as Panasonic restructures to focus on electric car batteries and energy-saving home systems rather than consumer electronics such as plasma TVs and smartphones, where it faces stiff competition from Asian rivals.
In June, it said it would invest about 60 billion yen ($499.83 million) in the fiscal year through March in its automotive business, including making lithium-ion batteries for Tesla Motors Inc.
Panasonic is due to shoulder 30% to 40% of the cost of Tesla's $5 billion Gigafactory plant in Nevada, a key facility in the automaker's plans to ramp up sales.
The company's shares were up 0.5% in afternoon trade compared with a 1.6% rise in the Nikkei 225 average.
($1 = 120.0400 yen)