Japan's JVC, Funai to partner on LCD TV production

TOKYO (Reuters) - Japanese electronics makers JVC 6792.T and Funai Electric Co Ltd (6839.OS) will jointly develop and supply LCD televisions, the latest move as the sector consolidates in quest of economies of scale.

Price falls in liquid crystal display TVs have slowed, but firm panel prices still squeeze makers such as JVC and Funai, struggling to make it in markets dominated by giants Samsung Electronics Co Ltd (005930.KS) and Sony Corp (6758.T).

JVC, which is set to integrate with Kenwood Corp 6765.T, would benefit from Funai's low-cost production model, while Funai would gain from JVC's global brand and technology, Funai Executive Vice President Yoshio Nakajima told a news conference.

"Together, we will be in a position to reach for 10 percent market share," he said. "We will be able to make it."

Starting in February, Victor Co of Japan Ltd (JVC) will supply liquid crystal display TVs made at a plant in Mexico to Funai, which will sell them under its own brand in North America. JVC will market LCD TVs in Europe produced by a Funai plant in Poland starting between April and September.

The two plan to develop LCD TVs together for launch during the business year starting in April, and may jointly procure supplies and consolidate their logistics networks and maintenance services, they said.

Nakajima denied the two had immediate plans for a capital tie-up.

"We will see how we feel, once our understanding of one another deepens through joint production and development," he said. "Right now, there is absolutely no talk of a capital alliance."

Kenwood Corp 6765.T and asset manager Sparx Group (8739.Q) jointly acquired a combined 30 percent stake in JVC in August, taking the loss-making unit off Matsushita Electric Industrial Co Ltd's (6752.T) consolidated accounts.

Prior to the announcement shares of JVC closed up 1.1 percent and Funai closed down 5.1 percent, while the benchmark Nikkei average .N225 fell 1 percent.

(Reporting by Mayumi Negishi and Yumi Horie in Osaka; Editing by Mike Miller & Lincoln Feast)