Honda mulling investment request from Pioneer

TOKYO: Honda Motor Co said Thursday it is considering investing in Pioneer Corp, the ailing Japanese audiovisual products maker that's seeking to bolster its capital base.

The Nikkei financial daily reported that Japan's No 2 automaker is finalizing plans for a capital tie-up worth several billion yen to help rebuild Pioneer, which also hopes to secure funds through a state-backed program for struggling nonfinancial firms.

Honda confirmed that it has been approached by Pioneer but declined to elaborate on details or a timeframe.

Pioneer said in a statement that no decisions have been made regarding its capital plans.

Hit by the collapse in demand for car audio equipment and flat-screen TVs, Pioneer's net loss in the fiscal year through March likely swelled to 130 billion yen ($1.3 billion), its fifth straight annual net loss.

The company in February announced that it would be slashing 10,000 jobs globally and withdraw completely from the money-losing plasma display business as part of restructuring efforts.

Instead, it will focus on its car electronics business, which could gain strength through new partnerships with automakers like Honda.

Investors cheered the news, sending shares of Pioneer soaring 14 per cent in afternoon trading on the Tokyo Stock Exchange, far outpacing the benchmark Nikkei 225 index's slight 0.3 per cent rise. Since Tuesday, the issue has jumped 33 per cent.