Company history

Sanyo began in 1947 as a deliberate act of separation. Toshio Iue had spent some thirty years as a managing director of Matsushita Electric — the company his brother-in-law Konosuke Matsushita had built from 1917 — and when the postwar Occupation’s purge of business leaders reached him, he left to found his own firm. In January 1947 he set up Sanyo Electric Works in Moriguchi, Osaka, and, on the Hojo plant in Hyogo that Matsushita handed over to him, began making dynamo lamps for bicycles. The name Sanyo — “three oceans,” for the Pacific, Atlantic and Indian — declared an outward, export-minded ambition from the first day.

Sanyo entered as the country’s seventeenth lamp maker, a latecomer — yet the mass-production methods Iue had learned at Matsushita let it take roughly 70% of the domestic bicycle-lamp market by 1950, the year it incorporated. Careful never to fight his brother-in-law’s Matsushita head-on at home, Iue pushed early into exports and into products the main house had left thin. The clearest was the washing machine: in 1953, while rivals hung back from the British-designed jet-stream type for fear of Hoover’s patents, Sanyo judged no patent would hold in Japan, converted wholesale to the design, and launched it at $78 (¥28,000) — about half a competitor’s price.

The gamble set the company’s course. Monthly output climbed from thirty units to more than ten thousand within a year; by 1961 Sanyo led the country in washing-machine production and had made the jet-stream type the Japanese standard. Radios (from 1951, including Japan’s first plastic-cased set), fans and refrigerators followed, and within about fifteen years the Osaka workshop had assembled the shape of a full-line appliance maker. Growth strained it, too — a bruising 1958 strike, the gravest crisis since founding, pushed Sanyo to open Tokyo Sanyo Electric in 1959 on the former Nakajima Aircraft site in Gunma, where labour ran about 30% cheaper than in Kansai. Through all of it, Sanyo grew in the spaces beside Matsushita rather than against it.

By the early 1960s the first wave of appliance demand had run its course, and the 1965 securities recession stalled domestic sales. Sanyo found its next opening in exporting colour televisions to North America, where its half-year revenue roughly tripled between 1965 and 1969. But when every Japanese maker crowded into the American market at once, the friction hardened into a dumping dispute, and Sanyo had to accept a cut of about 30% in output under pressure from US authorities. A new Gifu plant meant to build 20,000 sets a month arrived roughly a year late over a land dispute — so that, as the trade press put it, the company “could not ride the big-screen colour boom.”

The limits of exporting alone pushed Sanyo into making its sets on American soil — and, characteristically, it did so not by design but because its largest customer asked. Sears, its biggest buyer, sought help rescuing its troubled affiliate Warwick; in 1976 Sanyo set up Sanyo Manufacturing Corporation, bought Warwick for a little over $10.6M (¥3bn), and began building colour televisions in Arkansas. Payroll grew from 400 to some 1,800, the state governor honoured the plant, and by 1980 Sanyo was turning out 960,000 sets a year — the largest local North American production of any Japanese company, ahead of Matsushita and Sony. A reactive decision had made Sanyo a pioneer of the overseas manufacturing that Japanese industry would later adopt wholesale.

Sanyo carried the model on: it took over Philips’s British television plant in 1982, and moved early into China, signing the first full-scale Sino-Japanese manufacturing joint venture and, by 1984, some seventeen China projects — well ahead of its peers. Yet the same years exposed a structural weakness. After founder Toshio Iue died in 1969, control stayed inside the Iue family, and though revenue kept climbing the company had, as one industry weekly wrote in 1977, “no decisive hit product,” its share price trailing not just Matsushita and Sony but Sharp. Sanyo was growing into a full-line maker whose outline, as a brand, stayed oddly faint.

From 1990 Sanyo made its most consequential bet. As its core audio-visual business sank into recession, it kept pouring roughly a fifth of the whole company’s capital spending into batteries — a long-marginal line it had once considered spinning off. The wager rested on a real inheritance: the founding family had nurtured battery work on Awaji Island since the 1960s, and Sanyo had built genuine mass-production strength, first in nickel-cadmium and nickel-metal-hydride cells and then, decisively, in lithium-ion. Choosing the moment of weakness rather than of surplus to concentrate resources on the next pillar, Sanyo grew into one of the world’s leading rechargeable-battery makers, and a solar-cell leader besides.

Around this success the company diversified in every direction — semiconductors and LCD panels through its Niigata and Tottori arms, digital cameras from 1998, a 1992 internal-company system to spawn new ventures. But breadth outran depth. In 2001 Sanyo joined Eastman Kodak in an organic-EL display venture, sank on the order of $263.3M (¥32bn) into it, and lost about that much when the mass-production technology never came together. Falling appliance earnings and failed new bets pushed Sanyo, in the year to March 2003, into its first net loss since founding. Its 2002 capital tie-up with China’s Haier — ceding the low end to a partner rather than fighting a war of attrition — was, in strategy, sound; but Sanyo misjudged how fast that partner would climb, and the firm it handed the mass market would one day help pick over its remains.

Then came the blow the balance sheet could not absorb. In October 2004 the Chuetsu earthquake in Niigata wrecked Sanyo’s semiconductor plant there, gutting one of its remaining strengths at the worst possible moment. A company already thinned by scattered, sub-scale investment now faced a capital hole it could not fill on its own — and the search for outside money that followed would decide how the story ended.

To fill the hole, Sanyo turned to the capital markets. In December 2005 it raised about $2.7B (¥300bn) in a third-party share placement led by Goldman Sachs and two other financial firms, and installed the journalist Tomoyo Nonaka as chairman and chief executive — an unusual attempt to change a stagnant decision-making culture from outside. But capital could buy time, not a structure. Sanyo’s real problem was never a thin equity base; it was a business designed so that none of its many bets could win at scale. The money lifted the capital ratio without touching the loss-making core, and by March 2006 the accounts carried a going-concern qualification.

What outside capital could not do, absorption did. Seiichiro Sano, president from 2007, could not restore trust — “a company that cannot keep its promises will not be believed,” he admitted — and in December 2009 Panasonic (the former Matsushita) took Sanyo over through a tender offer, completing full ownership in April 2011 and ending the listing. Of all the technologies Sanyo had spread itself across, only two could truly compete in the world — lithium-ion batteries and solar cells — and it was those that Panasonic prized; the same act that ended Sanyo’s independence preserved its best work, carried forward into Panasonic’s battery supply to Tesla. A business whose sales had once reached some $18.2B (¥2tn) was broken up, roughly 90% of its people cut by 2013, and the Sanyo brand vanished from the shelves. The branch that Matsushita had spun off in 1947 had, after sixty-four years, returned to the main house.