Clarion Company Ltd. Business Information, Profile, and History

Company Perspectives:

Clarion strives to improve society by seeking to develop the relationship between sound, information, and human interaction, and by creating products to meet those needs.

History of Clarion Company Ltd.

Clarion Company Ltd. is one of the world's leading producers of in-car entertainment systems. The Saitama, Japan-based company has long played the role of leading edge in developing automotive sound and information systems--the company claims credit for being the first in the world to place a radio in a car in the 1940s. Clarion continues to develop and adapt new technologies for in-car use, including the company's latest line of DVD, television, GPS, and wireless Internet and telephony products. Clarion's automotive systems are manufactured and distributed throughout the world, with 20 manufacturing facilities in Japan, Taiwan, China, Malaysia, the Philippines, France, Great Britain, Mexico, and the United States, and distribution operations in more than 50 countries. While Clarion's automotive systems are sold worldwide, the company also produces a range of home audio and karaoke systems for the domestic market, as well as audio and video systems, including rear-view cameras, for busses and boats. The company's production is separated into two primary divisions: OEM Business Division, which develops and distributes in-car systems directly to the world's major automobile makers; and the Aftermarket Sales Division, which focuses on developing, manufacturing, and distributing products for retail channels. Clarion Company is listed on the Tokyo Stock Exchange and is led by President Tatsuhiko Izumi.

Auto Radio Pioneer in the 1940s

Clarion was founded in 1940 as the Hakuson Wireless Electric Company, one of many Japanese companies formed during the period to produce battery-powered radios for household use. In 1943, the Hakuson company merged with another radio builder, Takizawa Wireless Electric Industries Co., and the newly enlarged company took on a new name as Teikoku Dempa Company.

Following the end of World War II, Teikoku began formulating future plans to enter the export market as well, and adopted a new brand name, Clarion, for use on its radios. At the same time, the company's engineers began working on a bold new project--that of adapting the household radio for installation into an automobile. Work began in 1948, and by 1951 Teikoku Dempa succeeded in becoming the first in the world to produce a car radio, the model A-214. That radio--which featured a single button--launched a revolution in the auto market, creating a new equipment category, In-car Entertainment (ICE).

Although targeting its traditional consumer market, Teikoku Dempa also sought agreements to place its radio in automobiles as OEM equipment. In 1953, Renault Japan became the first in the world to feature a Clarion-branded auto radio, known as "Le Parisian," featuring factory installation in its 4CV model. The following year, the company reached an agreement with the United States' RCA devising industry standards for AM/FM radio reception, which marked another milestone in the global auto radio market. By 1958, the company had begun exporting its first car radios to the United States.

Teikoku Dempa adapted the fast-developing transistor technology of the 1950s to its car radios, and by 1959 had produced the world's first fully transistor-based radio. Among the company's first clients for the new generation of car radio was Nissan Motor, which accorded Teikoku Dempa's radio with the company's genuine parts specification.

Teikoku Dempa went public in 1962, listing on the secondary section of the Tokyo Stock Exchange. The listing helped fuel continued product development for the company. The invention of stereo sound recording and broadcasting technology led the company to adapt its products to meet the new transmission capability. The company's model CA-802, which debuted in 1963, was the first stereo car radio in Japan. That product began shipping in 1964.

Teikoku Dempa moved to new headquarters in Saitama in 1967, as work began on developing a new generation of car radios featuring the latest in consumer audio technology, tape cassettes. The first Clarion radio featuring a built-in cassette player debuted in 1968. The following year, Teikoku Dempa listed its stock on the Osaka Stock Exchange's secondary board. Then, in 1970, the company switched its listings to the main index of both exchanges. The company opened new headquarters in Tokyo soon after, and, at the end of that year, changed its name, to Clarion Company Ltd.

International Growth in the 1980s

Clarion by then had established itself as one of the top names in car audio equipment. To meet the rising international demand, the company opened its first foreign factory, in Malaysia, in 1970. The company continued to introduce innovative products through that decade, such as the launch of the first auto-reverse cassette player, solving an inconvenience of car cassette players. In 1976, Clarion, which had continued to develop home audio systems for the domestic market, branched out into the professional sector, introducing a business-class karaoke system. Another important Clarion innovation, a graphic equalizer for car stereo systems, debuted in 1978.

Clarion had by then begun to adapt new microchip technology into its car stereo designs, adding integrated circuit components for suppressing noise on the FM and AM bands in the late 1970s. In 1980, the company went a step further and opened its own semiconductor development center at its Tohoku factory. This enabled the company to pioneer Spread Spectrum (SS) communications technologies in the mid-1980s. The company also released the first car DAT player in 1984.

Clarion's international growth took off in the 1980s, starting with the opening of a factory in France in 1983. The company moved to boost its North American presence as well, launching construction of a facility in Mexico in 1983. The company began producing parts in Mexico in 1986. The following year, Clarion also opened a plant in the United States. By the end of the decade, the company had added manufacturing capacity in Taiwan as well, where production began in 1989. The following year, Clarion added a new feather to its cap with the acquisition of the United States' McIntosh, a highly respected name in developing audiophile systems.

Clarion remained at the forefront of car audio technology--and became a pioneer in a newly emerged automotive communications category. In 1987, the company became the first to add compact disc compatibility to its car audio systems. In 1992, the company debuted its first voice-activated automotive navigation system, the NAC-200. In that year, also, Clarion became one of the first to provide integrated audio and mobile telephone systems. A year later, the company's SS-based wireless modems were approved for use by the Japanese government.

New Technologies for a New Century

Through the 1990s and into the 2000s, Clarion continued to build up its worldwide presence, opening manufacturing plants in Hong Kong and China in 1995, launching production in Taiwan, Germany, and in 1997, in Hungary as well. The increased capacity helped the company keep up with production of its increasingly diversified product line.

A major force behind this diversification was the company's continued commitment to innovation. In 1996, the company debuted its Vehicle Information & Communication System (VICS)-compatible car navigation systems. That year, the company also received clearance to market its wireless modems in the United States. In the meantime, Clarion teamed up with Microsoft to produce the so-called "AutoPC," which debuted in 1998. The AutoPC was the first in the world to offer drivers a voice-activated on-board computer capable of performing a variety of functions. Although sales of the AutoPC, which was plagued by a number of bugs, proved disappointing, its release allowed Clarion to remain at the cutting-edge of technology as the automotive market shifted away from traditional audio systems to full-fledged entertainment and information systems combining audio, television, and video/DVD capabilities with navigation and telephony functions.

After adding DVD capacity in 1999, the company continued to boost its integration of technologies, launching a second-generation AutoPC in 2001. The following year, the company became the first to add in Dolby Pro Logic capability. This expanded audio functionality was complemented by the development of a dual-audio system that provided two different audio streams for the cabin and for headphone listening. The company also began marketing a new receiver capable of receiving satellite radio transmissions in 2002.

The emergence of MP3 and other hard-drive based digital audio compression technologies encouraged Clarion's innovative side. In 2004, the company debuted a new "Music Catcher" system, capable of transferring up to six CDs to an onboard hard-drive, eliminating the need for CD changer systems. Clarion, which sold its McIntosh subsidiary to H&D Holdings in 2004, had proved itself a primary driver of the global automotive entertainment and communications market.

Principal Subsidiaries: Clarion (GB) Ltd.; Clarion (HK) Co. Ltd.; Clarion (HK) Industries Co. Ltd.; Clarion (Malaysia) Sdn Bhd; Clarion (Taiwan) Manufacturing Co. Ltd.; Clarion Asia Pte Ltd. (Singapore); Clarion Australia Pty. Ltd.; Clarion Canada Inc.; Clarion Corporation of America; Clarion Deutschland GmbH; Clarion Europe Gmbh (Germany); Clarion France SA; Clarion Manufacturing Corporation of America; Clarion Manufacturing Corporation of the Philippines; Clarion Nederland; Clarion Orient Co. Ltd.(Hong Kong); Clarion Spain SA; Clarion Svenska AB; Clarion-Miutsuwa Phils. Inc. (Philippines); Dongguan Clarion Orient Electronics Co. Ltd. (China); Electronica Clarion SA de CV (Mexico); McIntosh Laboratory Inc.

Principal Competitors: Aiwa Corporation; Kenwood Corporation; Pioneer Corporation.

Chronology

• Key Dates:
• 1940: Hakuson Wireless Electric Company begins with production of battery-powered home radios.
• 1943: The company merges with Takizawa Wireless Electric Industries Co. and becomes Teikoku Dempa.
• 1947: The Clarion brand name is registered.
• 1951: The company introduces the world's first car radio.
• 1953: Renault Japan introduces the first car featuring a factory-installed Clarion radio.
• 1958: The company begins exporting its car radio to the United States.
• 1959: The first fully transistorized car radio is introduced.
• 1962: The company goes public on the Tokyo exchange's secondary market.
• 1963: The first stereo car radio system is introduced.
• 1967: The company opens new headquarters in Saitama.
• 1968: The company introduces its first car cassette player.
• 1969: The company's stock is listed on the Osaka secondary index.
• 1970: The company changes its name to Clarion Company Ltd. and changes its listing to the Tokyo and Osaka main boards; the first foreign manufacturing plant opens in Malaysia.
• 1980: Clarion opens a semi-conductor development facility.
• 1983: The company builds factories in France and Mexico.
• 1987: Production begins at a factory in the United States.
• 1995: Manufacturing subsidiaries open in Hong Kong and mainland China.
• 1998: The company debuts its AutoPC in partnership with Microsoft.
• 2001: Company headquarters are moved to Hakusan.