In a move that will see Honda gain access to the ailing electronics manufacturer?s in-car navigation and entertainment technology, the Japanese carmaker is reportedly finalising a multi-million dollar investment in Pioneer Corp.
A Honda spokesperson said the company had been approached by representatives from Pioneer, following news that the electronics firm would be withdrawing from its home entertainment operations to focus its resources on the auto electronics industry.
Home and car electronics have historically been Pioneer?s main focus points, but its home entertainment arm has suffered annual losses for the past five years. Some larger and highly cost-efficient rivals such as Samsung Electronics have taken market share at the expense of the Japanese manufacturer.
"This is very positive. They've had a lot of trade with each other in the past and to have Honda openly backing them up like this should be good," Chibagin Asset Management fund manager Hiroaki Osakabe said.
According to the Nikkei business paper, a five percent stake made up of common stock could see Honda become a major shareholder in the business.
Sources close to Pioneer said on Tuesday that Pioneer may apply to the Japanese Government for a financial support, with the Government believed to considering a 30 billion yen injection.
The news has seen Pioneer?s shares jump 7.5 percent and Honda?s shares rise by 1.7 percent.