Despite Bankruptcy Onkyo, Pioneer, Elite AV Drives On!
Onkyo: Not Completely Dead Yet!
Over the last couple of years we’ve been following Onkyo’s fight for survival, from the potential Sound United acquisition, Onkyo USA closing down and the AV business being taken over by the Klipsch parent company Vox, to the company’s insolvency just months ago. Last Friday we received some tragic news when Nikkei Asia reported that Onkyo Home Entertainment filed for bankruptcy Friday, May 13th at Osaka District Court. Total liabilities have been estimated at around ¥3.1 billion ($24 million USD). After valiant efforts and positive signs that Onkyo may be getting back into the saddle, it looks like the company will be riding off into the sunset like Alan Ladd’s Shane, complete with audiophile Joeys calling out his name. The current era has been particularly tough on the audio industry.
We reported a year ago that Onkyo showed signs of closing the gap between operational costs and profit but sadly, none of the “ifs” seemed to go Onkyo’s way ever since. After being delisted from the Tokyo Stock Exchange last August, Onkyo saw two of its major subsidiaries file for bankruptcy just last March, including Onkyo Sound Co. Ltd., an Onkyo OEM that sold audio equipment under other brands, and Onkyo Marketing Co. Ltd, responsible for business development in the Japanese audio market.
The Years-Long Decline of Onkyo Home Entertainment
- October 2019: Sound United deal to buy Onkyo/Pioneer falls through
- July 2020: Onkyo USA shuts down US distribution
- July 2020: Onkyo/Pioneer AV division sold to Voxx International, parent company of Klipsch
- Nov 2020: Onkyo struggles with insolvency
- Aug 2021: Onkyo delisted from Tokyo Stock Exchange
- Jan 2022: Onkyo presents new line of AV receivers CES ‘22
- April 2022: Two major Onkyo divisions file for bankruptcy
- May 2022: Onkyo files for bankruptcy, ceases operations
Onkyo told Nikkei Asia that it: “tried to maintain business on a smaller scale but could not stop its cash-flow problems from worsening.” According to Yuji Masaki, head of the research department at Teikoku Databank's regional office, Osaka said:
"[Onkyo] tried to stay alive through various businesses such as headphones and earphones, but measures were halfway. [Their disposal of businesses] were one step behind in timing as well."
Observers of the AV market are well aware that Onkyo’s troubles go further back than anything listed here. The company’s downfall speaks more to the changes in the consumer electronics industry itself and the shift through the 2000s away from physical media to software and Internet-connected media consumption and diversification in how we listen and watch. The challenges felt throughout the industry were compounded by COVID and widespread semiconductor shortages that especially afflicted Onkyo.
Toru Hayashi, President and CEO of Onkyo Home Entertainment Co. Ltd submitted documents for his company’s bankruptcy filing that included a very Japanese apology to all for not succeeding in their endeavor to get Onkyo back on track.
“We sincerely apologize for the inconvenience caused to our business partners, shareholders, and related parties. I would like to thank you...”
In his letter outlining some of the problems, Hayashi says persistent chip shortages: “has not improved at all.” According to market analyst Ted Green of Strata-Gee:
“This hampered the company’s ability to introduce new products…or to be able to deliver current ones. Also, the chip shortage killed off their ability to scale their OEM manufacturing business, as OEM customers couldn’t get enough chips for their projects either.”
Yes Virginia, There Will Still Be Onkyo AV Receivers
The Onkyo we knew, the Japanese company with a history that dates back to 1946 and has been majority owned by the Ohtsuki family will cease to exist. Think of it as the soul of the company that’s lost. It’s unlikely that even Elon Musk will step in to save Onkyo from bankruptcy and pay off the debts of a company that couldn’t make ends meet. But the Onkyo and Pioneer brands will continue to live on! The company’s audio/video business is owned by Voxx International and it even has a contract with Sharp to manufacture its AV products. In fact, it’s unlikely that most consumers, especially those looking at new Onkyo AV receivers, will even notice a change. Premium Audio Co is a joint venture from Voxx and Sharp since September 2021 and runs several popular home Audio Video brands including Onkyo, Pioneer, Elite, Integra as well as Klipsch, HECO and Energy speakers.
So, fans of home audio will still see the familiar Onkyo, Pioneer and Elite nameplate on AV receivers for some time into the future. Warranties will continue to be honored and its AV receivers and other equipment will continue to be made, provided they can fish for the chips required to assemble and fix them. Who knows, maybe under Voxx, Onkyo will be injected with new life and continue to live on and even prosper in the leaner, more adaptable form that today’s market demands.
Onkyo Going Out of Business? - 2021 YouTube Discussion
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Wayde is a tech-writer and content marketing consultant in Canada s tech hub Waterloo, Ontario and Editorialist for Audioholics.com. He's a big hockey fan as you'd expect from a Canadian. Wayde is also US Army veteran, but his favorite title is just "Dad".
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