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Daikin and Matsushita -Panasonic- Agree to Form Joint Venture in China To Produce Motors for Air Conditioning Compressors.

OSAKA, Japan -- Daikin Industries, Ltd., a global leader in the manufacture of commercial and industrial use air conditioning systems, and Matsushita Electric Industrial Co., Ltd., (MEI (NYSE:MC)) best known for its Panasonic brand of consumer electronics and digital communication products, today announced that the two companies will establish a joint venture company, Daikin Motor Suzhou Co., Ltd., in China. The new company will manufacture and market motors for compressors in home and industrial-use air conditioners.

The combined new venture investment is U.S.$20.8 million. Daikin holds 60 percent of the venture and Matsushita has the remaining 40 percent. The company will be formed in September 2004. Production will commence in December.

Capitalizing on the motor development and manufacturing technologies of the two companies, Daikin Motor Suzhou will produce and sell Daikin hermetic motors* and Matsushita hermetic motors which Matsushita's motor unit has been supplying to Daikin.

In 2004, 6.7 million home air conditioners and 700,000 industrial units are expected to be sold in Japan alone. Worldwide, it is estimated that 50 million home units, including some 20 million in China, and 11 million industrial units are sold annually. As the market grows further led by China and other Asian countries and Europe, the demand for the compressors and their motors is expected to increase.

The new company will pursue manufacturing highly-efficient and cost-competitive products in the world market.

*Hermetic (airtight seal) motors are commonly used in compressors for air conditioners and freezers.
Outline of Joint Venture

Company Name: DAIKIN MOTOR SUZHOU CO., LTD.

Location: Zone 3, Suzhou Industry Park, Suzhou, China

Floor Space: 3,300 square meters

President: To be appointed by Daikin

Capital: U.S.$20.8 million (approx. 2.3 billion yen)

Ownership Ratio: Daikin 60%, Matsushita 40%

Main Business: Production and sales of hermetic motors for
 air conditioning compressors

Establishment: September 21, 2004

Operation: Planned to commence in December 2004

Projected Sales: Approx. 4.2 billion yen (for the first fiscal
 year)

Projected Number of Approx. 350 (for the first fiscal year)
 Employees:


About Daikin Industries, Ltd.

Daikin Industries, Ltd. is a global leader in the manufacture of commercial-and industrial use air conditioning systems and holds more than one-third of the market share in Japan. Daikin is also one of the leaders in the fluorochemicals industry, with an approximately 20% share of the world market. Daikin boasts an unparalleled combination of mechanical, electronic, and chemical expertise as well as robust R & D capabilities. The company continues to leverage these strengths to create new, innovative products and flexible, highly efficient production systems. Daikin is a dynamic global company with a well-established presence in five major areas: Japan, China, Southeast Asia, Europe, and North America. Thus, Daikin is poised to excel in an increasingly borderless business environment.

About Matsushita Electric Industrial Co., Ltd. (Panasonic)

Matsushita Electric Industrial Co., Ltd., best known for its Panasonic brand name, is a worldwide leader in the development and manufacture of electronic products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the company recorded consolidated sales of U.S.$71.92 billion for the fiscal year ended March 31, 2004. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya, New York (NYSE:MC), Euronext Amsterdam and Frankfurt stock exchanges. For more information on the company and its Panasonic brand, visit the Matsushita website at http://www.panasonic.co.jp/global/top.html.

Disclaimers Regarding Forward-Looking Statements

I. Daikin

The data contained in this press release may include information concerning future business predictions. These are merely predictions made by the company, and are subject to change according to the situation. Moreover, they are provided solely for the purpose of information, and are not aimed at involving users in securities investment. We request that each customer make his or her final investment decision personally.

II. Matsushita

This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Matsushita and its group companies (the Matsushita Group). To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Matsushita Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Matsushita Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Matsushita undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Matsushita in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.

The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, Asian currencies and other currencies in which the Matsushita Group operates businesses, or in which assets and liabilities of the Matsushita Group are denominated; the ability of the Matsushita Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the ability of the Matsushita Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Matsushita Group to maintain competitive strength in many product and geographical areas; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; and fluctuations in market prices of securities and other assets in which the Matsushita Group has holdings; as well as future changes or revisions to accounting policies or accounting rules.
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Publication:Business Wire
Geographic Code:9JAPA
Date:Aug 30, 2004
Words:1037
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