According to Neikki Asian, the last remaining piece of Japan-based audio brand and manufacturer, Onkyo Home Entertainment Corporation, has filed for bankruptcy. The move occurred on Friday, May 13th 2022 (ironic) in Osaka District Court. It was revealed that Onkyo had total liabilities of around 3.1 billion yen ($24 million).
Onkyo – A Brief History
Based in Osaka Japan Onkyo, began life in 1946 under the leadership of Takeshi Godai. The word Onkyo is Japanese for “sound acoustics”. Since that time Onkyo has made a lot of popular home AV products, including speakers, home theater receivers, CD players, and other hi-fi components.
Some of Onkyo’s successes also included compact audio systems and home-theater-in-a-box systems. There was also a time when Onkyo-made speakers were highly sought after.
Onkyo even entered the market briefly on the HD-DVD side of the Blu-ray/HD-DVD war, but that didn’t turn out so well. Fortunately, that was a tiny part of their business and, at the time, was not a factor in its financial health.
In 2015, Onkyo made a strategic move to purchase Pioneer’s Home AV product category (Pioneer retained ownership of its Automotive audio and other categories).
The Hammer Begins to Fall
Shortly after the Pioneer purchase, things started to decline for Onkyo. Although they had OEM (original equipment manufacturer) subsidiaries that manufactured audio, home theater, and speakers for other brands which had brought in revenue, they gave that up in March 2022.
We at eCoustics have been following developments on Onkyo’s company status, which included the sale of its audio/video business to Voxx International and Sharp in June of 2021. The sale also included distribution rights to the Onkyo, Integra, Pioneer, and Pioneer Elite brand names in the Americas.
Tip: Voxx (formerly Audiovox) also owns the Klipsch Group (Klipsch, Jamo, Energy, and ProMedia speakers) amongst other product brands.
In April 2022, two Onkyo-owned subsidiaries (Onkyo Sound Company Ltd, and Onkyo Marketing Company Ltd) filed for bankruptcy, setting the path for the current situation.
Here is an overview of critical factors contributing to Onkyo’s Bankruptcy according to CEO Toru Hayashi:
- The canceled Viper Holdings/Sound United buyout of Onkyo in 2019
- An unfulfilled deal to generate cash is a debt-for-equity swap with private equity groups.
- Time delays with both of the above deals (and others being pursued) added to draining cash.
- Languishing product sales.
- COVID closed world markets, while costs continued to drain cash
- Supply chain challenges – especially the semiconductor shortage.
- Delisting from the Tokyo Stock Exchange
- Asset sale Onkyo Sports Co. Ltd
- Asset sale – Digital Life business to private equity fund EBO
- Asset sale – E-Onkyo, sold to a “French company”
- Asset sale – Onkyo Co. Ltd., sold to MBO
- The bankruptcy of Onkyo Sound Co. Ltd.
- The bankruptcy of Onkyo Marketing Co. Ltd.
For a more complete list, check out the report by Strata-Gee.
The Story Isn’t Necessarily Over
Bankruptcy is never a good sign for a company trying to survive, but it doesn’t always mean the absolute end. As with many companies that face this situation, although unlikely at this point, it is possible that Onkyo could survive with reorganization with new leadership and investment.
Also, if Japan-based Onkyo dies, VOXX and Sharp still own Onkyo’s AV business and the rights to use the Onkyo brand name in select regions. Whether VOXX and Sharp will elect to continue with the same manufacturing, product selection, and branding is up to them.
As of now, both the Onkyo USA and Pioneer Electronics websites are still offering AV product selections, but nothing new has been released in a while. However, that is not an isolated issue as the chip shortage and supply chain issues have delayed the release of several AV products during the past or so for Onkyo/Pioneer and other brands.
Another question is whether VOXX and Sharp will continue with Onkyo’s Integra brand, targeted at the residential custom installation market.
UPDATE: Voxx International/Premium Audio Company Responds to Onkyo Bankruptcy – Onkyo and Integra branded AV products will continue, along with Pioneer and Pioneer Elite.
What are your memories of Onkyo products? Tell us in the comment section below.
Eliut
May 16, 2022 at 4:42 pm
Sad to see Onkyo’s demise. I still own their powerful TX-NR1000 receiver which was years ahead of the competition 20 years ago. However, even then, the company failed to keep its promises to make that a future proof unit and soon discontinued it. Sustainable innovation and loyalty to customers are indispensable for brand loyalty and ensured success. Onkyo failed on both counts.
Michael Strange
May 16, 2022 at 7:20 pm
Ted, we had some good times, made some lifelong friendships developed some excellent product and did some great marketing during our tenure together. The first THX Receiver, The Snake Cam in our advertising and so much more.
Dave J
May 17, 2022 at 12:33 am
This situation leaves me wondering about buying future ONKYO products since the original ONKYO is gone. I’ll have to see what happens down the road.
ORT
May 17, 2022 at 1:38 am
I have owned and enjoyed Onkyo for decades. I have an Onkyo TX-NR818 that is still superb at delivering music and movies.
I have given my brother and my son each an Onkyo AV Receiver. I have also bought and enjoyed Pioneer and Pioneer Elite equipment too. It is my hope that things turn around for Onkyo.
If they can fail, I fail to under stand how some companies that sell equipment that costs as much as a fine automobile or even a nice home in the Heartland of America are not long extinct.
I submit there are more morons than millionaires out there. Or at least they are one and the same. Perhaps when it comes to the high end, these maroons are the rear end.
But Buddha bless ’em all the same. I wish Onkyo and by association Pioneer/Elite good luck in coming back!
ORT
Charles Shay
May 17, 2022 at 4:00 pm
My Onkyo turntable was my introduction to a ‘real’ hi-fi record player and sent me off on a lifelong pursuit of vinyl bliss. I remember we were in an older house, raising two kids and floor vibrations required I hang a shelf from the ceiling to isolate the table. Made hundreds of cassette tapes from that system on my Onkyo dual cassette player/recorder the TA-RW404 which I still have along with those hundreds of cassettes. Might add that they sound great even on the multi-thousand dollar system I am blessed to now have. Best of luck to the Onkyo/Pioneer folks…and thank you!
Dave Dickinson
May 17, 2022 at 10:06 pm
Been an Onkyo supporter for 30+ years, but gradually felt disillusioned by Onkyo’s lack of support for existing customer-owned products (receivers, specifically). Like a previous commenter, I too still own a mighty TX-NR1000 receiver. But I was so disappointed when Onkyo broke promises about this receiver. Never-released HDMI firmware updates, which NEVER achieved true single cable functionality, the rapid demise of Net Tune internet radio, the future card-based products which never happened, the difficulty in obtaining replacements for the HD-Radio card I loved, which seemed to fail prematurely, and the premature failures of other Onkyo receivers I have owned, and the inevitable loss of a radio streaming service (Spotify, etc.) after a firmware update. Issues like these have stopped me from buying any Onkyo products during the last decade or so, because IMHO, Onkyo seems not to care about the customer who purchased an Onkyo receiver yesterday, instead pushing the customer to purchase the latest whiz-bang receiver tomorrow. Another thing that bugged me was that Onkyo stopped making fantastic remotes with backlit buttons, and learning capabilities, with which you could duplicate ANY IR remote command.
I don’t know what to buy now; just have to wait awhile to see if Onkyo decides to keep the customers happy, instead of only the stockholders
Jack P
May 18, 2022 at 3:43 pm
Disappointing to hear of Onkyo current issues. I bought my first Onkyo receiver in 1992 and retired it in 2017. My second was the TX-SR343 and replaced it with the Yamaha TSR-700. I also owned an Onkyo CD player and a Cassette player. No issues, nothing but good memories over the past 30 years with Onkyo.