First half financial results of fiscal 2008 (ended September 30, 2007) Q&A Summary

	What are the reasons for the significant growth in sales of flat-panel TVs in Europe and Asia?

	Flat-panel TVs, particularly plasma TVs, have shown favorable growth in production and sales on a global basis. In Europe and Asia, the sales and marketing divisions have implemented various initiatives to penetrate the market with the products such as promoting the advantages of plasma TVs to the customers on the retail level. Sales of plasma TVs exceeded that of LCD TVs for 37-inch or larger flat-panel TVs in Australia and New Zealand as well as in France, Germany and England. We believe that Matsushita can achieve sales growth by implementing products and marketing strategies.

	In the U.S. market, sales declined compared with that for the same period last year and the operating profit decreased to less than a half of that for the same period last year. It seems that the market conditions in the U.S. are becoming worse. What do you think about this situation?

	Downturn in the U.S. market is partly due to the effects of large-scale structural reforms in sales companies and is not due to competitiveness of products or prices, and Matsushita does not think the market condition in the U.S. is becoming worse. In the U.S., there were sharp price declines in the market before the year-end shopping season of last year, resulting in an increase of inventory in the beginning of 2007. However, in fiscal 2008, we succeeded in reducing such inventory. In the second quarter, Matsushita received 1.4 times as many orders for delivery to retailers from sales companies as those received in the first quarter. Matsushita sees this as a result of the strengthening of product and marketing strategy collaboration, such as the success of the Global Plasma Roadshow and the launch of 42-inch full HD plasma TVs.

	How does Matsushita evaluate the impact of VIERA Link on sales increase? (Note that in the U.S., Canada and some other regions, VIERA Link is sometimes called EZ-Sync.)

	VIERA Link is a function which allows users to control a variety of AV equipment with a single remote controller. Although it has not yet fully penetrated in the global market, its linkage with the door intercom has received high market acclaim in Japan. In the U.S., the proportion of consumers purchasing plasma TVs along with theater racks to create home theater systems has risen to about 30% in some stores, and about 50%, depending on the season. In this way, promoting the link function has largely contributed to sales increase.

	Has the sub-prime loan problem had any particular influence on Matsushita? Will such problem have any effect on the coming year-end shopping season particularly on Matsushita's goal to increase the proportion of larger flat-panel TVs?

	The management of Matsushita was not influenced at all by the sub-prime loan problem in the first half of fiscal 2008. Although it is difficult to predict when, where and how the issue will actualize in the coming year-end shopping season, so far, we have seen no influence on the orders for our major products for the coming year-end shopping season in various regions including the U.S. However, since this problem may give a very large impact on the management, Matsushita regards the problem as a management risk factor and will keep a close eye on this issue. Although the percentage of 50-inch or larger models of flat-panel TVs sold is becoming high in the U.S. market, this is within our expectation. Matsushita does not think that sub-prime loan problem will have a direct influence on our target for sales of larger-screen TVs in the year-end shopping season.

	In the U.S. market for flat-panel TVs, VIZIO brand TVs have emerged in the first half period, acquiring certain market shares. What does Matsushita consider the market conditions where low-priced products are increasing market share?

	From the past, the U.S. market has seen the rise and fall for various brands of fast-growing products. However, VIZIO has gained more than a 5% market share in an extremely short period of time so far, and we find it necessary to take a more cautious look at it than ever. However, we have seen no need for a big change of policy.

	Matsushita has set a challenging sales price for plasma TVs, even for full HD models. Will such pricing have a negative impact on profitability? Please tell us about the earnings trend of plasma TVs.

	Regarding the cost of panels for full HD plasma TVs, as of today, the yield ratio for full HD models produced at the fourth domestic PDP plant in Amagasaki has improved to the level close to that for HD models. Compared with LCD TVs, plasma TVs require fewer manufacturing processes and material items and thus the total process cost is lower. If Matsushita can improve the yield ratio, the cost of full HD plasma TVs, as well as that of conventional plasma TVs, would be lower than that of LCD TVs. The profitability of PAVC is strong, and cost reductions in respect of plasma TVs, its major product category, have been conducted as scheduled, even for full HD models.

	Will there be any changes in the annual sales targets for flat-panel TVs, which consist of 5 million units of plasma TVs and 4 million units of LCD TVs?

	Sales of plasma TVs in the U.S. were less than expected in the first quarter, and in the first half of fiscal 2008, Matsushita could not cover the gap sufficiently with the expected number of sales in the other regions. At present, Matsushita expects to sell more than 3 million units in the second half, and it does not intend to change the sales target of 5 million units for the full fiscal year. Matsushita believes that it is possible to achieve this goal. In the first half, sales of LCD TVs were slightly lower than estimated, due mainly to the difficulty in procuring panels from the external suppliers. However, this decline is not big enough to prevent us from realizing sales of 4 million units. Matsushita does not intend to change its goal to sell a total of 9 million units of LCD and plasma TVs.

	In the third quarter, Matsushita plans to expand and increase sales of flat-panel TVs in the standard manner, but will there be any changes in its strategies for the U.S. market, larger flat-panel TVs or higher resolution TVs? Also, what are Matsushita's plans in product development for the future?

	Matsushita thinks that the basis of its sales strategy is to create competitive products, and proactively promote them so that they will be accepted by consumers. In addition to larger panels and higher resolution of flat-panel TVs, Matsushita intends to strongly promote its eco-friendliness and "link" function, which is one of Matsushita's strong points, also in the U.S. market. In product development, Matsushita intends to promote thinner flat-panel plasma TVs.

	How will Matsushita popularize Blu-ray worldwide toward the year-end? How does Matsushita view the future prospect of split in opposing formats?

	The purpose of developing Blu-ray is to realize longer recording time for high-resolution images in accordance with the digitization of broadcasting. Thus, Matsushita has not changed its basic attitude of keeping the necessary intellectual property and added-value in Japan. At present, the existence of two opposing formats is affecting the overall market, and Blu-ray has not been popularized as much as expected. However, broadcasting formats have already begun shifting to digital formats in some European countries. In consideration of the similar shifts scheduled to take place in the U.S. in 2009, and in Japan in 2011, Matsushita firmly believes Blu-ray will come to be recognized as the recorder of the next generation. Matsushita intends to promote development of its products and businesses accordingly.

	In North America, prices for Blu-ray disc players and HD DVD players both declined to prices half those of the previous year. Some shops sell Blu-ray disc players and HD DVD players together with software. What does Matsushita think about this ever-intensified competition?

	To promote the popularization of next-generation DVDs, Matsushita has developed and sold disc players at lower prices, but Matsushita has no intention of taking part in price competition. Matsushita intends to strengthen its price competitiveness and plans to take part in a sound competition in the U.S., thereby promoting the popularization of next-generation DVDs.

	What were the factors for favorable sales of automotive electronics in the first half?

	Automotive electronics-related products have shown favorable growth, due mainly to strong sales of the Strada series of car navigation systems. The sales of components and devices to automobile manufacturers by overall Matsushita Group, including PED, are steadily growing. Favorable sales were recorded for automotive electronic equipment on the whole, including car navigation systems for consumers, components and devices for automobile manufacturers or automaker markets.

	How were sales of home appliances in Japan?

	While the home appliance industry in the Japanese market itself showed a little decline from the previous year, Matsushita's major household appliances maintained their sales amount, thereby steadily improving its share in the domestic market.

	What are the factors for the increase in overseas sales of home appliances?

	While there is an intense global competition in the area of AV equipment, for household appliances, which requires understanding of the different lifestyles of respective regions, there are many manufacturers which are deeply rooted in the local community of regions. Panasonic products incorporate technologies that are differentiated from other companies- for example, Matsushita's refrigerators use a unique vacuum insulating technology; Matsushita's washing machines have achieved reduction in water and energy consumption and operation with less noise. Matsushita thinks its products are accepted globally for these reasons. In its new three-year management plan, GP3, Matsushita plans to proceed with promotion of the global expansion of household appliances in earnest, thus overseas expansion of household products from fiscal 2009 is expected to give Matsushita substantial leverage.

	How big is the impact of change in the exchange rate on overseas sales of home appliances? Moreover, what is Matsushita's market share for major products, such as air conditioners, refrigerators and microwave ovens?

	The growth rate for the first half of fiscal 2008 was 20%, or 11% on a local currency basis, against the previous year's air conditioner sales and 36%, or 26% on a local currency basis, for washing machines. As for refrigerators, there was 40% growth in sales, or 30% on a local currency basis. Microwave ovens saw a 17% growth, or 8% on a local currency basis and compressor sales grew 19%, or 10% on a local currency basis. Almost all of these products have recorded double-digit sales growth even on a local currency basis. Matsushita does not have data for global market share, but the estimated share in Japan is 1st place for air conditioners and refrigerators, 2nd place for washing machines, and 3rd place for microwave ovens.

	Prices for raw materials have been rising. What are the effects of such rising prices on the sales price of products and on present and future management strategies?

	Prices of raw materials for rare metals, rare earth (elements) and crude oil have been rising significantly. Although such rise in prices does not have such a big impact on our business plan, we should not have an optimistic outlook in respect of this issue. Matsushita will venture to reserve materials and resources as allowed, but essentially, Matsushita believes it should offset the negative effects of rising raw material prices by utilizing its wisdom and innovative ideas at the product development stage. Even if there is a certain significant increase in raw material prices in the second half of the period, Matsushita will strive to offset these negative effects by making companywide efforts.

Disclaimer Regarding Forward-Looking Statements
This Q&A 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 Q&A 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 Q&A. 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, China 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, the Chinese yuan, 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; the possibility of incurring expenses resulting from any defects in products or services of the Matsushita Group; the possibility that the Matsushita Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Matsushita Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, and deferred tax assets; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes and other events that may negatively impact business activities of the Matsushita Group. The factors listed above are not all-inclusive and further information is contained in Matsushita's latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

First half financial results of fiscal 2008 (ended September 30, 2007) Q&A Summary

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