TOKYO (AP) _ Matsushita Electric Industrial Co. is increasing overseas production, promoting more local hires to management and staking out a bigger piece of the world's cellphone market.

The makers of the Panasonic brand will raise overseas production by 70 percent to 3.4 trillion yen ($28 billion) in fiscal 2003 from 2 trillion yen this fiscal year by producing more in Eastern Europe and China, managing director Yukio Shohtoku said Monday.

Increasing cellphone sales overseas is the main way Matsushita hopes to beef up foreign sales. It hopes to grab 10 percent of the global cellphone market by 2003, up from 5 percent _ the biggest for a Japanese handset maker.

In order to regionalize its operations, Matsushita will start promoting more local people to management positions, including the top jobs. Of its 250 global division companies, about 35 presidents are non-Japanese, mostly in North America, according to Matsushita.

``We do not want to give the impression that we are only paying lip-service to our policy of developing local workers,'' Shohtoku told reporters.

Matsushita will also move production to where it's more profitable, discontinuing making microwaves in the United States and shifting color TV production from England to the Czech Republic.

Matsushita is trying to shift its overall business from manufacturing electronic products _ a sector increasingly entangled in a price war with South Korea and other Asian nations _ to developing services such as burglar-alarm security systems and setting up large video display monitors at public places.