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Japanese Parts Suppliers in North America Expanding Production
Capabilities for New Plants of Honda and Toyota Shrinking North American market forcing some suppliers to
consolidate or relocate their manufacturing facilities to Mexico

Apr. 2, 2008 No.663


  In North America, Toyota ran the Texas Plant (with an annual capacity of 200,000) in 2006; began to contract out the production of the Camry (100,000) to SIA of Fuji Heavy Industry in 2007; and expanded the annual production capacity of the Mexican Plant from 30,000 to 50,000. Toyota will begin operation of the 2nd Canadian Plant (150,000) in 2008 and the Mississippi Plant (150,000) in around 2010.

  Nissan increased the annual production capacity of the Aguascalientes Plant in Mexico from 200,000 to 350,000 in 2007. Honda will begin production in 2008 at the Indiana Plant (200,000 vehicles) and run the engine plant (200,000 engines) adjacent to the complete vehicle plant in Canada.

  Responding to the expansion of production by Japanese auto manufacturers in North America, Japanese parts suppliers are expanding their production capabilities by building new plants or improving their facilities. Many Japanese parts suppliers, however, lost profitability through the shrinkage of the North American markets. Under the circumstance, these suppliers consolidate their production bases and transfer their manufacturing to Mexico.

  The following outline the recent movement of the Japanese auto parts suppliers in North America (the reported are for about one year by early March in 2008).

Supply hubs are getting ready for Honda's new Indiana plant and Toyota's new Mississippi plant

  As to building new manufacturing bases and new plants, supply hubs are getting ready for the new plants of Honda and Toyota. Suppliers are building new production bases, such as Okamoto for interior materials, Keihin for fuel supply and air conditioning parts, and TSTECH for seats, either of which supplies the parts to Honda's new Indiana Plant.

  Toyota Gosei will build a new plant to manufacture interior/exterior plastic parts, and Toyota Auto Body will have its first subsidiary in the US. These Japanese parts suppliers will supply the products to Toyota's new Mississippi Plant. Toyota Boshoku and Nifco will also build new plants respectively to supply for Toyota.

  In addition, Ibiden and Kyoho Machine Works will begin manufacturing in the US; the former will manufacture DPF (Diesel Particulate Filter) for the first time as a Japanese parts supplier, and the latter pressed parts (at their first offshore manufacturing base).

Movements of Japanese auto parts suppliers in the US: building new manufacturing bases and new plants

(The following show the movements of Japanese auto parts suppliers for about
one year by early March 2008, which are listed in Japanese phonetic order.)

Ibiden to begin manufacturing of DPF for Ford in the US by 2009

  Ibiden announced in May 2007 to begin manufacturing of DPF (Diesel Particulate Filter) in the US by 2009 (it will be the first Japanese DPF supplier that will manufacture in the US). It is in process of plant site selection. At the beginning, Ibiden will supply the products to Ford, while intending business with other manufacturers. The shipment value of the exported products to Ford from Japan was around ten billion yen in the year ended March 2007.

Okamoto to start running the interior material plant with a monthly production of 800,000 meters in 2008 and supply the materials to the Honda Indiana Plant.

  Okamoto established Okamoto Sandusky Manufacturing LLC to manufacture interior materials in Ohio in July 2007. It is capitalized at five million dollars and wholly owned by Okamoto USA, the Okamoto's US-based corporation. Okamoto will manufacture 800,000 meters of interior materials per month at the new plant planned to start operation in August 2008. Okamoto will supply the interior materials mostly for seats, ceilings and panels which will be supplied to the Honda's new Indiana Plant, while developing new distributors.

Kyoho Machine Works builds a new plant supplying pressed parts to NUMMI

  Kyoho Machine Works established Kyoho Manufacturing California in Stockton, California, which is its first offshore plant to manufacture pressed parts. Kyoho Manufacturing California has started supplying automotive body parts, mostly welded parts, to NUMMI since January 2008. The new plant will be equipped with a large press machine in 2009 for consistent manufacturing from pressing to welding. Kyoho Machine will invest total 8.7 billion Yen.

Keihin builds a foothold to supply fuel-feeding and air conditioner products to the Honda's Indiana Plant

  Keihin established Keihin Michigan Manufacturing LLC in Michigan to manufacture fuel-feeding and air conditioner products in spring 2007. It is capitalized at ten million dollars and wholly owned by Keihin Indiana Precision Technology, Inc (Keihin takes a stake of 74.08%). The plant will start running with annual production capabilities of 680,000 intake manifolds and 200,000 HVAC (Heating, Ventilating and Air Conditioning System). These products will be supplied to the Honda's new plant.

Kobe Steel begins commissioned processing high-performance coating

  Kobe Steel established KOBZELCO Advanced Coating (America), Inc. in Buffaro Grove, Illinois. It began commissioned processing of high-performance rigid film coating with a physical vapor deposition (PVD) machine in October 2007. It was capitalized at three million dollars. The PVD coating prolongs a part life expectancy by two to ten times. European high end vehicles employ the technology for engine parts and so on. Japanese auto manufacturers are expected to employ the PVD coating more than ever. Kobe Steel plans to expand sales through commissioned processing from 300 million Yen in 2007 to two billion Yen total in both Japan and the US.

Sekisui Chemical mass-produces plastic films for laminated glasses in the US

  Sekisui Chemical began mass-production of plastic films for laminated glasses in October 2007 at SEKISUI S-LEC AMERICA, LLC. It will manufacture and supply to Japanese auto manufacturers ordinary plastic films and sound acoustic films between laminated glasses for six million vehicles per year. Total investment will be about five billion Yen. Maximizing effects from local manufacturing, including significantly shortened delivery time (from about four weeks to a few days), Sekisui plans to increase the market share of the plastic films to 30% in North America by the end of 2010 (22% in 2006).

TS Tech builds a new automotive seat plant for the Honda's Indiana Plant

  TS Tech established TS Tech Indiana, LLC (at an investment of ten million dollars) to manufacture automobile seats in Indiana in April 2007. Responding to the start of operation of the Honda's new Indiana Plant, it will begin production of automotive seats for 200,000 vehicles in autumn 2008. The investment will be 17.5 million dollars. TS Tech expects to have sales of 150 million dollars in 2011.

Toyota Gosei to build a new plant to manufacture interior/exterior plastic parts for the Toyota's new Mississippi plant

  Toyota Gosei will build a new plant of TG Missouri Corporation to manufacture interior/exterior plastic parts in Batesville, Mississippi, which will begin operation in 2010. TG Missouri Corporation will manufacture peripherals of instrument panels, console boxes, radiator grilles and so on every year for 150,000 of the Highlander manufactured by Toyota at the Mississippi plant. The investment will be 2.1 billion yen. Toyota Gosei expects to have sales of 3.4 billion yen in 2010.

Toyota Auto Body establishes its first US subsidiary for manufacturing, while building a plant adjacent to the Toyota's Mississippi plant

  Toyota Auto Body established Auto Parts Manufacturing Mississippi Inc. to manufacture pressed/welded parts and plastic parts in August 2007, which is its first manufacturing subsidiary. It is capitalized at 6.4 billion yen and wholly owned by Toyota Auto Body. With an investment of about 22 billion Yen, Toyota Auto Body will build a plant in Baldwin near the Toyota's Mississippi which will start running in 2010. The new plant will begin manufacturing around 2010. It expects to have sales of 18 billion Yen in 2010.

Toyota Tsusho manufactures tufted carpet for high end vehicles with Hasetora Spinning

  Toyota Tsusho established TUFTORA AUTOMOTIVE CARPET INC. in Chattanooga, Tennessee, with Hasetora Spinning in July 2007 to manufacture tufted carpets for high end vehicles. TUFTORA is capitalized at 240 million yen, in which Toyota Tsusho and Hasetora Spinning have a stake of 60% and 40% respectively. The plant will start running in May 2008 with an annual production capacity of 2.5 million square meters. It will supply the carpet to Japanese auto manufacturers over there, aiming to have sales of 480 million Yen in 2008. For the plant, the new company will rent part of the existing plant; thereby, the initial expenses including facilities are about 420 million Yen.

Toyota Boshoku to build plants for the Highlander and the Sienna

  Toyota Boshoku established Toyota Boshoku Mississippi, LLC in Fulton, Mississippi, in September 2007. Toyota Boshoku will build a new plant to manufacture automotive seats, door trims and floor carpets (with an annual production capacity of 150,000 sets) from 2010. It will supply all of them for the Highlander locally fabricated by Toyota, planning to have annual sales of 25 billion to 26 billion Yen. The investment will be about 9.2 billion Yen. It is capitalized at about 6.1 billion Yen and wholly owned by the North American business control company of Toyota Boshoku.
  Toyota Boshoku established Toyota Boshoku Indiana, LLC in Princeton, Indiana, in November 2007 to manufacture interior parts. It is capitalized at 40 million dollars and wholly owned by the North American business control company of Toyota Boshoku. With the investment of 57 million dollars, it will build a new plant and begin manufacturing of seat frames and urethane for the Sienna locally fabricated by Toyota, and deliver them to adjacent Total Interior Systems-America, LLC, a subsidiary of Toyota Boshoku. It has an annual production capacity of 170,000 sets.

Hi-Lex to build a new plant to manufacture window regulators for Hyundai Motor

  Hi-Lex Corporation will build a new plant to manufacture window regulators for Hyundai Motor and begin manufacturing by summer 2009 (the investment is about 800 million Yen). Hi-Lex plans to make the new plant a subsidiary of DAE DONG HI-LEX Inc., a joint venture manufacturing company in Korea. The new plant will supply the parts to the Alabama Plant of Hyundai Motor and the Georgia Plant of Kia Motors which will start running in 2009. It expects to have sales of three billion Yen after 2010.

Nifco to fabricate industrial plastic fasteners for Toyota

  Nifco established Nifco North American Inc. in Kentucky in March 2003 (capitalized at about one billion Yen). It will build a new plant, which is planned to start running in spring 2008, to manufacture industrial plastic fasteners mainly for Toyota. The new plant will be equipped with an automated line operational for 24 hours to reduce manufacturing costs by 30%. The total investment will be 1.5 billion Yen.

Mitsuchi produces a custom fastener plant

  Mitsuchi built a plant to manufacture custom fasteners in Tennessee where it has a sales subsidiary. It will start running around June 2008. Total investment will be about 320 million Yen. It will supply the custom fasteners to Japanese automotive part suppliers and so on, aiming to have sales of 120 million Yen per year.
Sources: PR materials of part suppliers and news reports by newspapers

Movements of expansion of facilities and manufacturing items with further in-house manufacturing

  In movements of expansion of facilities, Japanese auto parts suppliers will expand production capabilities, including Aisin Seiki for wet friction materials for automatic transmissions, Kikuchi for automotive frame parts, KYB for producing buffers, Koito for head lamps, Tanaka Seimitsu Kogyo for iron rocker arms, TBK for engine pumps, Toyo Tires for tires, Nissin Kogyo for aluminum knuckles, ABS and VSA, NKG Spark Plug for spark plugs, Muro Corporation for precision pressed parts, and Yokowo for onboard communications.

  In movements of expansion of production items, Iida Industry added reinforcement materials for steal plates, Daido Metal bushes and thrust washers for bearings, NHK spring high-performance automotive seat parts, and Mitsubishi Heavy Industries three-dimensional scroll compressors.

  In addition, increase of in-house manufacturing has become a trend: Exedy increased in-house manufacturing of aluminum die-cast products for torque converters, JTEKT aluminum die-cast products for steering wheels, and Yorozu pressed parts for suspension systems.

Movements of Japanese auto parts suppliers: expansion of production capabilities and items

(The following show the movements of Japanese auto parts suppliers for about
one year by early March 2008, which are listed in Japanese phonetic order.)

Aisin Seiki expands the production capacity of 50% for AT wet friction materials and so on

  Aisin Seiki has manufactured and supplied damping materials and AT wet friction materials to AW NORTH CAROLINA, INC and so on, which are Toyota's affiliates since June 2007. Aisin Seiki expects to have sales of about 20 million dollars (about 2.4 billion Yen) in 2009. It plans to improve the production capacity by about 50% by increasing production lines and production efficiency (announced in December 2007).

Iida Industry adds a new exclusive line for reinforcements for steal plates

  In September 2007, Iida Industry built a new exclusive line and began to produce reinforcements for vehicles (plastic reinforcements attached to the inside of door panels and the like). It supplies the products to Japanese auto manufacturers. It invested 50 million Yen. By increasing production of existing parts, it expects to have local sales of 1.5 billion Yen in 2009, which is equal to 1.5 times as much as those in 2006.

Exedy to implement aluminum die-casting facilities to manufacture torque converter shafts in-house

  Exedy implemented production facilities for aluminum die-casting at the EXEDY American Corporation to manufacture stators (fixed wings) in-house (announced in March 2008). It plans to have production capabilities of one million pieces in 2008, and two million pieces by 2010. Exedy will increase in-house production and reduce logistics costs and the like to compensate for poor performance with Ford's poor business, which is the largest customer of the Exedy. It invested about two billion Yen in total.

Kikuchi expands production capabilities of auto frame parts by 200,000 for the Honda's Indiana Plant

  Kikuchi will expand plant facilities of Jefferson Industries Corporation in Ohio, in which it has a stake of 31.3%, to increase the annual production capacity of auto frame parts for about 200,000 vehicles (it will invest about 22 million dollars to increase large press machines and welding lines). According to the source, these parts are for the Civic to be manufactured at Honda's new Indiana plant, which is planned to start running in autumn 2008.

KYB compresses investment in increasing production of buffers to annual production capabilities of 8.8 million

  KYB reduced the investment by 500 million Yen in production at KYB Manufacturing North America Inc. which was planned to finish by March 2008. Because business confidence worsened further and the number of orders began turning to flat. KYB built a building and four production lines (eight production lines were initially planned). It constrained the investment to 2.6 billion Yen (3.1 billion Yen in the first plan). The production capabilities will reach 8.8 million buffers after the investment to increase production (thereby, the production capabilities will increase by 33% from the current capabilities of 6.6 million buffers).

Koito expands the annual production capabilities of head lamps by 600,000 to 3.3 million

  Koito increased the production lines of the Paris Plant (Illinois) of North American Lighting, Inc., its subsidiary, in January 2008. The annual production capabilities were expanded from 1.2 million units to 1.8 million units (the total production in the US was expanded to 3.3 million) to respond to growing demands mostly by Japanese auto manufacturers. The investment was 2.5 billion Yen.

JTEKT increase in-house production of aluminum die-casting parts for steering wheels

  JTECT added a production line for die-casting parts in the plant of JTEKT AUTOMOTIVE TENNESSEE-MORRISTOWN, INC. (the investment was about ten billion Yen) to increase in-house production of aluminum die-casting parts for steering wheels. The new line is planned to start running in 2008, thereby, the current in-house production of the parts will be increased from not more than 5% at the present to about 20%. The in-house production will be increased further to 50 to 60% to improve the profitability and stabilize procurement of parts.

Tanaka Seimitsu Kogyo to manufacture 400,000 iron rocker arms a month

  Tanaka Seimitsu Kogyo plans to increase the production of rocker arms for Honda's V6 engines. For this purpose, it will change the specification of the rocker arm from aluminum to iron. Tanaka Seimitsu Kogyo invested one billion Yen in its subsidiary F.T. Precision Inc. (Ohio), and implemented the facilities matching to iron. The production line will be started up in spring 2009. The initial production scale will be 400,000 parts a month. Tanaka Seimitsu Kogyo will increase the production as a plan.

Daido Metal to increase production items of bearing parts

  Daido Metal will begin production of bushes and thrust washers for auto bearings at Daido Metal Bellfontaine, LLC (Ohio) controlled by its local subsidiary from the middle of 2008. In addition to increase of orders from the US big three, business with Japanese manufacturers has also increased. It plans to increase sales to 5.8 billion Yen in 2009 (the record of 2007 was 3.3 billion Yen).

TBK to increase production of water/oil pumps for engines by eight times

  TBK bought a vacant plant in Indiana to relocate its current plant in the same state there. TBK will begin production of water/oil pumps for engines in May 2008 at the earliest. The production capabilities of the current plant are not enough to respond to the demands arising from the emission gas control regulation in 2010. It plans to expand the production of the pumps by about eight times of the current level to 400,000 a year by March 2010 (the total investment is 1.8 billion Yen). Most of these pumps will be supplied to DMAX (a joint venture manufacturer of engines established by Isuzu and GM), Cummins Inc., Caterpillar and so on.

Toa Industries expands the pressing capacity by 40% for processing high tension materials

  Toa Industries expanded the press working capacity of TOA (USA) LLC. in Indiana by about 40% in January 2008. For pressing light, strong, high tension materials (high tension steal plats), TOA (USA) was equipped with a transfer press machine with a pressing capacity of 3000 tons and 800 tons. The main production items are suspension parts of sub-frame assemblies, cross-member compressors, and frame parts. The total investment was two billion Yen.

Toyo Tires to increase the annual production capacity by 1.5 times to 3.3 million tires plus newly building the 2nd and the 3rd plants

  Toyo Tires invested 230 million dollars in Toyo Tire North America (Georgia) to expand the production capacity (on a passenger car tire basis) by over three times of the current level to 7.3 million tires (according to the announcement in July 2007).
  Toyo Tires will add a new line in the existing plant first to expand the annual production by 1.5 times of the current level to 3.3 million tires in 2009. Toyo Tires will consider OEM supply of the increased tires to Japanese tire suppliers. Then, it will build the second plant in 2010 and the third in 2012 to establish full line production capabilities. In 2010, it aims to sell over 10 million tires in US (in 2006, the sales were seven million tires).

Nissin Kogyo to double the Georgia and to increase the annual production capabilities of the Ohio Plant

  Nissin Kogyo will double the current production capabilities of the plant of Nissin Brake Georgia, Inc. by October 2008, to which it will relocate casting and processing facilities for aluminum knuckles from Nissin Brake Ohio, Inc. to increase the annual production from the current level of 1.6 million to 2.4 million. It will begin production of large calipers (currently, they are exported from Japan), planning to produce 1.2 million a year.
  Nissin Brake Ohio, Inc. increased the annual production from 340,000 to 500,000 ABS (Anti-lock Brake System) and VSA (Vehicle Stability Assist) in total to respond to the launch of Honda's new Accord released in September 2007.

NGK Spark Plug to increase the annual production capabilities of spark plugs by 1.5 times to 60 million

  NGK Spark Plug began construction of the second spark plug plant in the premises of the West Virginia Plant of NGK Spark Plugs. (USA) Inc., its subsidiary, in April 2007. The plant will start running in June 2008 according to the plan. It has annual production capabilities of 20 million plugs. It will invest 1.7 billion Yen. NGK Spark Plug will expand the repair market share to respond to growing demands by local auto manufacturing plants, including Japanese auto makers (the sales of 2006 in the US exceeds 100 million plugs, while the current annual production of the California Plant is 40 million plugs).

NHK Spring begins production of high performance auto seat parts for active headrest mechanisms

  NHK Spring will put production facilities for high performance auto seat parts (invested at 1.6 billion Yen) in NHK Seating of America Inc. (Indiana), its subsidiary. Within 2008, it will launch production and supply seat frames incorporated with the active headrest mechanism parts to locally incorporated Japanese manufacturers. The active headrest mechanism was jointly developed with Toyota and others.

Masuda Manufacturing increase production of small pressed parts for 200,000 vehicles for Honda

  Masuda Manufacturing will increase production of small pressed parts including fuel filler pipes, hinges, etc. at TOMASCO Indiana LLC, a joint venture base in Indiana (Masuda takes a stake of 65%, Marujun 10%, Bestex Kyoei 10% and others 15%). The scale of increase of production is equal to about 200,000 vehicles, responding to the Honda's new Indiana Plant, which will start running in autumn 2008.

Mitsubishi Heavy Industries to begin production of three-dimensional scroll compressors for car air conditioners

  Mitsubishi Heavy Industries will invest about 500 million Yen in Mitsubishi Heavy Industries Climate Control Inc. (Indiana) to establish production capabilities of three-dimensional scroll compressors, which are the major part of a car air conditioner. It will have an annual production capacity of 130,000, and begin production in 2008.

Muro Corporation to expand the production capabilities by 20% for pressed precision parts

  Muro Corporation will expand the production capabilities of precision-pressed parts of Murotech Ohio Corporation (MTO) by 20% in May 2008. MTO manufactures washers placed between the joint parts of transmissions and engines, shims and so on. Those for Honda account for about 50% of its sales, while aiming to widen the sales channel to Toyota, its affiliated companies and others in the future.

Yachiyo Industry begins consistent production of pressed parts in Indiana, while building a new plastic fuel tank plant also

  Yachiyo Industry in January 2008 established a consistent production system for pressed vehicle body parts including a roof panel at Yachiyo Manufacturing of Alabama LLC (YMA) to respond to the Honda's new Indiana Plant (it invested 27 million dollars to build a building and put two press machines). It cut costs for logistics more significantly than those for the current system that it presses parts in Canada and welds them in Alabama.
  Yachiyo Industry will build a new plant in YMA to manufacture plastic fuel tanks, which is lighter by 10 to 25% than iron ones, easier to be formed and more employed. Yachiyo Industry will invest 16 million dollars in both the building and the facilities. The plant is planned to start running in January 2009 with annual production capabilities of 200,000.

Yokowo expands production capabilities of onboard communications

  Yokowo relocated Yokowo Manufacturing of America LLC in Hilliard, Ohio in July 2007 to a new base in the same city, and substantially expand production capabilities of onboard communications such as antennas for satellite digital radios (SDARS), micro-antennas, GPS antennas and the like. The total investment was about 800,000 dollars. Yokowo plans to expand sales of the onboard communication business in North America from two billion yen in 2006 to five billion Yen in 2009.

Yorozu to strengthen its research and development structure, while beginning production/sales of small pressed parts

  Yorozu will strengthen in 2008 its research and development structure and transfer part of prototyping and performance testing for suspensions for North America, because Japanese auto manufacturers including Honda and others also strengthened local development functions, and business with GM is growing. It doubled research and development personnel from five to ten within 2007 in America, and to 20 personnel in 2009.
  Yorozu Automotive Mississippi of Yorozu began production of small pressed parts in summer 2007, which have been outsourced. It will produce reinforcement parts such as brackets and chassis in-house to increase the in-house production rate. Also it will expand sales on a component basis to compensate the decrease in production of the Nissan Canton Plant as a plan (It transferred tandem press machines and the like from Yorozu Automotive Tennessee).
Sources: PR materials of part suppliers and news reports by newspapers

Akebono Brake Industry/Calsonic Kansei etc. consolidate production bases; Kinugawa Rubber transfer part of production to Asia

  There are quite a few cases of consolidation or transfer of production bases, buying out American parts makers, business reorganization of joint ventures with US parts makers.

  Akebono Brake Industry and Calsonic Kansei/Diamond Electric/Nishikawa Rubber/Riken closed some of their plants and integrated their production bases. Topy Industries integrated its subsidiaries and withdrew the passenger car aluminum wheel business. Kinugawa Rubber will transfer 30% of production items to Asia.

  Sumitomo Metal Industries bought out the US Norton Manufacturing with Sumitomo Corporation, and Sojitz bought out Plastic Trim with the Chinese Minth Group. Ashimori Industry terminated the joint production with Delphi (while the business affiliation will be maintained).

Movements of Japanese auto parts suppliers in the US: business reorganization including buy-out, merger, withdrawal, etc.

(The following show the movements of Japanese auto parts suppliers for about
one year by early March 2008, which are listed in Japanese phonetic order.)

Akebono Brake Industry: Itochu take a stake in Akebono's North American Business Control Company, while production is consolidated into two bases

  Akebono Brake Industry announced in March 2007 that the Itochu Group finished taking a stake in Akebono Corporation (North America) (ACNA), which is Akebono Brake's North American Control Company. ACNA bought out the equity of Amak Brake LLC (the subsidiary of ACNA), in which the Itochu Group took a stake of 40%, while the Group took a stake of 20% in ACNA simultaneously by the third party allocation of shares. Akebono Brake Industry aims to expand management resources for the North American business and to streamline the distribution business by maximizing the function of Itochu.
  Akebono Brake Industry will consolidate three production bases to two in the US. It will transfer the production of brake pads, rebuilt calipers and other products from Amtec Brake LLC in Kentucky to Amak Brake LLC in the same state in autumn 2008. Amak Brake invested about seven million dollars to expand the plant, while Amtec Brake will close by the end of 2008. It expects that the transfer will reduce costs by 2.5 million dollars a year such as fixed costs.

Ashimori Industries terminate the contract of joint production of seatbelts in the US and Mexico with Delphi, whereas maintaining the affiliation

  Ashimori Industries terminated the joint venture contract with Delphi Corporation in October 2007. Ashimori Industries took 49% stake in DELPHI AUTOMOTIVE SYSTEMS ASHIMORI LLC., the joint venture company which manufactures automobile seatbelts in the US and Mexico, and DELPHI AUTOMOTIVE SYSTEMS ASHIMORI de MEXICO S.A. de C.V., respectively. It sold off shareholdings to Delphi at about 230 million Yen. Ashimori Industries aims to develop its own business for the future, while maintaining the business affiliation, under which it continues to export seatbelt parts to the Delphi's second plant as before.

Kinugawa Rubber to transfer 30% production of car body sealing parts to Asia

  Kinugawa Rubber will transfer about 30% of car body sealing parts, which TEPRO, Inc., its American subsidiary, to China, Thailand and Japan (TEPRO manufactures about 270 items of ten types of sealing parts, and has supplied to the Nissan plants in the US and Mexico). Items to be transferred are the parts which have a complicated shape, and require human hands for processing. Kinugawa Rubber plans to reduce costs of 400 million to 500 million Yen per year by a series of restructuring programs including personnel cut to restore the profitability of the North American business suffering operation deficit since 2003.

Calsonic Kansei closes the second plant and consolidates production to improve the profitability

  Calsonic Kansei closed the Vicksburg Plant (Mississippi) and the Manchester Plant (Tennessee), which manufacture exhaust system parts, and transferred the production to the Luisburg Plant (Tennessee). To restore the North American business, of which profitability declined ascribable to Nissan's sales slump, Calsonic Kansei will close the second plant, cut less than 10% employees of the US plant, and improve the capacity utilization.

Sumitomo Metal Industry to buy out an American crank shaft machine processing maker with Sumitomo Corporation

  Sumitomo Metal Industry and Sumitomo Corporation, August 2007, basically agreed to buy out Norton Manufacturing Company Inc., a crank shaft machining maker in Ohio, at around the end of 2008. The amount paid for acquisition was 50 million dollars (about 5.8 billion Yen). Sumitomo Metal and Sumitomo Corporation will take a stake of 60% and 40% respectively. Sumitomo Metal has decided to enter into the machine processing (lath turning, polishing, and heat treatment) because auto manufacturers and engine manufacturers contract out the machining process more frequently in North America.

Sojitz buys out an American exterior parts supplier with the Chinese Minth Group

  Plastic Trim International, Inc. (PTI) established by Sojitz and the Chinese Minth Group (taking a stake of 44% and 48%, respectively), in July 2007, bought out Plastic Trim LLC (PTL in Ohio), an exterior parts supplier. PTL manufactures exterior parts including body side moldings, pillars and the like for GM at the Plants in Ohio and Michigan. Sojitz will consider business with locally-incorporated manufacturers and production at the China Plant of Minth.

Diamond Electric closes the Michigan Plant, and consolidates production to the West Virginia Plant

  Diamond Electric closed the Michigan Plant in October 2007 as part of reorganization of the production bases of Diamond Electric Mfg. Corp. Diamond Electric Mfg. Corp., which supplies products to the US big three and others, receives fewer orders for its flagship large ignition armatures (built-in type) than ever. The production will be consolidated to the West Virginia Plant from now on, and strengthen small coils compatible with cylindrical ignition systems of the products. Diamond Electric will make the headquarters next to the Michigan Plant a base to strengthen sales and research and development functions.

Topy Industries consolidates four US subsidiaries to two, and withdraw the passenger car aluminum wheel business

  Topy Industries consolidated its subsidiaries, namely, Topy Corporation and Topy International USA. Inc. (underbody parts of construction machines) to Topy America, Inc., its new wholly-owned company (Kentucky). Topy Industries withdrew from the passenger car aluminum wheel business manufactured by Topy Corporation. Topy Industries liquidated Topy International, Inc., its holding company, and it consolidated its Heavy Damper Truck Wheel Division to the new company. Topy Precision Mfg., Inc. (Illinois), which manufactures metal fasteners including nuts, washers and the like, will survive; however, it has become a wholly owned sub-subsidiary of a subsidiary of Japanese Topy Industries.

Nishikawa Rubber consolidates three rubber sealing parts plants to two

  Nishikawa Rubber closed the New Heaven Plant of three rubber sealing parts plants (Indiana) of Nishikawa Standard Company (NESCO in Indiana) in September 2007. Nishikawa Rubber will invest about 1.08 billion Yen in the Topeka Plant to increase its production capabilities to improve profitability by 660 million Yen per year.

Hitachi Ltd. to consider establishing a control company for the automotive business to control operation of its seven plants

  Hitachi is considering establishing a control company for the automotive business in North America. The control company will control two US plants owned by the Automotive Division of Hitachi, and operation of total seven plants of the former Unisia Jecs, Tokico and Clarion to improve business efficiencies of legal affairs, procurement, transportation activities and the like. Hitachi is expected to establish a new plant in Michigan in 2008 at the earliest.

Riken consolidates three US production bases to the St. Johns Plant in Michigan

  Allied Ring Corporation, which is a Riken's piston ring manufacturing subsidiary, changed the 50-50% joint company from the US Dana Corp to German Mahle GmbH in March 2007. Taking this as an opportunity, Riken will consolidate three US production bases to the St. Johns Plant in Michigan within 2008 to streamline the production and improve the quality and cost competitiveness.
Sources: PR materials of part suppliers and news reports by newspapers

Movements in Canada: Denso to expand the plant, while Showa transfers production from the US

  In Canada, Denso will expand the plant responding to the expansion of the production by Toyota/Honda, and produce cooling modules and so on. Showa transferred assembling of hydraulic power steering pumps to Canada.

  Inoac Corporation will strengthen the affiliation with Canadian Woodbridge Foam. Tokai Rika will increase supply of parts from Asia to the seatbelt production base in Canada.

Movements of Japanese auto parts suppliers in Canada:
Strengthening facilities/affiliation/liquidation, etc.

(The following show the movements of Japanese auto parts suppliers for about
one year by early March 2008, which are listed in Japanese phonetic order.)

Inoac Corporation to strengthen affiliation with a Canadian company for mutual use of the polyurethane foam parts plant

  Inoac Corporation will strengthen the affiliation with Canadian Woodbridge Foam Corp. (WB) for the automotive polyurethane foam business (announced in November 2007). At the end of 2007, both companies made their own subsidiaries in Japan and the US a fifty-fifty joint venture to mutually use their plants. In Japan, Inoac Corporation sold off 50% share in Inoac Kyushu to WB. In North America, Inoac Corporation acquire 50% share in respective four WB's subsidiaries in Texas, USA and Mexico for over two billion Yen total. Inoac Corporation will make these four subsidiaries as supply bases of urethane foam parts, expecting to have sales of 22 billion Yen in 2008.

Keihin liquidate the subsidiary for collecting information and customer services, and consolidate its functions to a new company in Michigan, USA

  Keihin liquidated Keihin Canada Service, Inc. (KCS) in December 2007, which was a subsidiary in charge of collecting information on air conditioners from customers and customer service functions. Keihin will transfer the KCS's functions to Keihin Michigan Manufacturing, LLC in the US, which was established in spring 2007.

Showa transfers the assembling of hydraulic power steering pumps from the US to Canada

  Showa transferred the assembling of hydraulic power steering pumps in May 2007 from the Blanchester Plant of American Showa Inc. in Ohio, US to Showa Canada (Ontario) (Showa invested 1.27 billion Yen for constructing a new building and installing the facilities). Showa will switch export from Japan to local production. In 2007, Showa will increase production from 440,000 pumps to 1.48 million pumps (it will manufacture in-house side plates, a sintered part, used inside these pumps). The Blanchester Plant will specialize in production of steering mechanism parts.

Denso to expand the plant in Ontario to newly manufacture cooling modules and so on

  Denso will expand the plant of Denso Manufacturing Canada, Inc, Ontario, by about three times from the current area to 30,000 square meters. Denso launched construction in July 2007, planning to run the plant in January 2009. The total investment will be 7.8 billion Yen. Responding to expansion of local production by Toyota/Honda and others, Denso will produce radiators, condensers, electric fans and engine cooling module in which of these three products are integrated, in addition to air conditioning units which it is manufacturing. Denso sets a sales target of 2010 at 2.4 million dollars (sales were 1.28 million dollars in 2006).

Tokai Rika to expand parts supply from Asia to the seatbelt production bases

  Tokai Rika announced in November 2007 that it would increase parts supply from Asia to Quality Safety Systems Co., a seatbelt production base in Canada. Quality Safety Systems supplies most products to Japanese auto manufacturers and GM in the US; however, skyrocketing Canadian dollar worsens export estimate (the results of the full year ending March 2007). Tokai Rika will promote cost reduction by supplying parts and sub-assemblies from Thailand, Philippines and China which are cost competitive.
Sources: PR materials of each part suppliers and news reports by newspapers

Movements in Mexico: Sanoh Industrial/Takata/NGK Insulators/Nihon Plast
/Bridgestone build new plants

  In Mexico, Japanese auto parts suppliers continue to build new production bases or transfer production from the US to utilize low labor costs.

  The new plants include the piping parts plant of Sanoh Industrial, the seatbelt parts plant of Takata, the emission gas purifying ceramics plant of NGK Insulators, the die-casting plant of Ryobi, the tire plant of Bridgestone, and so on.

  Transfer of production from the US include: Nihon Plast will transfer the production of steering wheel parts (it established a new plant), Kasai Kogyo the production of visors, Nippon Kayaku the production of MGG, Piolax the production of plastic/metal parts, Fujitsu Ten the production of car audio systems, etc.

Movements of Japanese auto parts suppliers in Mexico: building/expanding production bases

(The following show the movements of Japanese auto parts suppliers for about
one year by early March 2008, which are listed in Japanese phonetic order.)

Kasai Kogyo to transfer production of visors from North America to Mexico

  Kasai Kogyo announced in autumn 2007 to consolidate production of visors to Thailand and Mexico. Kasai Kogyo will invest about one billion yen to equip the existing plants in both countries and begin production in 2009. Maximizing the production bases in the low cost areas, it will strengthen cost competitiveness. In 2010, it will establish production capabilities of 7.4 million visors a year in total of both countries (2.4 times more than 2007 levels). Production of visors in North America will be transferred to the lining plant in Guanajuato, Mexico. Kasai Kogyo will supply the visors from Mexico to North/South Americas.

Sanoh Industrial build a new piping parts plant

  Sanoh Industrial de Mexico S.A. de C.V. (SANMEX), a subsidiary of Sanoh Industrial built a new piping parts plant and started operation in January 2008. The investment was 600 million Yen. The new plant manufactures fuel injection system rails, emission gas recirculation system (EGR) pipes and so on. The plant will respond to expansion of production in North America by Japanese auto manufacturers such as Nissan and Honda, while it will supply the products to GM/Ford through fuel injection system suppliers and export them to Brazil, etc. SANMEX aims for sales of 5.5 billion Yen in 2010 (about two times from the record of 2006).

Takata to build a new seatbelt parts plant to manufacture metal buckles in-house

  Takata will build a new seatbelt parts plant in Monterrey, northeast part of Mexico, and start operation there in summer 2008. The investment will be about 20 million dollars. Takata will manufacture metal buckles for seatbelts in-house, which have been contracted out. Since it receives fewer orders from GM etc. and the profitability worsens, it will improve the price competitiveness by manufacturing the buckles in-house. The plant will have a monthly production capacity of two million sets of buckles. The plant will supply to four assembly plants in Mexico. It will consider exporting them to the production bases in Brazil.

Toyota Boshoku integrates two subsidized interior suppliers

  Toyota Boshoku merged Toyota Boshoku Monterrey, S.A. de C.V. (TBMO) and Araco de Mexico, S.A. de C.V. to TBMO as a merging corporation in January 2008, which manufacture interior parts. Toyota Boshoku changed the company name to TB DE MEXICO, S.A. DE C.V. Through the merger, it aims to strengthen business management functions to expand the business in Mexico. TBMO manufactures seat covers for the Toyota Sienna; Araco de Mexico manufactures seats for the GM's Chevrolet HHR/Tahoe and for GMC Yukon.

Nifco requests an assembling contractor to build a new plant and contract out molding process

  Nifco requested Intermex Manufactura De Chihuahua S.A. De C.V., its contractor which assembles automotive cup holders etc. in Chihuahua, northern part of Mexico, to build a new plant, and Nifco will contract out the molding process to the contractor. Nifco put 11 molding machines in the plant and started running them in 2007. The production capacity will be increased in the future. Nifco has produced molded parts at the Ohio Plant in the US. Intermax has assembled and returned the parts back to Ohio. Nifco will contract out the molding process to Intermex to improve the profitability of the North American business.

Nippon Kayaku transfer MGG production from the US to the Mexican Plant

  Nippon Kayaku established Kayaku Safety Systems de Mexico, S.A. de C.V. in May 2007. It will transfer production of micro gas generators for seatbelt pretensioners from the US plant of LifeSparc Inc. The plant will begin production in the latter half of 2008 and supply the products to seatbelt suppliers and others in North America. At the end of 2009, Nippon Kayaku will increase the annual production capacity to 20 million-unit level. LifeSparc increased manpower to respond to the request to increase production, and as the result, it had the decline in profit. Nippon Kayaku will improve the cost competitiveness of North American business by transferring the production to Mexico. It will make LifeSparc a production base specializing in igniters (squibs).

NGK Insulators builds a new production base for ceramics to purify emission gasses from diesel vehicles

  NGK Insulators established NGK Ceramics Mexico (tentative name) in January 2008, which is a production base wholly-owned by NGK Insulators and which will manufacture ceramics for purifying emission gasses from diesel engine vehicles, in Monterrey, Nuevo Leon. The new company will be initially capitalized at 1.1 billion Yen, while planning to increase the capital to four billion yen before the construction. It will have a premise of about 240,000 square meters. To respond to growing demands attributable to the stricter emission gas control regulations for diesel engine vehicles in Japan, US and Europe, it will produce cordierite DPF and large carriers from September 2009.

Nihon Plast establishes a new steering wheel parts plant and transfer production from the US

  Nihon Plast will establish a steering wheel parts plant, and transfer production of cored bars from the Ohio Plant in the US. It will invest 800 million Yen. It will utilize Mexico where labor costs are low to improve the production efficiency in the North American area. In the operating company for the new plant, Nihon Plast Mexicana S.A. de C.V. in Mexico will take 90% stake and Neaton Auto Products Manufacturing Inc. in Ohio take 10% stake. The new plant was equipped with one casting machine, and began production in June 2007. Nihon Plast sets the sales target of 2008 at 630 million Yen.

Piolax strengthens production capabilities for plastic parts, while transferring the production from the US plant

  Piolax invested 400 million yen in PIOLAX, S.A. de C.V. to strengthen the facilities to increase production of plastic parts including fasteners and dampers for switching parts and so on. In addition to expansion of local production by Nissan/Honda and others, it will respond to increase of orders from GM and others. Piolax will transfer the production of plastic/metal parts, which are manufactured in Georgia, US. It sets a sales target at more than 7.5 billion Yen in total in the US and Mexico (sales of 2006 were 6.2 billion Yen).

Fujitsu Ten integrate production functions to a subsidiary in Mexico, while utilizing the US plant as a logistic base

  Fujitsu Ten integrated the production functions of the Rushville Plant of FUJITSU TEN CORP. OF AMERICA in Indiana to FUJITSU TEN de MEXICO S.A. de C.V. by the end of 2007. The Rushville Plant manufactures car audio systems and keyless entry systems, while having the decline in profit. By integrating production functions to the Mexican production base with strength of cost superiority, Fujitsu Ten will improve the production efficiency and lower costs. It will make the Rushville Plant a logistic base.

Bridgestone starts running the full automatic plant in Monterrey, while closing the Mexico City Plant

  Bridgestone began to run the tire plant in Monterrey, Nuevo Leon, in November 2007. It invested about 200 million dollars (about 23 billion Yen) for the construction. The plant has a daily production capacity of 8,000 tires. Bridgestone adopted the full automatic production method (BIRD - Bridgestone Innovative & Rational Development) for the first time for the plant of the offshore production bases, under which all production processes from the component process to the product inspection process are fully automated. The plant will supply high performance/super high performance tires, larger rim diameter tires for passenger cars/light duty trucks mostly to the North American markets.
  Bridgestone announced in December 2007 that it would close the Mexico City Plant in the latter half of 2008. It will be closed because: the plant located in the urban area has difficulties to expand; price competition with emerging countries is tough because bias tires for trucks and busses manufactured are low-end products. Bridgestone intends to concentrate management resources on value-added tires from now on.

Ryobi builds a new die-casting plant with an annual capacity of 12,000 tons

  Ryobi established RDCM S.R.L. de C.V. in Guanajuato in April 2007, which manufactures die-casting products. Ryobi Die Casting (USA), Inc., a manufacturing subsidiary in the US, takes a stake of 99.9%, and Ryobi Holdings (USA), Inc., a subsidiary controlling the North American business, takes a stake of 0.1%. Responding to increase of production by GM/Ford/Japanese auto manufacturers, the plant will produce 12,000 tons a year. The total investment will be 44 million dollars (about 5.1 billion Yen). The plant is planned to start running in October 2008. When it reaches the maximum production in 2009, the production capabilities of die-casting products in North America will increase by about 20%.
Sources: PR materials of part suppliers and news reports by newspapers
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