Japanese suppliers in India building new plants or expanding existing facilities
in the north and south of the country
Some have put their plans on the shelf in response to Honda's delay in operating its new plant
Aug. 6, 2009 No.799
The following is the latest trend on Japanese automotive parts suppliers in India (covering the past year up to mid-July 2009). Some of them have either built new plants or expanded existing facilities to respond to increasing production, current or anticipated, by Suzuki, Honda, Toyota and Nissan, while others have put their plans on the shelf as a result of Honda's decision to postpone the start of operations at its new plant.
Japanese automakers' production capacity in India will expand to around two million vehicles a year in 2012
In India, Suzuki, Honda and Toyota are significantly increasing their production while Nissan intends to establish three joint ventures, bringing their combined vehicle production capacity in the country from the current 840,000 a year to 2.02 million a year in 2012.
At the same time, Honda has pushed back the start of its second plant, scheduled for 2010, to some time after 2012: Toyota has scaled down its second plant's initial production: Nissan has postponed the planned start of the new plant.
Japanese automakers' key plants in India
|
|
Assembly plant |
Annual production capacity |
Latest developments |
|
|
Suzuki |
Maruti Suzuki India Ltd. |
Gurgaon |
540→700 |
Currently producing the Maruti 800, the Wagon R, the Alto, the Versa/Every Landy, the Omni/Every, the Gypsi/Jimny, and the Zen Estilo/MR Wagon. The gasoline engine plant capable of producing 240,000 a year started operations in October 2008. |
|
Manesar |
140→300 |
Expanding the annual production capacity to 300,000 vehicles and 300,000 diesel engines (from the current 100,000 engines) by fiscal 2009 or 2010. | ||
|
Honda |
Honda Siel Cars India Ltd. |
Greater Noida |
100 |
Currently producing the City, the Civic and the Accord. |
|
Tapukara |
0→60 |
The start of the operation scheduled for 2010 was postponed by one year (announced in October 2008). Further postponement to some time after 2012 under consideration (announced in April 2009). The press parts and engine parts plant, located at the same site, began to operate in September 2009. | ||
|
Toyota |
Toyota Kirloskar Motor Pvt. Ltd. |
Bangalore |
60 |
Currently producing the Innova, the Corolla and the Camry. The planned output for 2009, which was once reduced to roughly 50,000 from 65,000, is expected to revert to the former level on the back of a modest recovery in demand. |
|
Bangalore |
0→100 |
Starting to operate by the end of 2010 to produce a newly-developed small car. The initial output will be set at roughly 70,000 a year due to a 30% drop in demand. Postponed the decision to build an engine plant (announced in June 2009). | ||
|
Nissan |
(Renault-Nissan Bajaj) |
Chakan |
0→400 |
Producing the ULC, the codename for an extremely low-priced car, in 2011. |
|
Renault Nissan Automotive India Private Limited |
Oragadam |
0→200 |
Nissan will produce the next-generation Micra/March in May 2010, with a single production line and single shift in the initial phase. Expecting to reach full production in 2012 (announced in June 2009). The plan to boost the production capacity to 400,000 a year by 2015 remains unchanged. | |
|
Ashok Leyland Nissan Vehicles Pvt. Ltd. |
Pillaipakkam |
0→100 |
Producing a small commercial vehicle. The start of the operation scheduled for around 2010 was postponed by half a year (announced in December 2008). |
|
| Note: |
Nissan's annual production capacity includes Renault brand vehicles. (Renault-Nissan Bajaj) is a tentative name. |
India's vehicle production, domestic sales and exports |
(units)
|
|
|
2004-05 |
2005-06 |
2006-07 |
2007-08 |
2008-09 |
Jan.-Jun. 2008 |
Jan.-Jun. 2009 |
|
Production |
1,563,579 |
1,700,383 |
2,065,205 |
2,326,589 |
2,255,823 |
1,246,044 |
1,188,532 |
|
Domestic sales |
1,380,002 |
1,494,117 |
1,847,744 |
2,040,376 |
1,936,002 |
1,098,757 |
1,057,223 |
|
Exports |
196,342 |
216,172 |
247,989 |
277,395 |
378,412 |
n.a. |
n.a. |
Japanese automakers' vehicle production (calendar year) |
(units)
|
|
|
2004 |
2005 |
2006 |
2007 |
2008 |
Jan.-Jun. 2008 |
Jan.-Jun. 2009 |
|
Suzuki |
537,734 |
555,327 |
628,355 |
751,405 |
756,333 |
391,236 |
457,132 |
|
Honda |
34,535 |
38,570 |
55,379 |
58,114 |
53,298 |
33,045 |
27,218 |
|
Toyota |
47,628 |
45,695 |
44,310 |
52,275 |
52,990 |
29,188 |
19,803 |
|
Total |
619,897 |
639,592 |
728,044 |
861,794 |
862,621 |
453,469 |
504,153 |
Source: SIAM (Society of Indian Automobile Manufacturers)
Note: 2004-2005 is from April 2004 to March 2005. 2008-2009 is from April 2008 to March 2009.
Japanese parts suppliers focusing on northern and southern India, the hub of Japanese automakers' plants, for their new plants
For their new manufacturing activities in India, Japanese parts suppliers are focusing on the north of India (states of Rajasthan and Uttar Pradesh) where Suzuki and Honda are located and the south (cities of Bangalore and Chennai) where Toyota has a plant and Nissan intends to build plants.
In the north, Sumitomo Metal will build a plant for crankshafts, Sumitomo Corporation steel plates, press parts and dies, MIKUNI fuel supply systems, and Mitsui Chemicals automotive polypropylene. In the south, Toyoda Iron Works and Unipres each will build a plant for press parts and Bridgestone vibration absorbing rubber.
Japanese parts suppliers: Building production bases in India
(Activities of the suppliers for about one year until the middle of July 2009)
Kinugawa Rubber: Building a production base in India in 2010
|
Kinugawa Rubber will build a plant in India in 2010 (announced in February 2009). It is currently conducting a feasibility study but says that the Indian plant is high on the agenda because it believes that it is essential to expand in emerging markets such as India for its mid- to-long term growth and that the plant can also be leveraged as export base for Europe. |
Sumitomo Metal: Producing crankshafts in a joint venture with the capacity of 800,000 pieces a year
| In July 2009, Sumitomo Metal established SMI Amtek Crankshaft, a joint venture with Amtek Auto Limited, an Indian parts supplier. It has a 40% stake in the joint venture, with the rest shared between Sumitomo Corporation with a 10% stake and the Indian supplier with a 50% stake. The CEO will come from Sumitomo Metal. The joint venture, after having bought a plant Amtek built near Delhi for roughly one billion Yen, began the production of crankshafts in July 2009. The joint venture, Sumitomo Metal's first Indian plant, can produce up to 800,000 crankshafts a year and expects to reach full production in four years. |
Sumitomo Corporation: Shearing steel plates and producing press parts and dies in January 2010
| In February 2009, Sumitomo Corporation established India Steel Summit in Uttar Pradesh state, northern India, which will shear and slit steel plates and produce press parts and dies. The Indian company, which is Sumitomo's first Indian steel service center, will start operating in January 2010 and supply its products to automakers and home appliance makers in India. The target sales for 2014 are set at roughly 10 billion Yen. |
TACHI-S: Producing seats for the Nissan A-platform in a joint venture with Lear's subsidiary in 2010
| In August 2009, TACHI-S will establish TACLE Automotive India Private Limited, a joint venture (49% owned by the Japanese supplier) with Lear Corporation (Mauritius) Limited, Lear Corporation's subsidiary, in the state of Tamil Nadu, India. The joint venture, with an investment of 3.6 million dollars, will build a new plant to produce seats for the Nissan A-platform in May 2010. It expects to produce 200,000-230,000 sets in fiscal 2011, worth 55 million dollars in sales. |
| Note: |
TACHI-S once froze its plan to build a new plant in India in December 2008 as part of its efforts to restructure its global network of plants. It now says that it will go ahead with the Indian joint venture as planned because its partner's business is sound, although its parent company Lear Corporation filed for Chapter 11 bankruptcy protection in the United States on July 8 2009. |
Toyoda Iron Works: Building its second plant to produce press parts for the Toyota EFC at the end of 2010
| Toyoda Iron Works established Toyotetsu India Auto Parts (TTID) in Rajasthan state, India in December 2008. It has a 99% stake in the Indian company, with the remaining 1% owned by a local company. With an investment of 6 billion-7.5 billion Yen, it also plans to build its second Indian plant outside Bangalore, which will start operating in December 2010 to produce 70,000 sets a year of press parts such as bumpers and door trims for the EFC (Entry Family Car), a small low-priced car to be produced at Toyota's second vehicle plant. |
Bridgestone: Formed a joint venture to produce shock absorbing rubber with its Indian partner
| In spring 2009, Bridgestone established Bridgestone TVS India, a joint venture with Sundaram Industries, a leading Indian maker of shock absorbing rubber, to produce shock absorbing rubber in Chennai. The joint venture is capitalized at roughly 823 million Yen, with Bridgestone and Sundaram owning a 51% stake and a 49% stake respectively. The two partners in the joint venture concluded a technical assistance agreement in 1996 and have worked together ever since. |
MIKUNI: Producing fuel supply systems at its new company in 2010 and dissolved its joint venture with a local company
| MIKUNI has established Mikuni India Private Limited, a wholly owned subsidiary, and is now building the Indian company's 4,000㎡ plant in Rajasthan state, India to produce throttle bodies and other components of fuel supply systems for vehicles and motor cycles (announced in July 2008). The operation will start around April 2010. 1.9 billion Yen will be invested in the first five years. The sales target for fiscal 2013 is set at 6.3 billion Yen. |
| Note: |
MIKUNI established in 1985 Ucal Fuel Systems Ltd., a joint venture with Carburettors Ltd., a local supplier, to produce fuel supply systems for vehicles and motor cycles. The Japanese supplier, however, deciding that the joint venture cannot move fast enough to cope with rapidly growing Indian market, dissolved it by selling its entire stake to its local partner (announced in April 2008). |
Mitsui Chemicals: Producing automotive polypropylene in a joint venture capable of producing 15,000t a year
| Mitsui Chemicals started to operate Mitsui Prime Advanced Composites India, a joint venture, in Rajasthan state, India, in June 2009, to produce automotive polypropylene. The joint venture, 80% owned by Mitsui Chemicals and the rest by Prime Polymer, is the Japanese supplier's first Indian company and can produce up to 15,000 tons of the material a year. |
| Note: |
Prime Polymer is owned by Mitsui Chemicals and Idemitsu Kosan with a 65% stake and 35% stake, respectively. |
Unipres: Producing 200,000 sets a year of body press parts for Renault/Nissan
| Unipres and Marubeni Corporation will establish Unipres India in Chennai, southern India, in September 2009 (announced in June 2009). The joint venture, 80% owned by Unipres and the rest by Marubeni, will begin to produce in May 2010 200,000 sets a year of body press parts for a small vehicle to be produced at a Renault/Nissan joint venture in Chennai. The investment including the land is roughly 5 billion Yen. |
| Note: |
According to the first press release of October 2008, Magnetto Automotive, an Italian parts supplier, was also a participant in the Indian joint venture, which was to be established in March 2009 (Unipress, Magnetto and Marubeni chipping in a 55% stake, 25% stake and 20% stake, respectively) but announced in June 2009 that it will withdraw from the joint venture due to declining demand for automobiles in the world. |
Source: Parts suppliers' press releases and various media reports
Honda's decision to postpone operating its new plant in India puts on the shelf the plans of H-one, TS TECH and Yachiyo Industry to build their new plants in the country
Honda, which was building its second plant near Delhi scheduled for operation in 2010, postponed it by one year (announced in October 2008). It is considering a further delay beyond 2012.
As a result, the following parts suppliers have postponed either building or operating their new plants in India: H-one for frame parts, TS TECH for seats, Yachiyo Industry for fuel tanks and YAMASHITA RUBBER for shock absorbing rubber.
Japanese parts suppliers: Freezing their plans to either build or operate their new Indian plants
(Activities of the suppliers for about one year until the middle of July 2009)
H-one: Honda's move causes the supplier to freeze its plan to build its second plant for frame parts in India
| H-one was planning to build H-one India's second plant for frame parts in Rajasthan state, India, in 2009 but decided to freeze the plan because Honda had postponed operating its second vehicle plant in India. The Japanese supplier has just expanded H-one India's first plant's annual production capacity from 70,000 sets to 150,000 sets and thinks that no further expansion is warranted until 2010 (announced in November 2008). |
| Note: |
With an investment of roughly 700 million Yen for the second plant's first phase, H-one was to build a building with 7,000‡u floor space and install welding and assembly lines capable of producing 50,000 sets of press parts. |
TS TECH: Honda's decision to postpone operating its new plant causes the supplier to rethink its plan to build its second plant for seats
| TS TECH reacted to Honda's move to postpone operating its second vehicle plant in India by suspending building its second Indian plant for seats, scheduled for operation in August 2009. It says that it will decide when to restart the building and how big a plant it wants when the first half of fiscal 2009 ends (announced in March 2009). |
| Note: |
TS TECH established TS Tech Sun Rajasthan, a joint venture with TS Tech Sun (India), a local parts supplier, in Rajasthan state in July 2008 (60% owned by the Japanese company and the rest by the Indian company). The second plant to be run by the joint venture was to produce seats in a 11,500‡u plant near Honda's second vehicle plant in August 2009. 770 million Yen was invested in the first year of the building of the second plant. |
Yachiyo Industry: Honda's declining sales cause the supplier to postpone operating its new plant for fuel tanks by one year
| Yachiyo Industry postponed by roughly one year operating its new Indian plant for plastic fuel tanks, which was scheduled for operation in January 2010. The decision was made in light of the declining sales in India of Honda, its main customer. In the meantime, the supplies will be made from the Japanese supplier's Thai plant. |
| Note: |
Yachiyo Industry established Yachiyo India Manufacturing, its first Indian plant, near Honda's second vehicle plant in spring 2008. The new plant, with an investment of hundreds of millions of Yen, was to produce fuel tanks for the Civic. |
YAMASHITA RUBBER: Postponing its plan to build a plant for shock absorbing rubber, originally scheduled for operation at the end of 2010
| YAMASHITA RUBBER pushed back its plan to build a new Indian plant, which was to start operating by the end of 2010. It had intended to build its first Indian plant for shock absorbing rubber in time for the start of Honda's second vehicle plant in India but will now put the plan on the shelf for the time being due to its main customer's declining production in India (announced in December 2008). |
Source: Parts suppliers' press releases and various media reports
HI-LEX and U-SHIN expanding their capacity, ASTI and Toyota Boshoku expanding their product portfolio
Some of the Japanese parts suppliers currently operating in India have expanded their production capacity: HI-LEX doubled its capacity for cables and window regulators: U-SHIN expanded its capacity for key sets by 2.5 times: H-one will increase the number of dies it makes internally by 1.5 times.
Other parts suppliers have expanded their product portfolio: ASTI will newly produce electrical parts for vehicles: Toyota Boshoku will produce door trims in integrated production.
Japanese parts suppliers: Expanding their capacity or product portfolio in India
(Activities of the suppliers for about one year until the middle of July 2009)
ASTI: Adding electrical parts for vehicles
| ASTI will produce electronic boards and body control modules for controlling in-vehicle devices at ASTI Electronics India in Haryana state, which also produces wire harnesses mainly for Suzuki motor cycles, and supply them to Maruti Suzuki and other local automakers for their vehicles (announced in April 2009). The Japanese supplier will also produce engine control components for CNG vehicles at its local company. |
H-one: Expanding the number of dies it makes in India by 1.5 times
|
H-one, which currently supplies dies mainly from Japan, will begin to supply them from low-cost countries as well such as China, Thailand and India (announced in October 2008). In India, the Japanese supplier will increase the capacity of H-one India, which produces dies and components in Uttar Pradesh state, to boost the number of dies it makes internally to 150 in fiscal 2010 from 100 in fiscal 2008, enabling the local company to replace imports from Japan and at the same time to realize a shorter development time, cost reduction and greater efficiency. |
Toyota Boshoku: Introducing a large injection molder for integrated production of door trims
| Toyota Boshoku, having won an order for door trims for a Toyota's new small car to be produced in India at the end of 2010, will strengthen Toyota Boshoku Automotive India. The Japanese supplier will invest roughly one billion Yen to install a large injection molder at the local company, which will allow it to replace plastic molding parts now coming from Thailand and also start the integrated production of door trims in December 2009. |
HI-LEX: Operating its second plant now after a postponement
| HI-LEX built HI-LEX India's second plant in Haryana state to double the local company's capacity for cables and regulators but postponed the operation, which was scheduled to start by the end of 2008, due to the declining market in India as well as in the rest of the world. However, the Japanese supplier, seeing that the demand in India was picking up, began the production at the plant in June 2009. The parts will be supplied to Japanese automakers operating in India such as Suzuki and Honda as well as Tata and other local automakers, as soon as the production comes on stream. |
U-SHIN: Expanding the production of key sets for the Suzuki's A-star at its Indian plant by 2.5 times
| U-SHIN won an order for key sets for the Suzuki's A-star, a new one-liter car now in production in India, and will increase Jay Ushin's (in Haryana state) production of the parts in 2009 (announced in December 2008). The production will take place at the local company's at Manesar plant near New Delhi and increase from 4,000 sets a month to 10,000 sets a month, including heater control panels. |
Source: Parts suppliers' press releases and various media reports
ICHIKOH, KASAI and SHIROKI are contracting out production in India
Some Japanese parts suppliers have secured Indian production bases through contracting out production to local partners: ICHIKOH for small lamps, KASAI for door trims for Nissan vehicles, and SHIROKI for window regulators for a Toyota's newly developed small car.
Japanese parts suppliers: Initiating contract production with Indian partners
(Activities of the suppliers for about one year until the middle of July 2009)
ICHIKOH: Contracting out production of a quarter of its global output of small lamps to an Indian supplier
| ICHIKOH acquired a 5% stake in FIEM Industries Limited, an Indian maker of automotive lamps and mirrors, in May 2009. The Japanese supplier has provided technical assistance on mirror glass to the local supplier since November 2005 and is looking to strengthen the tie-up including an increased stake in the Indian company. |
| ICHIKOH mainly produced in-vehicle small lamps such as room lamps, foot lamps and map lamps at its subsidiary plants in Japan but will now spread the production to Thailand and India to build a global supply network (announced in July 2009). In India, the production will be carried out by FIEM on a contract basis, with a 25% share of the global output. The rest will go to Thailand and Japan with a 50% share and 25% share, respectively. By building a global supply network, the Japanese supplier expects to double the global sales of small lamps from 8 billion Yen in fiscal 2008 to 16 billion Yen in fiscal 2013. |
| In India, KASAI will contract out production of door trims to Hanil Automotive India, the Indian production base of Hanil E-Hwa, a Korean supplier of interior parts, in 2010. The production is expected to be 145,000 sets a year. Although the Japanese supplier originally planned to build its own plant in India on the back of Renault/Nissan's new plant, it gave up the idea because it was able to win an order for door trims only for the alliance's 1000cc-class small car, making it difficult to justify the investment. |
SHIROKI: Indian partner won an order for the entire volume of window regulators for a Toyota's newly developed small car
| In September 2008, SHIROKI increased its stake in Technico Industries, an Indian parts supplier, from 1.35% to 21% by subscribing for a third-party allocation of new shares, which was worth roughly 400 million Yen. The Indian supplier has been producing window regulators and door hinges with technical assistance from SHIROKI. The Japanese supplier, which has no Indian production base of its own, intends to lead the Indian company to win more orders from Toyota and Suzuki. |
| Technico announced in September 2008 that it won an order for the entire volume of window regulators and door hinges for a Toyota's newly developed small car to be produced in India in 2010. Because of this, the Indian supplier intends to build a new plant outside Bangalore where the car is to be produced, with the Japanese supplier providing technical assistance on window regulator. |
Eagle Industry: Indian subsidiary merging with the Indian subsidiary of the German partner in the joint venture
| In March 2009, Eagle Industry, a leading supplier of mechanical seals for vehicles and industrial equipment, merged its Indian subsidiary Eagle Seals and Systems India with Burgmann India, an Indian subsidiary of Burgmann Industries, a German supplier of mechanical seals, as part of its efforts to strengthen the tie-up with the German seal supplier globally as the two companies have started to roll out joint ventures in many parts of the world. The surviving company in the merger is the Japanese supplier's Indian subsidiary, now renamed Eagle Burgmann Industries. |
