Japanese suppliers continue to expand in South East Asia

Vehicle parts production strengthened in Indonesia; Vietnam and Malaysia for product export

2013/03/11

Summary

 This report summarizes the recent activities of Japanese suppliers in ASEAN countries with the exception of Thailand. The report covers those within ten months by the middle of February 2013.

 The automobile sales volume in Indonesia continued to expand with 742K units for 2010 (52.7% y/y increase), 869K units for 2011 (17.1% y/y increase), and 1.08 million units (24.3% y/y increase) for 2012. With further market growth expected in the future, major auto manufacturers such as Toyota, Nissan, Honda, and Daihatsu are strengthening their production capabilities.

Production enhancement plan by major Japanese OEMs in Indonesia

Toyota 2014 annual production capacity: 250K units (180K units until August 2013)
 The annual production capacity of the first plant to be increased from 110K to 130K by September 2013. The second plant with an annual production capacity of 70K units completed at the beginning of 2013 (the start of production at this plan is still unknown). Its annual production capacity will be extended to 120K units by early 2014.
Nissan 2014 annual production capacity: 250K units (50K units until August 2011)
 The annual production capacity of the existing plants will be increased from 50K units to 100K units in September 2011. It will be further increased to 180K units in 2013. Moreover, the annual production capacity is targeted to reach 250K units by 2014.
Honda 2014 annual production capacity: 180K units (60K units until 2013)
 The annual production capacity of the existing plant is 60K units. The new plant currently in construction (with annual production capacity of 120K units) will complete by 2014.
Daihatsu The annual production capacity since October 2012: 450K units
 The annual production capacity of the existing plant is 330K units. The operation at the new plant (with an annual production capacity of 120K units) began in October 2012.

(Source) Based on plants announced by respective companies.


 In response to these plans, the Japanese suppliers are planning to construct new plants in new regions, strengthen production capacities at their existing companies, and produce new parts. Construction of new plants is still a trend with these companies in Tier 1 and Tier 2. Companies in Tire 1 include: Aoyama Seisakusho (vertical production of bolts and nuts), H-One/G-Tekt (auto body frame components), Nippon Steel & Sumitomo Metal (steel sheets), Fujitsu Ten (established two production and sales companies), and Topy Industries (wheels). Companies which established new sites to cope with local demands in Indonesia as well as to serve as a point of export are: Sekisui Chemical (injection molds), Press Kogyo (frames), Seiren (interior materials), Tiger Sash (door parts), Nishikawa Rubber (rubber and plastic parts). Other companies like NHK Spring, Fuji Oozx, and Yamashita Rubber are also studying the details for starting a business in Indonesia.

 Companies enhancing the production capability at their existing plants and launching new products are: Aishin Takaoka (added casting lines), Akebono Brake (transferred production of drum brakes to in-company production), F.C.C. (added CVT production capability), Sumitomo Electric Industries (added oil quenched and tempered wire production capability), T.Rad (added automobile radiator production capability), Yutaka Giken (exhaust parts, catalytic converter) and Unipres (body press parts). Companies that are establishing new companies/plants and making additional investments include: Denso (third plant for electronic control units), TS-Tech (a new seat plant), Chuo Precision Industrial (a new aluminum wheel company), Tokai Rika (a new switch parts plant/new seatbelt company), Tokai Rubber (an own plant and a new vibration insulating rubber company) and Toyota Auto Body (a new plastic plating company).

 Some of the suppliers (F.C.C., Eagle Industry, and Press Kogyo) made changes to their plans to increase production and delayed schedules for going into full production due to lagged demand for vehicles in 2012 caused by Indonesian government's measure to limit loan for automobiles.

 Yokohama Rubber (consolidated two production and sales companies converting it to a supply hub for mini spare tires), Nidec Tosoku (a second site for electric fuel pumps), Muro Corporation (vertical production of pressed parts at existing plants), and Yokowo (begins production at an on-board communication unit plant and pushed up the start of the second phase of the construction) enhanced global export sites in Vietnam. Additionally, Mitsui Mining and Smelting established a catalytic production and sales company to conform to more strict gas emission regulations set by the Vietnamese government.

 In other countries (Malaysia, Singapore, and the Philippines) Showa Denko established a new casting company for casting aluminum parts in Malaysia, and enhanced its production capacity at the Singapore parts forging company. Other companies which established new companies in Malaysia are: Tachi-S (seat assembly), Toyo Rubber (including low-fuel consumption tires), and Nippon Kayaku (safety parts). Yokohama Tire (shift to low-fuel consumption tire) and Gunma Gohkin (aluminum die casting) enhanced their production capacity in the Philippines to strengthen their function as the global export hub.

 Activities of Japanese suppliers in Thailand will be provided in a different report.

Related Reports: Japanese suppliers

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Mexico and Brazil (Oct. 2012), Central & Southwestern China (Aug. 2012), Southern China (Aug. 2012),

Eastern China (Jul. 2012), Northern and Northeastern China (Jul. 2012), the US (Aug. 2012),

Thailand (1) (Jul. 2012)/Thailand (2)(Jul. 2012)