Japanese suppliers in Europe: Buyouts, alliances and joint ventures expand sales

New facilities and production capacity enhancements in Eastern Europe and Russia

2014/07/25

Summary

 In the January to June period of 2014, new passenger car registrations in 17 Western European countries increased by 5.4% year-over-year (y/y) to 6.38 million units, according to LMC Automotive. Under such circumstances, many Japanese auto parts suppliers in Europe are trying to increase their supplies to European automakers and auto parts suppliers.

Germany: Aiming to increase sales to German OEMs

 In Germany, multiple suppliers are acting to expand their sales channels to German and other OEMs. These actions include joint venture (JV) setup with local parts manufacturers (by Fuji Kiko and Nagano Keiki), acquisition (by Toyoda Gosei and Nifco), alliance (by Seiren), and establishment of own sales bases and liaison offices (by Mitsubishi Rayon, F-Tech, Showa, Toyo Tire & Rubber, and others). In the field of preventive safety technology development, Denso has acquired shares of a local parts supplier.

Eastern Europe: Continuing to expand plants and facilities

 In Eastern Europe, many suppliers, including Kayaba Industry (KYB), Taiho Kogyo, and Daido Metal, are expanding their plants and facilities to meet increasing orders from European OEMs. Other activities include newly started production of parts designed to comply with Euro 6, to improve fuel efficiency, or for weight reduction. Some examples are new common rail systems by Denso, exhaust gas purifier ceramics by NGK Insulators, turbo charger bearings by Daido Metal, and seats by Toyota Boshoku, as well as in-house production of plastic parts by Tokai Rubber Industries. Meanwhile, Akebono Brake Industry, Advics, Takata, and other suppliers are building their plants to newly start operations in this region.

Western Europe and others: Some expanding production capacity while others consolidating operations

 In countries such as the U.K., France, the Netherlands, and Sweden, several suppliers are expanding their operations. For example, NHK Spring has established a holding company to newly start operations in this region, while Nippon Sheet Glass has started producing high-performance products. In addition, Akebono Brake Industry, G-Tekt, Press Kogyo, and Mitsubishi Heavy Industries are expanding their production capacities to meet increasing orders. On the other hand, some companies are consolidating their plants, including Keihin, JTEKT, and U-Shin.

Russia and Turkey: Sales of new cars continue to drop in Russia despite successive entries by suppliers

 Vehicle sales in Russia decreased by 7.6% y/y to 1.23 million units in the January to June 2014 period. The sales have declined for the sixth consecutive month since January 2014. Following May 2014, a double-digit drop was marked again in June 2014. The production volume between January and May 2014 also remained low at 840,000 units (down 3.8% y/y).

 Even under these circumstances, active movements are being made by some suppliers in 2014 through 2015. For example, Unipres, GMB, Atsumitec (with Toyota Tsusho), Sumitomo Electric Industries (with Sumitomo Wiring Systems), and Bridgestone are constructing or starting operations at new plants, while Daido Metal and The Yokohama Rubber are expanding their production capacities. On another front, Kasai Kogyo, Sumitomo Rubber Industries, Koito Manufacturing and other companies are considering making investments in Russia.

 In Turkey, Furukawa Electric is enhancing its sales functions by establishing a new liaison office, while TPR and Bridgestone are expanding their production capacities to meet expected increases in orders and demands.


Related Japanese Supplier Reports:

* Indonesia (Jun. 2014), Vietnam, Malaysia, Laos, and Myanmar (Jun. 2014), the US (Apr. 2014)
* China (part 2): Northern, Northeastern & Southern regions (Mar. 2014), China (part 1): Eastern and Central China (Mar. 2014)
* Latin America (Part 2): Trends in Brazil and Mexico (Mar. 2014), Latin America (part 1): New plants in Mexico (Mar. 2014),
* Thailand (Part 1) (Jan. 2014), Thailand (Part 2) (Jan. 2014), ASEAN (Nov. 2013)
* Russia and Eastern Europe (Oct. 2013), India (Sep. 2013)