Japanese suppliers in India aim to gain clients; satisfy rising OEM production

Activities of Aisan Industry, H-One, Calsonic Kansei, SEIREN, TS Tech, T.RAD, Denso and others

2014/11/27

Summary
Establishing new plants & sales companies: Calsonic Kansei, Shiroki, Seiren and others
Expanding production capacity & launching new products: H-One, Alpha,T.RAD and others
Enhancing organization & development: FCC, Kasai Kogyo, Denso and others

Summary

(Please click the map for OEM plant locations.)

Indian market overview: starts recovering in June

In India, automobile production volume in 2013 was 3.88 million units, down by 6.3% year over year (y/y), and new vehicle sales in 2013 were 3.24 million units, down by 9.6% y/y, showing a negative growth influenced by factors such as the slow economy, high interest rates and high fuel prices. This downward trend had continued until around April 2014 for about two years, however, the new vehicle sales and production turned positive in June backed by expectations for an economic recovery after the change in regime in May. The cumulative new vehicle sales during the period from January to September 2014 declined by 3.4% y/y to 2.38 million units and production volume decreased by 2.4% y/y to 2.9 million units.

Advancement of Japanese suppliers

Under these market conditions, Japanese automotive parts suppliers continue to enter into the Indian market, expanding production capacity and enhancing business plans, following Japanese automakers' mid-term plans for increasing automobile production volume. It was also observed that many of the newly established companies, which were established by these suppliers in India, were joint venture (JV)s with local parts suppliers.

Their investment areas extend to northern states of India (Haryana, Rajasthan, Uttar Pradesh and Delhi capital region), the central state (Jharkhand), the western states (such as Maharashtra and Gujarat), and the southern states (Tamil Nadu, Karnataka and Andhra Pradesh).

Establishing new business locations

To build new plants (JV=Joint venture)	To ensure a stable supply to meet growing needs of Japanese automakers for their increased production	Calsonic Kansei, Shiroki (JV), Seiren, TS Tech and Toyo Seat (JV)
	To supply products to new customers other than Japanese automakers	Nabtesco (JV for Volvo), Alps Electric, Fujitsu Ten (JV)(These companies also supply to local makers.)
	To supply products to Japanese parts makers	Ogura Clutch, Kikuwa and Kyoshin
To set up new sales companies	To expand business to new customers other than existing primary customers	Toyota Boshoku
To set up new sales companies	To expand markets	Renesas Electronics

Expanding production capacity (many suppliers are expanding their businesses to local manufacturers and other new customers other than Japanese manufactures)

To build a second plant	Aisan Industry, H-One, Toyo Tire & Rubber, etc.
To build a third plant, etc.	Owari Precise Products and Yazaki (company's 9th plant)
To construct additional buildings, facilities and equipment	Alpha, Ahresty, H-One, Kanemitsu and Musashi Seimitsu
To launch new products	To establish joint ventures with ethnic manufacturers	Nippon Steel & Sumitomo Metal (high-strength steel, T.RAD　(automotive air conditioners), Toyota Tsusho (compound resin) and Riken (camshafts)
To launch new products	To construct additional facilities and equipment at existing plants	PIOLAX (opening and closing mechanism parts for Hyundai)

Strengthening organizations and suspending or postponing entry into new markets

To acquire 100% ownership of joint ventures or technical partners	F.C.C., Kasai Kogyo and Hitachi Metals
To increase the number of development engineers at technical centers	Denso
To suspend or postpone entry into the new market and building new plants	Clarion, GMB and Ichikoh Industries, etc.

The following are recent moves of Japanese parts suppliers in India (the survey period covers 14 months until October 2014).

Japanese suppliers Related Reports:

* Mexico: New plants built to satisfy OEM demand (Oct. 2014),
Mexico and Brazil: Expanding capacity for local demand (Oct. 2014)
* Thailand (Sep. 2014)
* Indonesia (Jun. 2014), Vietnam, Malaysia, Laos, and Myanmar (Jun. 2014)
* Europe (Jul. 2014), the U.S. (Apr. 2014)
* China (Part 1): Eastern and Central China (Mar. 2014)
China (Part 2): Northern, Northeastern & Southern regions (Mar. 2014)
* India (Sep. 2013)

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