Japanese suppliers in Europe: Targeting more business with European OEMs

Improving production in Eastern Europe; reducing losses in Russia

2015/08/05

Summary

LMC Automotive's sales forecasts

・Sales volume of light vehicles in 17 Western European countries increased by 8.4% y/y to 7.73 million units in the January to June period of 2015, showing a continued upward trend.

Germany: Aiming to increase sales to German and other OEMs

・Parts suppliers are aiming to win more orders from German and other European OEMs. These actions include acquisitions of promising local parts suppliers (by Sumitomo Riko and Nidec), and strengthening production capabilities as demonstrated by Toyobo's building a new plant.

・Some suppliers establish own development and sales bases (Imasen Electric, G-TEKT and others).

Eastern Europe: Starting operations at new plants, and expanding plants and facilities

・Many suppliers, including Akebono Brake, Advics, Tsubakimoto Chain, TS Tech, NHK Spring, and Mitsubishi Plastics, started or will start operations at new plants.

・Suppliers such as EXEDY, Keihin, and Hi-Lex, expanded or will expand their plants and facilities to meet increasing orders from European and U.S. OEMs.

・Others are boosting production capacities for parts compliant with diesel emission regulations (Denso and NGK Insulators).

Western Europe: Strengthening development and sales functions, boosting production capacity

・Akebono Brake established a new research and development center for finished products. Unipres will boost its production capacity to meet new orders. Kasai Kogyo decided to form an alliance with a local supplier.

・JVC Kenwood purchased an Italian supplier and Panasonic acquired some shares in a major Spanish supplier to expand business to European OEMs and develop new products.

・NTN will install new production lines for high-value added products at its plants in France and Germany and will transfer the facilities for mass-produced products to its Romanian subsidiary.

Russia and Turkey: As Russian market shrinks, some postponing operations at new plants

・The Russian production volume between January and May 2015 remained low at 610,000 units, down 26.7%  y/y. Under the circumstances, Hi-Lex and Unipres postponed the start of operations at new plants. T.RAD intends to boost marketing activities to offset the deteriorated profitability stemming from slow production.
・In Turkey, Sumitomo Rubber has started producing tires for passenger cars and trucks at its new plant.

 
Japanese Supplier Reports:

* Mexico (Jun. 2015), Mexico and Brazil (Jul. 2015)
* Southeast Asia (May 2015), the U.S. (Mar. 2015)
* China (Part 1): Southern, Central and Southwestern regions (Jan. 2015)
* China (Part 2): East/North/Northeast regions and overview (Feb. 2015)
* India (Nov. 2014)
* Thailand (Sep. 2014)