Japanese suppliers in Thailand: Strengthening production capacity and R&D function

Activities of Aisin AW, Akebono Brake, Sumitomo Rubber Industries, Toyota Boshoku, NSK and others

2015/09/17

Summary

Thailand Map・This report summarizes activities of Japanese parts suppliers in Thailand in one year to late August 2015.
・In the January to July 2015 period, automobile production in Thailand remained stagnant at 1.1 million units, marking a year-over-year (y/y) drop of 0.2%. This is mainly because the domestic sales volume dropped by 15.8% to 430,000 units in this period under a slow economic recovery due to sluggish consumption and export as well as stricter loan screening by banks. The export, on the other hand, showed a relatively solid growth of 4.1% y/y to 678,000 units. Despite of such weak sales in Thailand, Japanese OEMs with their global export hubs in this country have not made any significant changes so far to their plans for production capacity expansion.

  ・Toyota revised its 2015 sales target for Thailand downward from the initial target of 330,000 units to 280,000 units in July. As for exports, the automaker is trying to increase the volume by fully redesigning its Innovative International Multi-purpose Vehicle (IMV) pickup trucks for emerging markets.

  ・ Nissan started operations at its new Thai plant in July 2014 and intended to offset declining sales in Thailand with exports. However, the OEM has failed to increase exports, resulting in a lower production than its original plan. However, in the future, Nissan expects higher plant utilization and is considering establishing a supplier park near the new plant. The establishment is expected to reduce Nissan's parts procurement cost and enhance its competitiveness.

  ・ Honda intends to postpone its plan to start operations at its new  plant within 2015 to March 2016.

  ・Mazda launched operations at its automatic transmission (AT) plant in Thailand in January 2015 to supply products to its automobile plants in other countries as well. The OEM will also start operations at its new engine plant in October 2015.
 ・ Following these movements of automakers, Japanese parts suppliers have been actively expanding their production capacities and items to support growing demand and increase exports in Thailand. New entries by Tier 1 and Tier 2 suppliers have also continued. Some suppliers will establish regional headquarters and enhance development functions in the country.

Activities of Japanese suppliers in Thailand

New entries Aisin AW (ATs), JSP (foamed polypropylene), Sutai (impregnation of cast parts), Daido Steel (forged transmission parts), Toyo Advanced Technologies (oil pumps), Toray Hybrid Cord (fiber materials for timing belts), Nitta (hose and tube products), Pioneer/Increment P (digital maps), and Fukuju Industry (engine parts)
Enhancement of production capacities New plants:
Kyowa Kogyo (universal joints), JVC Kenwood (in-vehicle cameras), Taiho Kogyo (vacuum pumps), Diamond Electric Mfg. (ignition coils), TBK (parts for commercial vehicle engines), NiKKi Fron (clutch parts), Meidoh (bolts), Yasunaga (connecting rods), and Univance (transfer units)
Plant expansion:
Shin-Etsu Chemical (silicon monomers) and Sumitomo Rubber Industries (tires, etc.)
Facility expansion:
Aichi Steel (forged parts), Asahi Tec (aluminum wheels), Oiles Corporation (bearings), San-En (continuously variable transmission parts), Jidosha Buhin Kogyo (propeller shafts, etc.), Sumitomo Electric Industries (aluminum wires), NSK (electric power steering), Mitsuchi (industrial fasteners), and others
Expansion of production items Akebono Brake and Mohka Mfg. (establishment of a new company for cast-iron brake caliper parts), Kobe Steel (considering establishment of a new joint venture for wire rods), Sanyo Special Steel (establishment of a new company for formed bearing materials), Chuo Spring (technical cooperation agreement with a local parts supplier on suspension parts), Toyota Boshoku (establishment of a new company for interior parts), Nishikawa Rubber (glass run channels), Nisshinbo Brake (establishment of a new company for commercial vehicle brakes), NGK Insulators (establishment of a new company for ceramics for exhaust gas purifiers), and Nihon Plast (construction of a second plant for plastic parts)
Reinforcement and restructuring of businesses Nippon Piston Ring (setup of a global supply hub for valve seats in Thailand), Hitachi Chemical (merging four consolidated subsidiaries), Furukawa Automotive Systems (establishment of Southeast Asia headquarters), and Mitsubishi Materials (establishment of Asian headquarters)
Development and technical centers, etc. New establishment: Omron (design and development department for in-vehicle products), Kasai Kogyo (development center for interior parts), and The Yokohama Rubber (tire development center)
Expansion/enhancement: Denso (increase of engineers)

Sources: Press releases by each company


 For activities of Japanese suppliers in Southeast Asian countries other than Thailand, please refer to "Japanese suppliers in Southeast Asia: Abundant opportunities for growth" posted in April 2015.


Japanese Supplier Reports:
* Europe (Aug. 2015)
* 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)