Japanese Suppliers in the U.S. and Canada: High demand leads to rising production

Akebono Brake, JTEKT, Sumitomo Rubber, Daicel, TS Tech, Mitsubishi Heavy Industries, and more

2016/04/05

Summary

US Light Vehicle Production This report will take up the operational trends of Japanese auto-parts suppliers in the United States and Canada. Developments such as production capacity enhancements and the manufacturing of new components will be summarized (Information for roughly a year until early March 2016 was compiled).
(Note: The Japanese fiscal year is from April to March of the following year.)

 Automobile sales in the U.S. (passenger cars, light trucks) reached a record-high of 17,470,000 units in 2015, up 5.7 percent year-on-year. Growth in sales volume growth is continuing, with cumulative sales in January and February 2016 at 2,492,000 units, up 3.5 percent y/y. Sales volume for all of 2016 is expected to set yet another record-high. 

 Automobile production in the U.S. (passenger cars, light trucks) is also expanding, with 11,780,000 units produced in 2015, up 3.7 percent y/y.

 Production by Japanese auto manufacturers in the U.S. (same categories as above) only grew slightly in FY 2015, with 3,850,000 units, up 0.9 percent y/y, but a high-operation rate continues. A high level of production is expected through FY 2016.

 To keep pace with production, Japanese suppliers are augmenting their production capacities by adding new production lines and equipment at their existing plants, and building additional facilities. Moreover, it is possible that new plants are being built to manufacture new components. Orders from European and American OEMs are also continuing to increase.

 

Form of
investment
Manufacturer Production items (new items*), implementation status, and etc.
Strengthening capacities (equipment, production lines, new plants) Akebono Brake Ind. Disc brakes, friction material, aluminum parts (capacity enhancement, review of production items at each plant)
Exedy Torque converters for automatic transmissions (production line renewal)
MC Systems Anti-corrosive treatments for items like bolts, nuts, and springs (capacity enhancement) 
Kasai Kogyo Door trims and other interior parts (plants to be made solely for use by Honda and Nissan respectively)
Kinugawa Rubber Ind. Autobody seals (reserve capacity to be created by miniaturizing production lines and equipment)
Keihin Corp. Intake manifolds (new production lines), air conditioning systems (integrated production), gasoline direct-injectors* (mass production), ECU (capacity increased)
Kobe Steel, Mitsui & Co., Toyota Tsusho Aluminum forging for suspensions (equipment enhancement)
Kotobukiya Fronte Floor carpets, etc. (capacity increased)
JTEKT Corp. EPS* for medium- and high-end cars (new production lines)
G-TEKT Corp. High-capacity hub units* (added production lines)
Somic Ishikawa Reclining dampers* (plans to use unused space in existing plants)
Tigers Polymer Air cleaner modules, etc. (new plant building construction)
TS Tech Seat frames, seats (new techniques introduced, constructing annex)
Toyo Tire & Rubber Tire (plant expanded) 
Toyobo Airbag foundation cloth and yarns (facility expansion)
Piolax Hose clamps (operation of expanded facilities)
Mitsubishi Electric Alternators (new plant building added)
New companies,
new plants
NTN Corp. Driveshafts (third manufacturing company established in North America)
Otsuka Chemical Brake pads (launching a new plant)
Nippon Steel & Sumitomo Metal Corp. Cold heading quality (CHQ) steel wire (constructing a new plant)
Sekisui Plastics Foamed plastic parts (launching a second plant)
Sekiso Corp. Porous ducts (launching a new plant)
Daicel Corp. Inflators (launching a second plant)
Toray Industries Carbon fibers (constructing a second plant)
Toyoda Gosei Plastic fuel tube (launching a new plant, transferring production from existing plants)
Nifco Inc. Interior plastic parts (new company established)
Nishikawa Rubber Weather strips (launching a third plant)
Fine Sinter Engine, transmission, and shock absorber parts (adding a new plant)
Bridgestone Corp. Radial tires for passenger cars (constructing a third plant)
Mitsubishi Heavy Ind. Turbochargers (launching a new plant)
Yokohama Rubber Tires for trucks and buses (launching a new plant)
Yorozu Corp. Suspension parts (constructed a second plant)


 Among the Japanese suppliers with plans to augment their business structures, Sumitomo Rubber Industries bought a plant from Goodyear Tire & Rubber Company when it dissolved their alliance. Nissin Kogyo established a joint venture with the Swedish company Autoliv, and Suminoe Textile Co., Ltd. acquired an American interior material manufacturer, among other activities. Due to the weakening yen, Nichirin Co., Ltd. is transferring production of hoses for hydraulic power steering to Japan.

 For companies planning to enhance R&D, Kasai Kogyo Co., Ltd. is increasing the number of employees engaged in development. Yokohama Rubber Co., Ltd. is proceeding with plans to establish a development facility by relocating staff to oversee it.


 Among Japanese parts suppliers in Canada, TS Tech Co., Ltd. is expanding its seat plant, and Bridgestone Corporation is planning to increase capacity at its radial tire plant for passenger cars and light trucks.


Japanese Supplier Reports:
* China: East/North/Northeast regions (Nov. 2015), China: South/Central/Southwest regions (Nov. 2015)
* Thailand (Sep. 2015)
* Europe (Aug. 2015)
* Mexico (Jun. 2015), Mexico and Brazil (Jul. 2015)
* Southeast Asia (May 2015), the U.S. (Mar. 2015)
* India (Nov. 2014)