Japanese Parts Suppliers in India: Supporting Increased Automobile Production

Trends of companies including Sanoh Industrial, Showa, Toray, Toyoda Gosei, and NHK Spring


Indian market overview: Continuing recovery

In 2015, 4.13 million automobiles were manufactured (7.4% increase year-over-year (y/y)), and 3.43 million new vehicles were sold (7.8% increase y/y). In addition to the introduction of new vehicles that sparked demand, a decrease in fuel prices and interest rates also contributed to the increase in sales. The totals for January to April 2016 were also strong, with approximately 1.5 million vehicles manufactured (6.7% increase y/y), and 1.22 million new vehicles sold (7.2% increase y/y). Exports also increased, with 708 thousand units exported (5.2% increase y/y) in the period from FY 2014-15 (April 2014 to March 2015), marking the first time exports have exceeded 700 thousand units. In the period from FY 2015-16 exports continued to increase, reaching 756 thousand units (6.7% increase y/y).

OEMs continue to increase production and improve efficiency

Amidst these trends, Suzuki plans to open a new plant in 2017 (annual production capacity of 250 thousand units) in Gujarat, where Ford began operations at a new plant (annual production capacity of 240 thousand units) in March 2015. In 2016, Honda plans to expand its annual production capacity at its second plant in Rajasthan by 60 thousand units. As for GM, the Halol plant it took over from Hindustan Motor in Gujarat has shown signs of aging, with its operation rate stalling at 30 to 40%, and the manufacturer will close the plant in the second half of FY 2016. As a result, GM will increase annual production capacity at the Talegaon plant in Maharashtra from 130 thousand units in 2015 to 220 thousand by 2025, aggregating production and increasing efficiency at the plant.

Investments by Japanese parts suppliers

In pursuit of goals that include dealing with plans for increased production by various automobile manufacturers, increasing business partners, and creating bases for global export, Japanese parts suppliers have promoted the expansion of their production capabilities, enhanced business structures, and greeted new entrants into the market. There have also been cases of production subcontracting to local parts makers for new companies, and for supplying new components.

New Entrants to the Market (components produced)

New companies / Establishment of factories Usui Kokusai Sangyo Kaisha (piping), Koiwai (engine parts), Toray (airbag base fabric), Nidec Corporation (onboard motors, also planning to invest in increased production), Hitachi Automotive (valve timing control, etc.), Yokohama Rubber (passenger car tires)
Companies that have commissioned local production Clarion (car navigation systems), Toray Hybrid Cord (tire reinforcement materials)

Companies that have Increased Production (components produced, items with an asterisk are new)

Expansion of equipment / plants Nishikawa Rubber (*glass run channels), Nittan Valve (engine valves), Piolax (fasteners, valves), Mitsuba (window washer systems, etc.), Musashi Seimitsu (forged parts)
Newly established companies FCC (clutches), Kosei Aluminum (aluminum wheels), Toyoda Gosei (rubber hoses)
Companies that have established their own factories Nippon Piston Ring (valve seats)
Companies that have opened second plants H-one (automotive frame parts), Daido Metal (*engine bearings), Maruichi Steel Tube (*stainless steel exhaust pipes for buses and trucks)
Companies that have opened third plants Showa (shock absorbers), NHK Spring (precision springs), Hi-Lex (control cables, etc.)

Enhancement of business structures (components produced) / Cancelled entries

Acquisition of joint ventures and technical partners Igarashi Electric Works (compact motors), Sanoh Industrial (piping), GS Yuasa (lead-acid storage battery), Toyoda Gosei (steering wheels, airbags, etc.)
Establishment of sales offices NGK Insulators (exhaust gas control products), Piolax (fasteners, etc.)
Establishment of development offices FCC (clutches), Nidec Elesys (onboard electronics)
Cancellation of new production facilities GMB

TS Tech has established a production facility for trim covers in Bangladesh as a global supply facility to replace the one in China, where export competitiveness has decreased.

The following are recent trends of Japanese parts suppliers in India and Bangladesh (the information has been compiled from the past two years until May 2016).

Japanese Supplier Reports:
* U.S. and Canada (Apr. 2016)
* 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)

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