Japanese parts suppliers in ASEAN: Responding to the increase in global market demand

Strengthen production systems to expand exports, and increase investments related to electrification

2018/08/10

Summary

 This report covers the Japanese automotive suppliers in the countries of ASEAN with regards to activities such as the establishment of new manufacturing sites, increased production capacity, expanding and changing the mix of products manufactured, and the strengthening business structures and development capabilities (for the 9 month period from July 2017 to March 2018).

 In Thailand, the number of vehicles produced in 2017 was 1.989 million units, reflecting a 2.3% increase from the previous year. And, from the January to June 2018 period, 105.7 million units were produced, up 11.1% compared to the same period last year. Domestic sales volumes reached 872,000 units in 2017, increasing by 13.4%, the first domestic sales volume increase in five years. And, from January to June 2018, sales volumes increased by 19.3% to 489,000 units and continue to be strong. Contributing to the volume increases were factors such as the introduction of new models, the increase in consumer confidence, expansion of private investment and public expenditures, and economic recovery. Exports of finished vehicles in 2017 decreased by 4.1% to 1.14 million units, but in the period from January to June of 2018, exports recovered by 4.8%, to 562,000 units.
 Concurrently, Japanese automakers continue to pursue the strategy of using Thailand as a global export base, and in addition to the policies of the Thai government to regulate fuel-efficient eco-car production, automakers can be seen introducing electric cars. Japanese auto parts suppliers are also continuing their efforts to expand production capacity to meet anticipated growth in the mid-term, both domestically and for export, as well as introducing parts and materials that will satisfy market trends relating to electrification and weight reduction.

 In Indonesia, 2017 sales volumes were 1.079 million units, up 1.6% from the previous year, and in the January to June 2018 period have recovered to 554,000 units, representing an increase of 3.8% over the same period last year. Production volumes in 2017 increased by 3.3%, to 1.217 million units, and in the January to June 2018 period increased by 4.4% to 624,000 units. There is a lot of demand for MPVs (multi-purpose vehicles), but in recent years the sales of SUVs is also growing. Japanese automakers are expanding manufacturing sites and localizing parts, expecting the Indonesian market to expand in the medium term. Japanese part suppliers are also striving to increase production capacity and introduce new products to meet new evolving market demands.

In Vietnam, production capacity has been increased to expand the global export of products such as plastic molding, precision springs, wire harness, motors, and molded parts. Regarding airbag related products, Toyoda Gosei is considering the construction of a branch factory and Teijin is considering the construction of a new factory for base fabric.

 In Malaysia, Koito Manufacturing established its first production base in the country to manufacture lamps. Toyo Tire & Rubber decided to construct a new facility, while the current tire plant continues to run at full capacity. Daiichi Seiko will establish a production base for components such as automotive sensors.

 In the Philippines, Ito Seisakusho has constructed a new manufacturing site for progressive molding, and Bandai established a new manufacturing site for wire harness. Japan Aviation Electronics (JAE) has a plant for automotive connectors, and Murata Manufacturing has increased the production capacity of its plant for multilayer ceramic capacitors. S2I, which develops software for bill of materials (BOMs), has established a subsidiary to conduct business in English in the Philippines.

In Singapore, Asahi Kasei is strengthening its production capacity for rubber used to manufacture fuel-efficient tires. Nihon Zeon will establish a technical support site for specialty rubbers for customers in the ASEAN and India region.

Map of automotive plants in Thailand
(click to see a map of facilities)
Map of automotive plants in Indonesia
(click to see a map of facilities)
For countries and regions other than Thailand and Indonesia please refer to the map entitled ‘OEM Plants Interactive Map’



Activities of Japanese auto parts suppliers in Thailand (products manufactured, etc.)

New market entry and Acquisitions Ube Industries (PP resin additive), Kaneka (beads foam polyolefin), Sanyo Chemicals (foamed urethane raw material), Daido Metals (aluminum diecast products for EVs), Teijin (resin compounds, technology development center), Toda Kogyo (magnetic compounds), Hitachi Chemical (acquired a lead storage battery company in Thailand)
Increased production capacity, Production line renovation, and Manufacture of new products (*)
<New factory construction>
SEKI Corporation (second factory for pressed parts), NGK Manufacturing (automotive sensors)
<Factory expansion, facility enhancement>
Shindengen Electric Manufacturing (vehicle power ICs), Sumitomo Rubber(SUV tires), Sumitomo Electric (*flat winding wires for hybrid vehicle motors), Diamond Electric (ignition coil), Teijin Frontier (polyester fiber related products and research and development base), CMK Corp. (on-board substrate products for ADAS), Mitsubishi Chemical (*styrene type),Hitachi Metals (nanocrystalline soft magnetic material used for EV power circuits), Funai Electric (*plastic molded parts for small EVs), Mitsubishi Chemical (* styrene thermoplastic elastomer), Mitsubishi Heavy Industries Thermal Systems (air conditioner compressor for EVs), Yamagen (precision press manufacturing of electrical equipment), UACJ (aluminum material for heat exchangers), Yorozu (part molds)
Strengthening of sales and business structure Kobe Steel (headquarters for Southeast Asia and South Asian region), Sanyo Trading (made joint venture sales company a wholly-owned subsidiary: auto parts), Daikin Industries (Sales and marketing subsidiary: fluorochemical products), Toyota Tsusho (verification testing of a lane-class high-accuracy route guidance system), Bando Chemical (new company with Asia headquarters function)

Source: Created based upon the business plans of each company

Activities of Japanese auto parts suppliers in Indonesia (products manufactured, etc.)

New entry Nippon Steel & Sumitomo Metal (New plant operational: cold-rolled steel plate, rust resistant steel plate, high tensile steel plate, etc.)
Increased production capacity, and Changes to products manufactured <New plant construction>
MK Kashiyama (Acquisition of new plant: increased production of disc brake pads for replacement market), Nitto Seiko (No. 2 Plant: special cold forged parts, heavy duty bolts and screws)
<Facility enhancement and change of items produced>
Koito Manufacturing Plant Building Expansion: increased production of lamps), Metal Art (changed the items being produced at its existing plants from propeller shaft components to Manual Transmission gears)
Strengthening of business structure Iwasa (leased plant operational: started metal manufacturing, in addition to the sales of steel material), Kyowa Industry (leased plant operational: switched from the import and sale of sun visors to local production), NSG (investment in local companies: battery separators for lead storage batteries), Mitsubishi Steel (made joint venture into a consolidated subsidiary: specialty steel materials)

Source: Created based upon the business plans of each company

 

Activities of Japanese auto parts suppliers in Vietnam (items produced, etc.)

New Entry EQual (leased plant: manufacture of parts made of aluminum, plastic, etc.), Teijin (considering a new plant facility: investigating whether to establish a new plant for air bag base fabric), Japan Molymer (leased plant: injection molded parts)
Increased production capacity and additional products <New plant construction>
Advanex (relocated to a new, expanded factory: precision springs), Toyoda Gosei (branch plant: airbag parts and handles), Pronics (No. 2 Plant: resin molded parts), Mabuchi Motor (branch plant: small motors)
<Expansion of facilities, products manufactured (* = added)>
Toshin Seisakusho (full-scale intermediary business of parts processing such as casting and injection molding), Punch Industry (facility expansion: molded parts), Mitani Sangyo (facility extension: plastic molded parts), Yokowo (factory expansion: wire harness and AM / FM micro antenna, *shark antenna, etc.)

Source: Created based upon the business plans of each company

 

 

Related reports:
Thai vehicle production expected to grow to 2 million units in 2018 (Apr. 2018)
ASEAN: Vehicle sales recover, shifting from eco-car policies to EV incentives (Feb. 2017)
Indonesia: Market size recovers to a level of 1.1 million vehicles, local production advances (Aug. 2017)

Japanese Supplier Reports
  Central and Eastern Europe (Feb. 2018)
  Western Europe (Dec. 2017)
  North America (Aug. 2017)
  Mexico and Brazil (Jun. 2017)