Japanese suppliers in the U.S. and Canada: Strengthening of operations

Increasing alliances and collaboration with U.S. companies, and the expansion of production capacity

2018/09/05

Summary

Map of automotive plants in the U.S. and Canada
(click to see a map of facilities)

  This report covers the trends related to Japanese automotive parts suppliers in the U.S. and Canada with regards to activities such as increased production capacity, the establishment of new manufacturing sites, and the strengthening of business operations (for the 8 month period prior to March 2018).

  U.S. auto sales (cars and light trucks) in 2017 decreased by 1.8% from 17.23 million units. In terms of sales by vehicle type, sales of passenger cars were down 10.9% YoY, but light trucks were up 4.3% YoY.

  Production volumes recovered slightly by 1.98 million units in the January to July 2018 timeframe, an increase of 1.2% over the same period the previous year. During this period, sales of passenger cars were 3.28 million units, down 12.3% and light trucks were 9.3 million units, up 9.3%. The shift in demand from cars to pickup trucks and SUVs continues.

  Production volumes in the U.S. (passenger cars and light trucks) in 2017 were 10.91 million units, down 8.4% from the previous year. By vehicle type, production volumes of passenger cars decreased 21.9% YoY, and light trucks decreased 1.8% YoY. In the January to July 2018 timeframe, production volumes decreased to 6.35 million units, down 1.4% YoY. Passenger cars were down 11.4% YoY, but sales of light-duty trucks increased slightly by 2.7% YoY.

  In light of this business environment, OEMs are increasing their investment in the U.S. with the aim of strengthening their operations in the medium term. GM, Ford and FCA are continually increasing their production capacity, announcing at least USD 700 million in new investments. Toyota and Mazda established a 50:50 joint venture in Alabama, investing about JPY 180 billion with plans to launch a plant by 2021 with an annual production capacity of 300,000 units. Honda announced that it will invest a total of USD 500 million or more to strengthen its existing plants in each state. Also, in response to the tightening of ZEV regulations, OEMs are promoting the introduction of electrified vehicles such as PHVs and EVs.

  In response to these developments, Japanese parts manufacturers are also implementing new production plans, not only for increasing the production capacity of existing products, but also for products such as those associated with electrification. In addition, acquisitions, investments, alliances, and collaborations with U.S. companies are also intensifying to strengthen these companies’ business structures in areas such as autonomous driving, electrification, and MaaS.

  In Canada, Sumitomo Bakelite signed a joint development contract with RIP Metal for lightweight, highly durable resin composites.

 



Activities of Japanese suppliers in the U.S. (products etc.)

Investment structure Supplier Manufactured parts(*New products。Implementation status, etc.)
Increased production capacity (Facility and production line expansion, etc.) Akebono Brake Brake caliper, brake pad (production line increase)
Asahi Kasei Separators for lithium-ion secondary battery (facility expansion)
ADVICS Electric parking brake* (new building construction)
FTS Plastic fuel tank (facility expansion)
Kobe Steel Galvanized super high-tensile steel (facility expansion)
JPS Foam polypropylene beads (facility expansion)
ShinEtsu Chemical Silicone, silicone emulsion* (facility expansion)
Sumitomo Rubber SUV tires (facility expansion)
Daikin Lithium-ion battery materials* (renovation of existing plant)
Diamond Electric New ignition coil* (new facility expansion)
Dainichiseika Urethane resin (facility expansion and renovation)
Denso Inverter for HVs, sensor parts for autonomous driving* (Existing facility expansion)
Gasoline direct injection devices, low and high pressure fuel pumps (increased production lines)
Toyo Tires Passenger car tires (new building construction)
Toray High strength carbon fiber for high-pressure hydrogen tanks for FCVs (renovation of existing line)
Topy Industries Iron wheels (introduction of latest equipment)
Nichirin Internal heat exchanger* for vehicle air conditioner (increased production lines)
Nippon Shokubai New paint materials to reduce CO2 emissions in the production process* (installation of manufacturing equipment)
Nippon Piston Ring Valve seat (increased equipment and installed new line to improve productivity at two plants)
Piolax Metal parts such as hose clamps (installed new building, added heat treatment furnace)
Panasonic Curtailed production of automotive lithium-ion battery cells, switched to storage batteries
Mitsubishi Chemical Electrolyte for lithium-ion secondary battery (increased production capacity)
Moriroku Technology Large exterior parts (introduced painting line)
UACJ Aluminum materials (built production line and introduced latest equipment)
Yutaka Gikeni Exhaust heat recovery devices for HV parts* (introduced new production line)
Yorozu Suspension (introduced automated equipment at new plant)
Establishment of new companies, addition of new plants Ube Industries Large hydraulic servo machine* (built new plant on site)
Kimura Foundry Casting* (First manufacturing site. Production with 3D additive manufacturing system)
Kosei Aluminum Aluminum wheel* (new plant construction)
Teijin Carbon fiber* (new plant construction)
Nissinbo Brake Brake friction material that complies with environmental regulations (construction of a new plant on site)
Business structure reinforcement (M & A, capital and technology alliances, establishment of joint ventures, establishment of development and sales sites, etc.) Aisin Seiki Technology development such as electrification and artificial intelligence (established investment fund)
Kasai Kogyo Interior parts such as door trim (doubled number of development personnel)
Shinden Electric Manufacturing Contactless power transmission technology for electric vehicles (Technical tie-up with WiTricity)
Sumitomo Corporation Car sharing, autonomous driving, EVs (invested in U.S. autonomous driving EV automaker)
Tire wholesale and retail business (joint operations with Michelin)
TS Tech Established new sales branch targeting the U.S. Big 3
TDK Ultrasonic sensors (acquired U.S. venture Chirp Microsystems)
Denso MaaS systems (invested in U.S. venture ActiveScaler)
Cyber security technology (invested in U.S. startup DellFer)
Tokai Carbon Carbon black (acquired U.S. Sid Richardson Carbon)
Toda Kogyo Positive electrode material for lithium-ion battery (establishment of joint venture with BASF of Germany)
Zeon Corporation High-performance material (established a distribution company in Silicon Valley)
Nippon Electric Glass Glass fiber business (acquired operations of PPG Industries in the U.S.)
Nippon Paint Automotive paint (discontinued negotiations to acquire AXALTA)
Pioneer Autonomous driving field (collaboration with NVIDIA of the U.S.)
Hitachi Chemical Solid electrolyte for all-solid battery (invested in Ionic Materials of the U.S.)
Bridgestone Commercialization of natural rubber Guayule (alliance with Versalis)
Sold a service subsidiary for U.S. truck carriers 
Mitsubishi Aluminum Heat exchanger plate for lightweight materials (agreed to establishing a joint venture agreement with Gränges)
Yachiyo Industry Plastic fuel tank (increased local staff of development and sales departments)
U-SHIN Key sets, etc. (dissolved U.S. subsidiary and shifted operations to Mexico plant)
Renesas Electronics Development of solution for automated parking system (partnered with Cogent of the U.S.)

 

Related Reports:
OEM Investments in the U.S. in 2017 (Dec. 2017)
Toyota's U.S. operations: full-scale release of Toyota brand TNGA and Lexus brand GA-L (Sep. 2017)
U.S. Market Analysis: Market share for SUVs hits 40% (Mar. 2017)

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