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
New and expanded manufacturing sites in the U.S.: Asahi Kasei, ADVICS, JPS, Daikin, Teijin, Denso, Toray, Mitsubishi Chemical, etc.
Strengthening of U.S. operations, acquisitions, and investments: Aisin Seiki, Shinden Electric Manufacturing, Sumitomo Corporation, Denso, Toda Kogyo, Pioneer, etc.
Increased U.S. development and sales staff: Kasai Kogyo, Yachiyo Kogyo
Canada – Contracted with Canadian company to develop resin composite materials： Sumitomo Bakelight

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)
	Denso	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)
	Sumitomo Corporation	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)
	Denso	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)
	Bridgestone	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.)

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

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