Japanese suppliers in China: Expanding the supply of parts and materials for NEVs

Activities for Northeast China, North China, Central China, South China, etc.

2019/06/04

Summary

華東周辺

China automobile plant map (Click to open site map)
South China / Central China / North China / Southwest China / Northeast China

 This report presents the activities of Japanese parts suppliers for China in general, Northeast China, North China, Central China, South China, Southwest China, and Taiwan. (Based on news sources over the approximate 15 month period from February 2018 to April 2019)
 * Please refer to the previous report entitled Japanese Suppliers in East China.

 In 2018, automobile production volume in China was 27.81 million units (down 4.2% year-on-year, YoY), and sales volume (factory shipments) was 28.08 million units (down 2.8% YoY), indicating a slowdown in market growth. The main factors for the slowdown include the impact of the U.S.-China trade war and the slump following the last-minute increase in demand at the end of 2017 before the tax incentive policy for small passenger cars was discontinued. In terms of sales by vehicle type, the number of SUVs sold decreased to 9.995 million units (down 2.5% YoY), and the number of sedans and hatchbacks sold decreased to 11.528 million units (down 2.7% YoY). In particular, the decline in sales during the second half of 2018 was severe, falling below the previous year's results in all months from July to December.

 Conversely, the sale volume of new energy vehicles (NEVs) such as EVs and PHVs increased significantly by 61.7% to 1.256 million units. Since January 2018, the Chinese government has implemented the “Vehicle Purchase Tax Exemption Notice for New Energy Vehicles” that exempts NEVs from the vehicle purchase tax. Meanwhile, the vehicle purchase tax rate for passenger cars with a displacement of 1.6L or less has been returned to 10%. In 2019, the NEV credit system was introduced for automakers with an annual production and sales volume of ICE (internal combustion engine) powered vehicles (gasoline vehicles, diesel vehicles, gas fuel vehicles, hybrid vehicles) of more than 30,000 units, which has accelerated the introduction of new NEV models and associated infrastructure.

 Guangdong province is adjacent to the city of Hong Kong and the city of Shenzhen is on the cutting-edge of IT and the origin of the transformation spreading throughout the auto industry in China. Shenzhen is home to the headquarters of BYD, the largest EV manufacturer in China, which is engaged in expanding its EV joint venture operations with Daimler. In addition, the city of Wuhan in Hunan province is located in the Yangtze River basin, so it has long been a transportation hub for the munitions industry and heavy industry. As for the automotive industry, Wuhan is also where the headquarters of the Dongfeng Motor Group is located. In the North China region, there are the headquarters of the Beijing Automobile Group, where EV sales are strong, and the headquarters of Great Wall Motor, which will produce the MINI brand in the future. Many Japanese suppliers have already followed the Japanese OEMs to supply products to their joint venture assembly plants in Tianjin (FAW Toyota), Wuhan (Dongfeng Honda), and Guangzhou (Guangqi Toyota, GAC Honda, and Dongfeng Nissan). However, Japanese suppliers are strengthening their production systems due to the increase in the introduction of NEV models to market and to meet the increasing number of orders from Chinese automakers.

 In 2020, Toyota will launch the IZOA (FAW Toyota) and C-HR (GAC Toyota) EVs, which were announced at the Shanghai Motor Show. To meet the increase in demand for NEVs, Toyota will expand its Guangzhou plant, which is targeted to start operations in 2022. Honda will manufacture its second China-exclusive EV at its Wuhan plant, with plans to release the model in the second half of 2019.
 NEV-related activities by Japanese suppliers include Panasonic's start of production of prismatic lithium-ion batteries, Nidec's new E-Axle plant, and UACJ's new plant for aluminum materials used in lithium-ion batteries. Activities related to the expansion of customers include Aisin AW establishing a new manufacturing site for automatic transmissions, JTEKT increasing its production capacity of electric power steering (EPS), KYB's new EPS plant, and an increase in the production capacity of pressed parts by suppliers such as H-One, Topre, and G-TEKT. Furthermore, suppliers such as Keihin, Hitachi Automotive Systems, and Mitsubishi Electric are considering new production systems to supply products for electric vehicles.

 

Japanese supplier activities in China (*Introduction of new products):

New company (plant):
Establishment / Operation / Investment
Hebei province UACJ Corporation (Aluminum parts such as bumpers: Establishment of JV)
Hubei province Alps Alpine Co., Ltd. (Battery packs: Establishment of manufacturing site)
KYB Corporation (*Electric power steering: Joint venture agreement, establishment of manufacturing site)
Topre Corporation (Press parts: New company + new plant)
Nishikawa Rubber Co., Ltd. (Weatherstrip: New company + new plant)
Guangdong province Aisin AW Co., Ltd. (6-speed AT: New company + new plant)
Shichuan province Mitsubishi Chemical Corporation
(Functional plastic products: New plant)
Taiwan Sharp Corporation (In-vehicle cameras, electronic mirrors: Establishment of new company)
Production capacity increase Investment in production lines and equipment, etc. Nationwide IHI Corporation (Turbochargers: Improved production efficiency)
Ihara Electronic Industries Co., Ltd. (Printed circuit boards: Production capacity increase)
H-One Co., Ltd.(Die for press parts: Production capacity increase)
Topre Corporation (Press parts: Equipment expansion)
Honda Tsushin Kogyo Co., Ltd. (Connectors for in-vehicle cameras: Equipment automation)
Ryobi Limited (AT die-cast parts: Production capacity increase)
Tianjin city JTEKT Corporation (Electric power steering: Line expansion)
Nippo Co., Ltd. (Plastic molded parts: Equipment increase)
Hebei province Kyowa Leather Cloth Co., Ltd. (Synthetic leather, vinyl chloride upholstery: Production capacity increase)
Hubei province G-TEKT Corporation (Press parts: Equipment enhancement)
Marujun Co., Ltd. (Battery case: Line refurbishment)
Riken Corporation (Piston rings: Production capacity increase)
Guangdong province Alpha Corporation (Door handle parts: Equipment expansion)
Idemitsu Kosan Co., Ltd. (Compound products: Production capacity increase)
H-One Co., Ltd.(Welding jigs: In-house production)
Onkyo Corporation (Speaker units: Strengthened production system)
JSP Corporation (Polypropylene foam: Production capacity increase)
Di-Nikko Engineering Co., Ltd. (In-vehicle electronic devices: Line expansion)
Tsukada Riken Industry Co., Ltd. (Metal plating: Line expansion)
Nagatsu Precision Mold Co., Ltd. (Plastic parts: Equipment expansion)
Taiwan JSP Corporation (Rear seat core material: Equipment enhancement)
Plant and building expansion Liaoning province Nidec Corporation (E-Axle, brushed DC motors: New plant)
Panasonic Corporation (*Automotive prismatic lithium-ion battery: New plant)
Tianjin city Toyota Boshoku Corporation (Filters: Relocation, new plant)
Hebei province Z-MAX Co., Ltd. (Peltier element module: Relocation, new plant)
Guangdong province Mitsui Chemicals, Inc. (Long-fiber GFPP: New plant)
UACJ Corporation (Aluminum battery foil for lithium-ion batteries: new plant)
Strengthening of development and sales
(Plant acquisitions, joint ventures, and
Development, Sales, & Test sites)
Nationwide Sanden Automotive Climate Systems Corporation(EV heat pumps: Order expansion)
JVCKENWOOD Corporation (In-vehicle camera, electronic mirrors, etc.: Order expansion)
Shinmei Electric Co., Ltd. (In-vehicle switches, etc.: Expanded sales channels)
Daido Metal Co., Ltd. (EV parts, etc .: Technical Center opened)
Tachi-S Co., Ltd. (Seating: Strengthened development)
Nikki Co., Ltd. (CNG vehicle equipment: Strengthened sales structure)
BluE Nexus Corporation (Drive modules for electric vehicles: Established development site)
Liaoning province Alps Alpine Co., Ltd.  (*Dual output brake pedal position sensor: New product development)
Alps Alpine Co., Ltd.  (Car sharing service: Strengthened product development)
Tianjin city Sanden Automotive Climate Systems Corporation (Car air conditioners: Established environmental test building)
Hubei province Denso Corporation (Digital meters: Development joint venture)
Guangdong province F-Tech Inc. (Suspension parts: Strengthened development)
Kyocera Corporation (Auto parts, electronic parts: Establishment of open innovation center)
Showa Corporation (Shock absorbers, etc .: Increased development personnel)
Yachiyo Industry Co., Ltd. (Fuel tanks, sunroofs: Strengthened development)
Taiwan Nishimura Seisakusho Co., Ltd. (Press processing: Market development)
Strengthening and reorganization of business structure
(Plant acquisitions, joint ventures, and
Development, Sales, & Test sites)
Nationwide NOK Corporation (Flexible printed circuit boards: Considering alliance and manufacturing site)
Clarion Co., Ltd. (Car audio: Reorganized manufacturing footprint)
Keihin Corporation (PCU for electric vehicles: Considering manufacturing site)
Koito Manufacturing Co., Ltd. (Lamps: Sold subsidiary, strengthened production, considering manufacturing site)
Sumitomo Chemical Co., Ltd. (PP compound: Considering manufacturing site)
NGK Spark Plug Co., Ltd. (Knock sensors: Transferred production from Japan, opened Innovation Center)
Hitachi Automotive Systems, Ltd. ( Electric axle module parts: Considering manufacturing site)
Horiba, Ltd. (Evaluation testing equipment: Strengthened measurement operations)
Mitsui Chemicals, Inc. (LIB materials and lightweight materials: Capacity expansion study)
Mitsubishi Electric Corporation (ISG and other electric parts: Manufacturing site study)
Jilin province NTN Corporation (In-wheel motor drive system: Technical cooperation)
Inner Mongolia JFE Chemical Corporation (Negative electrode material for EV batteries: Joint venture)
Hubei province Toyoda Gosei Co., Ltd. (Weatherstrip products: Capital participation and site expansion)
Chongqing city Futaba Industrial Co., Ltd. (Exhaust manifold, etc .: Sale of subsidiary)
Taiwan Toyota Tsusho Corporation (On-board motors: Capital participation)
Mitsui Chemicals, Inc. (Carbon fiber procurement: Business alliance)
Renesas Electronics Corporation (In-vehicle microcomputers: Consignment manufacturing)

 

Related reports:
Japanese Suppliers in East China: Responding to NEV market expansion (May 2019)
2019 Sales Forecast in China (CAAM): NEVs to make up 1.6 million of 28.1 million vehicles sold (Apr. 2019)
2018 China market: 28.081M units for new car sales, 23.71M units for passenger cars (Feb. 2019)

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