Japanese suppliers in U.S. and Canada: Expanding CASE business and local collaboration

Increased demand for SUVs and pick-ups while avoiding U.S.-China trade friction

2019/09/19

Summary

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

  In the U.S. market, motor vehicle (passenger car and light-duty truck) sales were 17.27 million units in 2018, a slight increase of 0.3% over the previous year. By vehicle type, passenger car sales dropped 13.1% compared to the previous year, but light-duty trucks grew by 8.0%. In the period January through August 2019, sales were 11.48 million units, an increase of 0.1% compared to the same period in the previous year, with passenger cars reaching only 3.45 million units (a decline of 8.0% year-over-year (YoY)) while light-duty truck sales grew to 8.04 million units (an increase of 4.0% YoY).

 To meet the growing demand for SUVs, cross-overs, and pick-up trucks, the OEMs and parts suppliers are being compelled to re-exam their strategies for the U.S. market. Ford and GM have announced the removal of most of their sedans from their domestic product line-ups and have proceeded to enhance their light duty truck models.
 The Japanese suppliers have plans to manage the situation, including Aisin AW (building a new plant for automatic transmissions for SUVs and hybrid transmissions), Exedy (installing a new line for pick-up truck torqued converters) and Bridgestone (increasing production capacity of radial tires for trucks and buses).

 

 In addition, to respond to CASE (connected, autonomous, shared, electric) related technologies, Japanese supplier actions such as collaboration with American companies and business acquisitions can be seen.
 As for autonomous driving and connected car related trends, Toyota invested in Uber and the 2 companies agreed to collaborate on the development of autonomous driving technologies for mobility services. Further, Toyota and NVIDIA are working together to adopt an autonomous vehicle simulation platform.
 The Japanese suppliers are making various moves, including Denso (investing in semiconductor and software development companies), AGC (acquisition of copper clad laminates business for next-generation high speed communications), Fujitsu (cooperation on mobility services with Ford), Renesas Electronics (acquisition of Integrated Device Technology in the same industry), and Nikon (contracted production with Velodyne LiDAR).

 As for electrification related trends, GM and Honda agreed to develop advanced battery technology. Ford and VW have agreed to share EV platforms and autonomous driving technologies. GM announced an investment of USD 300 million at its Orion Plant in Michigan producing a new Chevrolet EV. Mercedes-Benz began the construction of a new battery plant in Alabama. BMW doubled production capacity of high voltage batteries at its plant in South Carolina.
 Examples of Japanese supplier activities include Panasonic (transferring R&D functions from Japan for automotive batteries for Tesla), Toshiba Infrastructure Systems & Solutions (cooperation with Johnson Controls on lithium-ion batteries) and Toda Kogyo (joint venture with BASF for lithium-ion batteries cathode materials). There are also plans to increase production capacity by Asahi Kasei (separators for lithium-ion secondary batteries) and Ahresty (motor housings, inverter cases, and others).

 

 Examples of some of the activities of Japanese suppliers in response to U.S.-China trade friction and increased import duties as well as the USMCA (United States – Mexico – Canada Agreement to supplant NAFTA (North America Free Trade Agreement)) includes companies such as Piolax (transfer of production to the US for products imported from China), Nitto Denko (setting up an alternative production system for automotive tapes in the U.S., Mexico, and Brazil), and Toray (increasing production capacity of polyolefin foam products in Japan and the U.S.).
  For the Toyota-Mazda joint venture plant (scheduled to begin operations in 2021), the establishment of joint ventures has been announced by Toyota Boshoku, Delta, and Toyo Seat (for seat production) and Toyoda Iron Works, Y-Tec, and Keylex (for stamped parts).

 

 This report summarizes the activities at Japanese automotive component suppliers in the U.S. and Canada, including expansion of production capacity, establishment of new companies, and reinforcing business structures (activities recorded during the 13 month period ending June 2019).

 

Activities of Japanese suppliers in the U.S.

Form of investment Supplier Product (* denotes new product)
Production capacity increase (expansion of facilities or production lines, construction of new plants or buildings, etc.) IHI Corporation Turbochargers (Build 2nd plant)
Aisin AW Co., Ltd. Automatic transmissions for SUVs and hybrid transmissions (New plant)
Asahi Kasei Corporation Separators for lithium-ion secondary batteries (Installation of equipment)
Ahresty Corporation Die-cast parts for electric vehicles * (Construction of new plant building)
Exedy Corporation Torque converters for pick-up trucks (Establishment of new dedicated line)
Kobe Steel, Ltd. Extruded and processed aluminum (New plant building, expansion of facilities)
Shin-Etsu Chemical Co., Ltd. Polyvinyl chloride plastics (Establishment of new integrated plant from the electrolysis process to production)
DaikyoNishikawa Corporation Large plastic components (Building new plant next to existing facility)
Chuo Spring Co., Ltd. Chassis springs * (Setting up new line in existing plant)
Teijin Limited Carbon fiber reinforced thermoplastic (CFRTP) products * (Existing plant)
Toyo Tire Corporation Tires (Construction of new plant building)
Topre Corporation High strength steel hot stampings (Expansion of buildings and facilities at 3 U.S. plants)
Toray Industries, Inc. Polyolefin resin materials for interior foam materials (Expansion of production facilities)
Nisshinbo Brake Inc. Copper-free friction materials (Construction of new plant building)
Nitto Denko Corporation Wire harness binding tape (Addition of equipment: alternative production in 3 countries: U.S., Mexico, and Brazil)
Nippon Piston Ring Co.,Ltd. Piston rings (Improvement of production efficiency, installation of new line)
HI-LEX Corporation New light-weight door modules * (Plant expansion, installation of new equipment)
Piolax, Inc. Hose clamps, metal fasteners * (Purchase of new building, expansion of facilities)
Faltec Co., Ltd. Millimeter wave radar cover (New dedicated line installed at existing plant)
Foster Electric Co., Ltd. Automotive speakers (Construction of production facilities at existing logistics center)
Bridgestone Corporation Radial tires for trucks and buses (Plant expansion)
Mitsui Chemicals, Inc. Long glass fiber reinforced polypropylene * (Establishment of new production line)
UACJ Corporation Aluminum processing for car bodies (construction of production system and re-entry into market)
Establishment of new production companies (including joint ventures) - Toyota Boshoku Corporation,
- Delta Kogyo Co., Ltd., - Toyo Seat Co., Ltd.
Seats for Toyota-Mazda joint venture plant * (Establishment of new joint venture company)
- Toyoda Iron Works Co., Ltd.,
- Y-Tec Corporation,
- Keylex Corporation
Press parts and welded components for Toyota-Mazda joint venture plant * (Establishment of new joint venture company)
Nagase & Co., Ltd. Materials for 3D printing * (Establishment of joint venture company with American start-up)
Nippon Steel Corporation Steel wire for cold heading (New plant operational)
Strengthen business structure (M&A, capital and technology alliances, establishment of joint ventures) Asahi Kasei Corporation Automotive related business (Acquisition of American company Sage Automotive Interiors, Inc., a major supplier of interior materials)
AGC Inc. 5G and autonomous driving related business (Acquisition of 2 American companies)
nms Holdings Corporation Automotive related business (Acquisition of business from Sony’s U.S. unit)
Kasai Kogyo Co., Ltd. Ceiling components (Reorganization of North American plant, improvement of business profit)
Sekisui Chemical Co., Ltd. Carbon fibers for automotive and aircraft applications (Acquisition of AIM Aerospace Corporation)
Dynamic Map Platform Co., Ltd. High precision 3D map solutions (Acquisition of U.S. autonomous driving map company)
TS Tech Co., Ltd. Logistics efficiency improvement in North America (Establishment of joint relay point for collection and distribution)
Denso Corporation Autonomous driving and advanced driver-assistance systems (Additional investment in U.S. semiconductor development company)
- Denso Corporation,
- Toyota Tsusho Corporation,
- Toyota Motor Corporation
Acceleration of connected car and over-the-air (OTA) systems development (Investment in U.S. software development company)
Tokai Carbon Co., Ltd. Carbon black (Completion of acquisition of Sid Richardson Carbon Ltd.)
Toshiba Infrastructure Systems & Solutions Co. Collaboration with Johnson Controls in lithium-ion battery business
Toyo Corporation Acquired U.S. sales rights for chassis dynamometer systems from Swedish company
Toda Kogyo Corporation Operation of lithium-ion battery cathode material plant changed to joint venture with BASF of Germany
Nagoya Precision Mold Co., Ltd. Maintenance facility for dies * (Establishment of branch office)
Nikon Corporation LiDAR sensors for autonomous driving (Consignment production from Velodyne Lidar Inc.)
Nitto Seiko Co., Ltd. Machines such as automatic screw driving machines (Transfer and expansion of U.S. subsidiary)
Panasonic Corporation Establishment of U.S. headquarters, transfer R&D and manufacturing functions from Japan
Fujitsu Ltd. Mobility services for Ford (Collaboration with U.S. company related to connected cars)
Bridgestone Corporation Consolidated wholesale tire business (Set up joint venture with Goodyear)
Musashi Seimitsu Industry Co., Ltd. Development of mobility solutions (Investment in U.S. venture firm and collaboration)
Renesas Electronics Corporation Strengthened autonomous driving technology (Acquisition of U.S. company in same industry)
Strengthening development and business structures F-Tech Inc. Strengthened information sharing at both development centers in North America and China
Kasai Kogyo Co., Ltd. Integration of 3 U.S. design and development centers
CCS Inc. Opened test facility in Detroit for image processing inspection solutions business
Sumitomo Rubber Industries, Ltd. Expansion of tire development structure in the U.S., including upgrade to high-performance test track
Sekisui Chemical Co., Ltd. Established research facility in Silicon Valley
Denso Corporation Connected car, MaaS (Establishment of new satellite R&D center in Seattle)
Toyo Tire Corporation Set up R&D center inside U.S. plant
Toyoda Gosei Co., Ltd. Established sales office in Ohio
Furukawa Electric Co., Ltd. Established R&D facility in Silicon Valley

 

Related Reports:
U.S. OEM Electrification Strategies, Including EV Product Timelines(Sep. 2019)
Mexico shifting production of compact cars to SUVs/pickups to meet the US demand(Apr. 2019)
OEM Operations in the U.S. in 2018 (Dec. 2018)

<Japanese Supplier Reports>
  ASEAN: Components and materials for electrification on the rise (Aug. 2019)
  China: Expanding the supply of parts and materials for NEVs (Jun. 2019)
  East China: Responding to NEV market expansion (May. 2019)
  Central and Eastern Europe: Responding to orders from European OEMs (Jun. 2019)
  Western Europe: Meeting increasing demands for electrification and others (May. 2019)
  India: Meeting tighter emissions and fuel economy regulations (Nov. 2018)
  Mexico: Focusing on Changes to NAFTA (Oct. 2018)
  U.S. and Canada: Strengthening of operations (Sep .2018)