Japanese suppliers in ASEAN: Investment trends centered on Thailand and Vietnam

Responding to electrification and medium-term increase in demand in the region

2020/06/26

Summary

  The activities of Japanese automotive suppliers in the ASEAN region are presented below (activities recorded during the 7 month period from June 2019 to January 2020). But it does not mention the impact of the COVID-19 on each company.

  Thailand's 2019 vehicle production volume was 2.533 million units, down 1.7% year-over year (y/y). Sales volumes were down 3.9% y/y to 1.719 million units and exports were up 7.1% y/y to 949,000 units. During January to May of 2020, production volume was down 40.2% y/y to 534,000 units, sales were down 38.2% y/y to 271,000 units, and exports were down 35.0% y/y to 301,000 units, reflecting a significant drop due to the negative impact of the COVID-19 pandemic.
  In 2019, Indonesia’s sales volume was 1.031 million vehicles, down 10.5% y/y, and production volume was 1.287 million units, down 4.2% y/y. During January to May of 2020, sales were down 41.4% y/y to 248,000 units and production was down 32.8% y/y to 525,000 units. Like Thailand, Indonesia experienced significant declines in both sales and production volumes.
  In the four major ASEAN countries, 2019 production volumes fell 4.5% y/y to 3.97 million units, the first decline in three years.


 * Please refer to the following content for details on the impact associated with the coronavirus (COVID-19) pandemic.

 

Expected to increase demand in the medium term, and production transfer from China and the United States

  Even in the midst of declining production and sales volumes, Japanese auto parts suppliers are enhancing their production capacity in anticipation of medium-term demand growth in the ASEAN region and increased exports to Japan, the U.S. and Europe. In Vietnam, Toyoda Gosei started operations at its No. 2 Plant for airbag components, and Asahi Kasei Advance established a subsidiary for airbag sewing and processing. In Malaysia, Toyo Tire completed the construction of a new plant to manufacture tires for SUVs and passenger cars. In the Philippines, Mitsubishi Steel Corporation activities include the start of operations at its first suspension spring plant in the ASEAN region.
  In addition, Japanese suppliers in ASEAN are also engaged in activities to improve the productivity of local plants through automation and systemization. UACJ is operating its plant in Thailand remotely from Japan to improve the manufacturability of rolled aluminum products. In Thailand, Kanemitsu is developing components using simulation technology at its technical center, while Seiren is promoting the automation of product inventory management and the adoption of IoT (Internet of Things).
  There are also plans in the works to transfer production from China and the U.S. to ASEAN. NOK transferred the production of anti-vibration rubber related products from China to Thailand to avoid the effects of the trade friction between the U.S. and China. Kyocera transferred a portion of its production of products such as automotive camera modules from China to Thailand. Honda Tsushin Kogyo now operates a consignment manufacturing site for automotive connectors in Vietnam instead of importing from China. Conversely, Univance plans to switch from manufacturing four-wheel drive systems in Thailand instead of the U.S.

 

CASE related business

  Even in the midst of declining production and sales volumes, the ASEAN region is pushing ahead with initiatives such as electrification, the promotion of CASE technologies, and more stringent environmental regulations.
  As for electrified vehicles such as EVs and HVs, Mitsubishi Heavy Industries is increasing its production capacity for car air-conditioner parts for EVs in Thailand; Daido Metal started operating a new plant for aluminum die-cast products for electrified vehicles; and Rohm is increasing the production of magnetic insulated gate driver ICs, which are necessary for the control of inverters equipped in vehicles such as EVs. In Vietnam, Sanden AC increased its production capacity of air conditioner compressors for electrified vehicles and established a technical center, with plans for the advanced development of products for EVs. As for used batteries, the Toyota Group launched its first overseas HV battery recycling business in Thailand and Dowa started a waste battery processing business for vehicles such as HVs and EVs.
  In addition, Pioneer is moving forward with its plan to consolidate and increase production capacity in Thailand through the reorganization of its domestic and overseas manufacturing sites for car navigation systems. Nidec is building a new plant in Vietnam for heat dissipation products for vehicles equipped with 5G technology, with plans to convert its motor plant for HDD (hard disk drives) to produce traction motors for electrified vehicles in the Philippines. Hitachi Metals is strengthening its production capacity for EPB (electric parking brake) harnesses in Vietnam and Thailand, while building a new manufacturing site in the Philippines for soft magnetic materials used in high frequency power supply transformers for servers and EVs.
  With regards to materials for electrified vehicles, Daido Steel is building a new manufacturing site for the secondary processing of special steels in Thailand to increase its capacity to supply high performance materials that can meet the requirements associated with low fuel consumption, HVs, etc. Teijin is building a new plastic compound plant and a development facility, and is executing plans to meet demand in the areas of next generation vehicles and communications. Mitsui Chemicals is increasing the production capacity of PP (polypropylene) compounds in response to weight reduction needs.
  In addition, as for MaaS (Mobility as a Service), Mitsubishi Motors and Mitsubishi Corporation invested in Gojek, a major mobility service provider in Indonesia. Denso and GMS started a transport demonstration project using small refrigerated trucks in Indonesia.

 

Activities of Japanese auto parts suppliers in multiple ASEAN countries (products, etc.)

Production capacity expansion Hitachi Metals (EPB = Harness for Electric Parking Brake: Vietnam, Thailand)
Strengthened alliances Piolax (Industrial fasteners, etc.: Vietnam, Indonesia, etc.)

Thailand

New businesses, new companies and plants Takano Automotive Parts Manufacturing (small EV pickup trucks for short-distance transportation); Daido Steel (New plant: secondary processing of special steel); Daido Metal (New plant: *aluminum die-cast products for electrified vehicles); Toyota, Denso and Toyota Tsusho (HV battery recycling business); Dowa (waste battery treatment business for vehicles such as HVs and EVs); Zeon Corporation (New plant: *polyacrylic rubber).
Production capacity expansion, introduction of new products, and establishment of development sites, etc. New plant construction:
Taiyo Industries (No. 3 Plant: precision pressed parts), Mino Industry (No. 2 Plant: aluminum die casting)

Plant expansion and equipment enhancement:
Ube Industries (PCD, a raw material for polyurethane), Kanemitsu (parts design using virtual prototype simulation: transmission parts, etc.), Keihin (first order from Toyota: engine parts), Seiren (automation of product inventory management: seat materials, etc.), Teijin (*construction of resin compound plant and new development facility); Technoplast (construction of own factory: plastic cutting processing), Mitsui Chemicals (facility enhancement: PP compound), Yamagen (Expanding plant to increase production capacity and the manufacturing of products such as in-vehicle electronic components), UACJ (hot-rolling mill remotely operated from Japan: rolled aluminum material), Yorozu (die-casting and production), and Rohm (facility expansion: gate drivers for inverters installed in vehicles such as EVs).
Production transfer NOK (production transfer from China: anti-vibration rubber-related products), Kyocera (production transfer from China: in-car camera modules, etc.), Pioneer (consolidation of domestic and overseas manufacturing sites for car navigation systems in Thailand to increase production capacity), and Univance (production transfer from the U.S.: four-wheel drive devices).
Regional representative company, company consolidation and dissolution Asahi Kasei (establishment of a regional representative company in Thailand; high value-added businesses such as automotive materials and apparel at 16 companies in 5 countries in the ASEAN region), and Mitsubishi Chemical (consolidation of 3 companies in Thailand).

Vietnam

New entry, new manufacturing sites, technical center, consignment manufacturing site Asahi Kasei Advance (New company: airbag sewing), Sanden AC (increased production of compressors for car air conditioners and establishment of technical center, advanced development for EVs), Nidec (New plant: heat dissipation parts for 5G compatible devices), Honda Tsushin Kogyo Co., Ltd. (Consignment manufacturing site from China: in-vehicle connectors)
Increased production capacity and introduction of new products Construction of new plants:
Toyoda Gosei (2nd manufacturing site: airbag parts), Harada Industry (No. 3 Plant: fin type antenna), Meiko (No. 3 plant: *products such as substrates for next-generation vehicles)
Facilities expansion:
Uchiyama Kogyo (bearing seals, etc.), Nanshin Seiki (connectors, etc.)

Indonesia

MaaS Denso and GMS (Small refrigerated truck transport demonstration project), and Mitsubishi Motors, and Mitsubishi Corporation (Investment in Gojek, a leading Indonesian mobility service provider)
Production capacity expansion Suwako Seimitsu (Expanded the local plant for small diameter precision machined parts)

(References: Company PR materials and news articles)

 

map map
Thailand automobile plant map (Click to open site map) Vietnam automobile plant map (Click to open site map)

For countries and regions other than Germany please refer to the map entitled ‘OEM Plants Interactive Map


Related reports:
ASEAN: Thailand and Indonesia aim to be regional EV hubs, CASE businesses growing (May 2020)
Thailand International Motor Expo 2019: Eco-cars, sports models, and pickup trucks (Dec. 2019)
Thai government approves nine OEMs’ investment projects for electrified vehicles (Jul. 2019)
Indonesia: Considering measures for the introduction of electric cars, automakers seeking incentives (May 2019)


<Japanese Supplier Reports>
  Western Europe: Responding to advancements in CASE technologies (Apr. 2020)
  India: Responding to stricter emission regulations and EV policy (Nov. 2019)
  U.S. and Canada: Expanding CASE business and local collaboration (Sep. 2019)
  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)
  Mexico: Focusing on Changes to NAFTA (Oct. 2018)