Japanese suppliers in the U.S. and Canada: Increasing facilities for electrification
Production capacity to be increased to meet growing demand for light trucks
|Map of automotive plants in the U.S. and Canada
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U.S. vehicle sales (passenger cars and light trucks) declined by 1.3% year-over-year (y/y) to 17.06 million units in 2019. In 2020, the number of vehicles sold fell to 14.58 million units, down 14.6% from the previous year due to the impact of the COVID-19 pandemic. Sales were down 13% y/y in the first quarter of 2020, and down 33% y/y in the second quarter, but the decline in sales started to slow from the third quarter. In terms of sales by vehicle type, light trucks (including SUVs, crossovers, and minivans) continue to outperform passenger cars.
Despite these difficult market conditions, automakers are announcing ambitious investment plans, especially for light trucks and EVs.
GM plans to invest USD 27 billion through 2025 in electrification and autonomous driving technologies. In addition, the company will invest more than USD 2.3 billion to increase the production capacity of its existing plants, along with the implementation of its restructuring plan for its main North American plants. Ford announced that it will invest USD 700 million in the development and assembly of hybrid and electric models at its Michigan complex and USD 250 million to support the development of EVs. Tesla is investing about USD 1.1 billion to build an assembly plant in Austin, Texas. VW is building a production campus in Tennessee to prepare for EV production. Honda plans to jointly develop EVs with GM using GM's batteries. In addition, there is an increase in activity among the emerging EV automakers.
Toyota is bolstering its production of light trucks and hybrids, with plans to invest USD 13 billion in the U.S. over the five years from 2017 to 2021. The company announced that it would invest an additional USD 700 million in its main plant in Indiana in 2020. Toyota and Mazda will invest an additional USD 830 million in their joint venture plant in Alabama, which will begin production in 2021. Subaru announced that it will invest USD 158 million to expand its plant in Indiana. Each of these plants are manufacturing SUVs.
Japanese suppliers with EV-related activities include Mitsubishi Chemical (expansion of facilities and introduction of new manufacturing technology for electrolytes for lithium-ion batteries), Tachi-S (plans to produce seats for MaaS EVs), Musashi Seimitsu Industry (investment in a U.S. venture company to develop all-solid-state batteries), and Panasonic (joint development of small commercial EVs with a U.S. startup); Toray (installation of a carbon fiber production line for hydrogen tanks) is conducting fuel cell vehicle related activities.
Japanese suppliers with activities in the areas of connectivity and autonomous driving include Faltec (established a new dedicated line for millimeter-wave radar covers), Kyocera (made a U.S. start-up in laser light source technology a subsidiary), Koito Manufacturing (investing in a U.S. LiDAR venture company to develop lamps for ADAS and autonomous driving), Denso (co-developing next-generation LiDAR and cockpit systems with U.S. companies), Murata Manufacturing (signed exclusive contract with a U.S. company to develop communication components for 5G), and Renesas Electronics (collaboration with Microsoft for connected car development).
Other activities to increase production capacity include Teijin (construction of a new plant for composite molding materials for automobiles), NHK Spring (construction of a new plant for seats in response to the increase in the production capacity of Subaru), Nippon Steel (construction of a new electric furnace), Unipres (installation of a hot stamping line at its frame components plant), Toyoda Gosei (building expansion and facility enhancement at its interior and exterior parts plant), Kosei Aluminum (expansion of its aluminum wheel plant), and Nippon Paint (construction of a new electrodeposition coating plant).
Conversely, due to the contraction of the North American automobile market in 2019 and 2020, production systems are being reorganized including Akebono Brake (closed two plants and went to a one plant system), JTEKT (went from two bearing plants to a one plant system), and Nippon Electric Glass (closed one glass fiber plant and went to a two plant system). In addition, Mitsubishi Steel will suspend production of coil springs at its U.S. plant and consolidate production at its plant in Canada, as its profitability has deteriorated significantly due to rising material costs caused by the trade friction between the U.S. and China.
This report summarizes the activities of Japanese auto parts suppliers in the U.S. and Canada such as the expansion of production capacity and the strengthening of business structures. (The data used in this report was recorded for the approximate one year and six months period until February 2021.)
Emerging U.S. EV Makers on the Move: Many announce plans to launch in 2021 (Jan. 2021)
U.S. Biden Administration to Enact Tougher Fuel Economy Regulations to Promote EVs (Jan. 2021)
OEM Operations in the U.S. in 2020 (Dec. 2020)
The Impact of COVID-19 on the Automotive Industry (Nov. 2020)
Electric Powertrain Market Forecast in Major Countries (Oct. 2020)
Overseas Business Trends of Japanese Suppliers:
Japanese suppliers in Central and Eastern Europe: Meeting demand with new plants and acquisitions (Dec. 2020)
Japanese suppliers in China: Strengthening production and development of parts for NEVs (Oct. 2020)
Japanese Suppliers in East China: Increasing Capacity for NEV Market (Sep. 2020)
Japanese suppliers in ASEAN: Components and materials for electrification on the rise (Aug. 2019)
Japanese suppliers in Western Europe: Responding to advancements in CASE technologies (Apr. 2020)
Japanese suppliers in India: Responding to stricter emission regulations and EV policy (Nov. 2019)
Japanese suppliers in U.S. and Canada: Expanding CASE business and local collaboration (Sep. 2019)
Japanese Suppliers in Mexico: Focusing on Changes to NAFTA (Oct. 2018)