Japanese suppliers in China (4): Central & Southwestern China

Imasen, Topre, NHK, Nifco, Yorozu, Kasai, Unipres, NTN, Pacific Industrial, and Futaba



 Below is the fourth of the serial research report about the trends among Japanese automotive parts suppliers operating in China. Part 4 contains findings from MarkLines research on the recent trends in Hubei province, Henan province, and Hunan province of Central China, and in Chongqing city and Sichuan province of the southwestern China in the past two years up to June 2012.

 The primary customers of the Japanese parts suppliers, namely Nissan and Honda, are rapidly expanding their existing plants or building new ones or new production lines in central China to catch up with the brisk production and sales of their vehicles.

 Nissan is expanding its Xiangyang plant in Hubei province to increase annual capacity from 100,000 vehicles at the end of 2011 to 250,000 vehicles by the end of 2012. Likewise, the company is expanding two existing plants in Henan province to increase annual capacity from 210,000 to 380,000 vehicles in the same span. In addition, it has been reported that Nissan is considering building a new plant capable of producing 200,000 vehicles a year starting in or around 2015.

 Honda is to start a second passenger car plant in Wuhan, Hubei province in July 2012. Combined with the first plant, Honda has increased production capacity in Wuhan by 100,000 vehicles to 340,000 vehicles. The company has plans to expand the second plant to increase capacity in Wuhan to 360,000 vehicles in 2013, to 480,000 vehicles by 2015.

 In response to these moves, Japanese parts suppliers are expanding their existing plants or building new plants and lines in the regions.

 In addition to these, other parts suppliers including Furukawa Electric, Shoda Seisakusho and Mabuchi Motor are strengthening their production and sales capacities to meet growing demands among Japanese OEMs such as Toyota expanding its plant in Chengdu, Sichuan province, and Suzuki planning to build a new plant in Chongqing.


Related Reports: Japanese suppliers

China (South) (Aug. 2012), China (East) (Jul. 2012),
China (North and Northeast) (Jul. 2012), US (Aug. 2012),
ASEAN countries (Indonesia, Vietnam and Malaysia) (Jul. 2012),
Thailand (1) (Jul. 2012)/(2) (Jul. 2012), India (Mar. 2012), Mexico/Brazil (Feb. 2012), Europe (Dec. 2011)
Central & Southwestern China

Central China - Hubei province: Imasen, Topre and NHK building new plants, Nifco and Yorozu starting operation at new plants

Imasen Electric Industrial Co., Ltd.: Seat adjuster production starts in Wuhan

 In March 2011, Imasen Electric established an indirectly-owned manufacturing subsidiary, Wuhan Imasen Electric Industrial Co., Ltd. The new company, capitalized at 50 million yuan (60% owned by Imasen Electric, 40% by Guangzhou Imasen Electric), started operation in May 2012. The company plans to shift production of seat adjusters and other items for Dongfeng Nissan Passenger Vehicle's Xiangyang plant and Dongfeng Honda's Wuhan plant, in phases from its subsidiary in Guangzhou to the indirectly-owned subsidiary in Wuhan.

H-One Co., Ltd.: Expanding plants in Wuhan, adding automated lines

 H-One is expanding the plant of its subsidiary, Wuhan H-One Auto Parts Industries Inc., engaged in manufacture of structural parts of small sedans and SUV. The company plans to increase annual capacity from 240,000 vehicle sets in March 2011 to 360,000 sets by March 2013, and eventually to 480,000 sets. The number of employees will be increased from 990 to 1,120. The company will install additional, next-generation automated welding lines and increase the number of welding robots from 60 to 62 units.

Kasai Kogyo Co., Ltd.: Considering a new plant construction in Xiangyang

 In November 2011, Kasai Kogyo indicated it was considering a new plant construction most likely in Xiangyang, Hubei province, where Nissan and Honda's plants are located. Details and the progress of the plan have not been disclosed.

Calsonic Kansei Corporation: Expanding an existing plant in Xiangyang

 Calsonic Kansei is expanding the Guangzhou subsidiary's branch plant, the Calsonic Kansei (Guangzhou) Corporation Branch Xiangyang plant, as of April 2012. The company will construct a new plant building and install additional production lines for manufacturing cockpit modules, front-end modules, etc., to double sales revenue.

Stanley Electric Co., Ltd.: Building a new plant in Wuhan with a development function

 In October 2011, Stanley Electric established a subsidiary, Wuhan Stanley Electric Co., Ltd., engaged in the development, production and sale of automotive lighting equipment, electronic devices and dies. The new company, capitalized at US$30 million, is 35% owned by Stanley Electric (China) Investment, 50% by Guangzhou Stanley Electric, and 15% by Guangzhou Automobile Group's auto parts manufacturing subsidiary. The new plant is to start operation in January 2013 with sales revenue targeted at approximately 7 billion yen for FY2013 and approximately 8.5 billion yen for FY2014.

Topre Corporation: Building a new automotive pressed parts plant in Xiangyang

 In February 2012, Topre established a manufacturing subsidiary, Topre (Xiangyang) Auto Parts Co., Ltd. The new company, capitalized at 2 billion yen (total investment approximately 5 billion yen), is to start operation in January 2014 manufacturing automotive pressed parts that will be shipped to plants in inland regions. The company expects sales revenue of 2.5 to 3.5 billion yen for the first year of operation (ending March 2015) and 5 billion yen for the fiscal year ending March 2016.

Nanbu Plastics Co., Ltd.: Starting bumper, rear-view mirror and other plastic parts production in Xiaogan

 In April 2011, Nanbu Plastic's Guangzhou subsidiary, Guangzhou Nanbu Plastics Co., Ltd., established a branch plant, Guangzhou Nanbu Plastics Co., Ltd. Xiaogan Branch. The new plant began operation in the fall of 2011 manufacturing plastics parts (bumpers and rear-view mirrors). It has installed four 250- to 1,300-ton injection machines with monthly capacity of approximately 100,000 vehicle sets. Products are supplied mainly to Dongfeng Nissan Passenger Vehicle and Dongfeng Honda Automobile.

NHK Spring Co., Ltd.: A new seat structural parts manufacturing subsidiary completed in Xiangyang

 In November 2010, NHK Spring established a subsidiary for manufacturing seat structural parts in Xiangyang, NHK Seating (Hubei) Co., Ltd. The new company will start operation in January 2013 with 120 employees. The company is capitalized at 180 million yuan (total investment 261.5 million yuan) with a sales goal of 1,465 million yuan.
 It has been reported that NHK Spring is considering building a new plant, most likely in Wuhan, for suspension coil springs to be supplied to Japanese automakers in inland and northeastern regions. It has been reported that the company will invest approximately 2 billion yen in total in land acquisition, construction and equipment.

Nifco, Inc.: Production of automotive fasteners starts in Ezhou

 In the fall of 2011, Nifco's subsidiary in Hong Kong, Nifco (Hong Kong) Ltd., started operation at its manufacturing subsidiary in Ezhou, Nifco (Hubei) Co., Ltd., engaged in producing fasteners and other synthetic resin molded parts for automobiles. Products are supplied mainly to Nissan and Honda in China.
 The company exercised US$3 million capital increase at the end of 2011 to install additional equipment in the plant. The plant, now capitalized at US$10 million, had 70 employees at the end of 2011.

Nihon Tokushu Toryo, Co., Ltd.: Production of automotive sound insulators started in Wuhan

 In June 2011, Nihon Tokushu Toryo (Nittoku, a special paints manufacturer) started operation at its Wuhan subsidiary, Wuhan Nittoku Sound Proof Co., Ltd., manufacturing damping and insulating sheets. The company invested US$14 million in the plant construction having annual capacity of 300,000 vehicle sets maximum.

Faltec Co., Ltd.: Considering a new plant construction most likely in Hubei

 Faltec plans to build new plants and expand existing ones to increase productivity and local supplies of dies in China, and eventually export products to Japan. This way, the company will be able to increase the ratio of revenues in overseas markets from about 10 percent in February 2012 to 30 percent in 2015.
 In February 2012, Faltec disclosed that it was considering a new plant construction in central China where Hubei province (most likely location for the new plant) is situated. Although details are yet unknown, the new plant is expected to start operation in 2014 or so.
 Other than the above, the second phase of plant construction work is under way as of February 2012 at an existing subsidiary in Foshan, Foshan Faltec Automotive Parts Co., Ltd., where automotive parts are being manufactured.

Bridgestone Corporation: Production of urethane foam for automotive seats started in Wuhan

 In April 2012, Bridgestone's Wuhan plant, Bridgestone (Wuhan) Chemical Products Co., Ltd., began operation manufacturing urethane foam for making automotive seats with annual capacity of 300,000 vehicle sets. The new plant is Bridgestone's second urethane plant in China after the Guangzhou plant.
 The company invested approximately 1 billion yen (US$11 million) in the new plant built on a 20,000 square meter-ground hiring approximately 80 employees as of April 2012.

Yorozu Corporation: Production of chassis components starts in Wuhan

 In October 2011, Yorozu's manufacturing subsidiary, Wuhan Yorozu Bao Mit Automotive Co., Ltd. (51% owned by Yorozu, 25% by Baosteel Group, and 24% by Mitsui), began operation manufacturing chassis components primarily for Nissan's plants in Zhengzhou and Xiangyang and Honda's Wuhan plant. The plant is expected to start full operation in 2013 and the products will be supplied to other OEM in central China.



Central China - Henan province: New plants being constructed by Kasai Kogyo, NHK, Hitachi Chemical and Unipres, new plants in operation for NTN and Tachi-S

NTN Corporation: A new bearing plant operating in Luoyang

 In June 2012, operation started at NTN's joint venture company in Luoyang, NTN-LYC (Luoyang) Bearing Corp., manufacturing second- and third-generation hub bearings and needle roller bearings for automakers in Luoyang. The new company, capitalized at US$73.8 million, was established in January 2011 jointly on the fifty-fifty basis with Luoyang LYC Bearing Co., Ltd., a leading bearing manufacturer in China. Operation started initially with less than 100 employees with plans to increase the number to 600 employees in 2015 and a sales goal of 7 to 8 billion yen.

Kasai Kogyo Co., Ltd.: Building an automotive interior trim parts plant in Kaifeng

 In January 2012, Kasai Kogyo established a manufacturing subsidiary, Kaifeng Kasai Automotive Interior Trim Parts Co., Ltd. The new plant is to start operation at the end of 2013 manufacturing door trims and other interior trim parts for Nissan's local plants. The plant has annual capacity for 150,000 to 200,000 vehicles and the company expects sales revenue of 240 million yuan for the fiscal year ending March 2015.
 The new company, capitalized at 750 million yen (total investment 900 million yen), is 10% owned by Kasai Kogyo, 50% by Guangzhou Kasai Automotive Interior Trim Parts Co., Ltd, and 40% by Hainan Junda Ornament Co., Ltd. It is Kasai Kogyo's third plant in China after the plants in Canton province (Guangzhou) and Anhui province.

Calsonic Kansei Corporation: Expanding existing plant in Zhengzhou

 Calsonic Kansei's Guangzhou subsidiary, Calsonic Kansei (Guangzhou) Corporation, is expanding its Zhengzhou branch plant in Henan province, Calsonic Kansei (Guangzhou) Corporation Branch Zhengzhou Plant, as well as the Xiangyang plant in Hubei province to double sales revenues in China. As of April 2012, the company is constructing new plant buildings and installing additional lines.
The Zhengzhou branch plant began operation in 2010 and is manufacturing cockpit modules, front-end modules, etc., for Zhengzhou Nissan Automobile Co., Ltd.。

Kinugawa Rubber Industrial Co., Ltd.: Building a new satellite plant in Zhengzhou for start of operation in 2013

 In April 2012, Kinugawa Rubber announced plans to build a new satellite plant in Zhengzhou city. The new plant is to start operation in 2013 manufacturing automotive rubber seals for Dongfeng Nissan Passenger Vehicle's Zhengzhou branch plant and Zhengzhou Nissan Automobile. The plant will eventually manufacture molded parts as well. Total investment in the new plant construction is said to be over 1 billion yen.
 The company has also established a wholly-owned manufacturing subsidiary in the Jiujiang district of Wuhu city in Anhui province, Kinugawa Rubber (Wuhu) Co., Ltd. The new plant is to start operation in August 2012 manufacturing rubber and synthetic resin parts primarily consisting of automotive seals and rubber insulators for Chery Automobile and other automakers.

Note: As of July 2012, Kinugawa Rubber is considering building a supply facility for Nissan's Dalian passenger car plant being built.

Tachi-S Co., Ltd.: A joint venture company for producing automotive seats starts operation in Zhengzhou

 In April 2011, an automotive seat manufacturing company in which Tachi-S has 50% equity, Zhengzhou Taixin Interia Co., Ltd. , established a new company, Zhengzhou Lear DFM Taixin Automotive Seating Co., Ltd., jointly with Lear DFM Automotive Seating Co., Ltd. which is owned on equal basis by Dongfeng Motor Group and Lear Corporation. The new company began operation in March 2012 manufacturing automotive seats for Zhengzhou Nissan Automobile and Dongfeng Nissan Passenger Vehicle's Zhengzhou branch plant (including the Venucia-branded cars).
 The new company is capitalized at 50 million yuan (49% owned by Zhengzhou Taixin Interia Co., Ltd. , 51% by Lear Dongfeng Automotive Seating Co., Ltd. ) and has initial annual capacity for 120,000 vehicle sets, The company expects sales revenue of 340 million yuan for FY2013.

NHK Spring Co., Ltd.: A new seat manufacturing subsidiary established in Zhengzhou

 In December 2011, NHK Spring established a manufacturing subsidiary, NHK Seat (Zhengzhou) Co., Ltd., to start operation in February 2014 with 114 employees manufacturing automotive seats. The subsidiary is capitalized at 82 million yuan (total investment 146 million yuan) with sales target of 506 million yuan in 2015.

Hitachi Chemical Co., Ltd.: A plastic molding company established in Zhengzhou

 In May 2011, Hitachi Chemical established a wholly-owned subsidiary, Hitachi Chemical (Zhengzhou) Co., Ltd. to start operation in January 2014. The new plant will manufacture automotive interior and exterior molded parts and will increase the number of employees to 220 for full operation. The company is capitalized at US$23 million (total investment 1.9 billion yen).

Fuji Kiko Co., Ltd.: Building a joint venture plant for shifters and engine drive components in Zhengzhou

 Fuji Kiko plans to establish a joint venture company, Zhengzhou Jofu Auto Parts Co., Ltd., in Zhengzhou city in November 2012 (announced in March 2012). The new plant will start operation in August 2013 manufacturing shifters and engine drive components for Japanese and other local automakers. The new company will be capitalized at US$2.5 million (67% by Fuji Kiko, 33% by Taiwan Joyu-Fuji Machinery Co., Ltd.) with expected Annual sales revenue of 10 million yuan for 2013 and 100 million yuan for 2018.

Unipres Corporation: An automotive pressed parts manufacturing subsidiary established in Zhengzhou

 In March 2012, Unipres established a wholly-owned subsidiary, Unipres Zhengzhou Corp., capitalized at US$20 million (total investment 5 billion yen). The new plant is to start operation in August 2013 manufacturing automotive pressed parts for Zhengzhou Nissan Automobile and other automakers operating in Henan province. The new plant will start with about 200 employees and sales revenue of 14 billion yen is expected for FY2014. The company plans to install a large-size transfer press (3,000-ton class TRF) in the new plant.

Note: As of May 2012, Unipres has already installed 2,000-ton, 2,500-ton, and 3,000-ton class large transfer presses in two subsidiaries located nearby in Guangzhou (Unipres Guangzhou Corp. and Unipres Precision Guangzhou Corp.).


Central China - Hunan province: New plants being built by Pacific Industrial and Futaba Industrial in Changsha

Pacific Industrial Co., Ltd.: A joint venture company established in Changsha for manufacturing pressed parts

 In November 2011, Pacific Industrial established a joint venture company, Changsha Pacific Hanya Auto Parts Co., Ltd., jointly with Hanya Seisakusho and other companies to manufacture automotive pressed parts. A new plant construction is to start in FY2013 and will have integrated manufacturing facility for automotive pressed parts. The new company, capitalized at US$1.8 million (total investment approximately 2 to 3 billion yen), is 47% owned by Pacific Industrial Group, 47% by Hanya Seisakusho, and 6% by Metal One Corporation.
  Prior to the new plant construction, the joint venture company will start preparing an automotive parts welding facility in a leased plant. The company will receive supply of pressed component parts from one of the group's existing plants in Tianjin and weld and assemble them for shipping to Mitsubishi Motors' new joint plant in Changsha. Pacific Industrial group has received orders from Mitsubishi Motors for pressed parts (about 50 different items) that will be used in the first model production of Mitsubishi's new joint plant.

Futaba Industrial Co., Ltd.: A muffler and exhaust system manufacturing subsidiary established in Changsha

 In January 2012, Futaba Industrial established a wholly-owned manufacturing subsidiary, Changsha Futaba Auto Parts Co., Ltd., in Changsha city (Changsha Economic and Technical Development Zone). The new plant is to start operation in August 2012 manufacturing mufflers, exhaust systems, fuel tanks, instrument panels, bumpers, etc. Products will be delivered primarily to Mitsubishi 's Changsha new plant.
 The subsidiary, capitalized at 1 billion yen, has a 5,400 square meter-plant structure and 87 employees. The number will be increased to 110 by the end of 2012.



Southwestern China - Chongqing city, Sichuan province: Furukawa strengthening local production, Shoda Seisakusho increasing production

Furukawa Electric Co., Ltd.: A wire harness manufacturer in Chongqing now a subsidiary of Furukawa group

 In June 2011, Furukawa Electric bought 15% of equity interest of an affiliated wire harness manufacturing company, Chongqing Changhua Automobile Harness Co., Ltd., from a joint venture partner, Chongqing Changan Automobile Electrics Co., Ltd., to raise Furukawa Electric Group's equity ratio from 50% to 65% and acquire the wire harness company as a new subsidiary. The subsidiary has 342 employees (as of December 2010) and registered sales revenue of 65 million yuan for FY2010.
 Furukawa Electric intends to expand the subsidiary's trade market from central China region to southwestern China region as well including Chongqing city and Sichuan province, and increase its sales in China by selling products not only to Japanese automakers but to other local manufacturers alike.
 In 2010, Furukawa Electric established Furukawa Automotive Systems Design & Management Co., Ltd. ("FACD") in Tianjin. The new company, engaged in the design, development and marketing of automotive wire harness, has eight employees as of December 2010. It is capitalized at 90 million yen and 60% owned by Furukawa Electric, 40% by Furukawa AS.

Shoda Seisakusho Co., Ltd.: Automotive shaft production capacity at Chengdu plant increased by 10 percent

 In February 2012, Shoda Seisakusho disclosed plans to increase production capacity by 10 percent to 3.30 million steering shaft components at its manufacturing subsidiary in Chengdu city, Chengdu Shoda Auto Parts Co., Ltd., to meet growing demand among Japanese tier-one suppliers in China. The number of employees will be increased from 75 to 90. Shoda will fabricate cold metal forming machines (2 to 3 hydraulic machines) for internal use at the new plant. Other than the machines manufactured in Japan, the plant will install 6 to 7 NC lathes and a broaching machine that are all manufactured locally in China to suppress total investment in equipment to less than half the normal cost.

Mabuchi Motor Co., Ltd.: A branch office established in Chongqing for a Shanghai-based sales company

 In November 2011, Mabuchi Motor established a sales branch in Chongqing, Mabuchi Motor (Shanghai) Co., Ltd. Chongqing Branch, of its sales subsidiary in Shanghai, Mabuchi Motor (Shanghai) Co., Ltd. The fourth of sales branches after Hong Kong, Shanghai, and Shenzhen, will start operation within 2012 (currently conducting test sales as of April 2012).
 In May 2011, Mabuchi Motor's subsidiary in Hong Kong established a manufacturing subsidiary in Ganzhou city, Jiangxi province, Mabuchi Motor (Jiangxi) Co., Ltd. New plant construction work is to complete in October 2012 and test production of small automotive motors is to start in this November. Volume production is expected to start in 2014 with 130 million motors a year and an output of over 700 million yuan. The annual capacity at Mabuchi Motor's Yingtan plant in Jiangxi province, Mabuchi Motor (Yingtan) Co., Ltd., will be doubled when the second phase of the plant construction work is completed within 2012.

Source: Press Releases of the above companies, news reports and hearing survey

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