Japanese suppliers urged to invest in India

Respond to Japanese OEM's initiatives to meet increased production for model launches

2013/09/02

Summary

Japanese OEM's bases in India
Japanese OEM's bases in India

  This report describes recent trends among Japanese parts suppliers in India (covering the nine-month period up to the beginning of August 2013). Indian auto industry registered a single-digit growth in 2012, as it did in 2011, with auto production at 4.14 million units (up 5.3% year over year) and vehicle sales at 3.59 million units (up 8.9% y/y). The monthly vehicle sales in the period from January to July 2013 shrank 6 to 15% compared to the same period a year earlier due to the high interest rates and fuel prices. As a result, some Japanese parts suppliers in India are running their plants at low operating ratios. Nevertheless, auto manufacturers have medium-range plans to increase production that are urging Japanese parts suppliers to start operating in India or continue to invest in increasing their production capacities there.Their investments are taking place in northern states (Haryana, Rajasthan, Uttar Pradesh, etc.), southern states (Tamil Nadu, Karnataka, Andhra Pradesh, etc.) and western states (Maharashtra, etc.).


Japanese Suppliers Related Reports:

  Chinese Northern/ Northeastern/ Southwestern Regions (Aug. 2013),
  Southern and Central China (Aug. 2013),
  Eastern China Region (Jul. 2013),

  U.S (Jul. 2013), Mexico and Brazil (Jun. 2013), Thailand (Apr. 2013),
  South East Asia (Mar. 2013), Russia and Eastern Europe (Jan. 2013)



Building production or sales bases in India

Aisin Takaoka Co., Ltd.: To start its first local plant in 2014

 Aisin Takaoka will have its first plant in India completed during 2014. The new plant will specialize in machining the braking components including brake disk rotors and driving system components such as differential cases. The plant will have an integrated production line from casting to final machining. The company will install a compact casting line with an annual capacity of 700 tons, about one fourth that of the conventional lines, to increase the operation rate. The new line will help reduce the instalment period to half a year or so as well as l requiring only about one fourth the investment required to build the conventional line (JPY 2.5 to 3 billion). The plant will be built in Bangalore, Karnataka. It has been reported that the new plant may be built on the ground leased by Toyota Tsusho.

Akebono Brake Industry Co., Ltd.: Decision reached to shelve the advancing plan to India

 Akebono Brake Industry has decided to shelve its plan to advance to India  The company judged that the growing market tends to be low-price oriented which makes it hard to profit from automotive brakes. The same decision applies to the planned export to India from its production bases in Thailand and Indonesia. In the meantime, the company will expedite beefing up its operations in North America and Asia (reported on May 17, 2013).

Oiles Corporation: Starts production of bearings at a new production site in April 2013

 Oiles Corporation plans to increase production of automotive bearings in 2013 in four countries including India and China. The company will invest JPY 3 billion in total in the four countries in the fiscal year (FY) 2012-13. As far as India is concerned, the new plant was completed in October 2012 by Oiles India Private Limited in Guargaon, Haryana, and started production in April 2013. The plant produces OILES bearing which is a type of sliding bearings.

Kasai Kogyo Co., Ltd.: Holds a opening ceremony of a JV for interior components in February 2013

 In February 2012, Kasai Kogyo established a joint-venture company in India, Antolin Kasai Tek Chennai Private Limited in Chennai, Tamil Nadu It was capitalized at JPY1.2 billion. It is a 50-50 joint venture established jointly, with Grupo Antolin-Irausa, S.A., a leading auto parts supplier in Spain. An opening ceremony was held in February 2013 to mark the start of operations of the new plant. The JV produces and sells door trims and other interior parts primarily to the Renault-Nissan alliance. The company plans to achieve JPY 1.13 billion in sales in FY 2014.

Kinugawa Rubber Industrial Co., Ltd.: Establishes an Indian subsidiary to manufacture automotive body seals and hoses

 In December 2012, Kinugawa Rubber Industrial established an Indian corporation, Kinugawa Rubber India Private Limited in Tamil Nadu. The new plant is to start production of auto body seals and hoses in July 2013 initially for use on Nissan's Datsun to be launched in 2014. The company plans to sell over JPY 1 billion worth of parts in FY 2015. Kinugawa Rubber Industrial will explore the possibility of local procurement in FY 2013. The company will outsource hose parts to Hwaseung Hsi Automotive in Tamil Nadu, an Indian subsidiary of the company's Korean partner, Hwaseung R&A.

Clarion Co., Ltd.: Establishes a new company for marketing car audio and car navigation systems in India

In April 2013, Clarion established a sales company, Clarion India Private Limited in New Delhi. Capitalized at JPY 600 million, the new company sells car audio, car navigation and other Clarion-branded items imported from a Thai subsidiary. It also provides technical support for automotive manufacturers and conducts marketing as well to gain explore new customers for its OEM items and aftermarket items. The company plans to achieve JPY 1 billion in sales in the first year of operation and eyes local production in the future.

JATCO: Set India as one of the candidate production bases for CVT

 JATCO has set a goal to increase its overseas production ratio to 72% by March 2019. The company is increasing its production capacities in China and Mexico as well as  building a plant in Thailand to achieve that goal. It is also conducting feasibility studies for producing CVT in other countries including Brazil, India, Indonesia and Russia. The final decision will be made before the end of 2013 and production in a selected country will start by the end of March 2019.

Sumitomo Rubber Industries, Ltd.: Establishes a tire sales company in India

 In August 2012, Sumitomo Rubber Industries announced plans to establish an Indian sales company, Falken Tyre India Private Limited in Gurgaon, Haryanan. The plant is adjacent to the southwestern part of New Delhi and  is to start operation in April 2013.  The plant will contribute to achieving the company’s goal of promoting tire sales in the aftermarket in India as part of its global development initiative. The company also plans to increase its tire production capacity globally by 70% in 2020  from the 2012 level and is considering building a own plant in India.

Daiichi Kogyo Co., Ltd.: Establishes a new company for producing fasteners

 In November 2012, Daiichi Kogyo established an Indian company, Daiichi Kogyo Co., Ltd. - India Plant in Rajasthan, for manufacturing fasteners for transport machinery use. The new plant began operating in June 2013 at the cost of JPY 1.5 billion. The plant will supply wheel nuts and other automotive fasteners for Maruti Suzuki India, Ltd. The plant is designed after similar plants in Japan featuring an integrated production line from raw material to post-molding heat treatment. The company may build a second plant if necessary to meet local demand among Japanese and other OEMs in India. Daiichi Kogyo's future plans include expanding production to suspension and engine-related parts as well.

TS Tech Co., Ltd.: Decision made to build a new plant for making seats and other automotive components and supply them to Honda's second plant starting in February 2014

 In August 2013, TS Tech announced the resumption of construction work of TS Tech Sun Rajasthan Pvt. Ltd.'s new plant in Rajasthan for manufacturing automotive seats and door trims.  The construction had been postponed due to the global financial crisis in 2008. The decision was made to supply products to Honda's second plant (with annual capacity of 120,000 automobiles) located in the same state that is to start production in 2014. The new plant is scheduled to start operations in February 2014.

TBK Co., Ltd.: New plant for making parts for commercial vehicles in operation since September 2012

 TBK is set to increase its production capacities in Asia to meet growing demand for parts for commercial vehicles. TBK India Private Ltd.'s new plant in Maharashtra that started operation in September 2012. The plant is producing water pumps and oil pumps for heavy-duty trucks. The company plans to expand its sales to heavy-duty truck manufacturers in India and in Europe with the initial goal of achieving JPY 500 million in sales  in FY 2012 and JPY 3 billion in FY 2015. TBK also invests JPY 800 million each in its production bases in Thailand and China within FY2012 to increase production capacities.

T. Rad Co., Ltd.: Producing EGR coolers in India

 T. Rad will increase its global production capacity for exhaust gas recirculation (EGR) coolers in FY 2017 by 1.8 folds from the FY 2013 level. To achieve this goal, T. Rad will increase capacities in Japan, North America, Europe and Thailand by from 1.5 times to more than 2.0 times. The company also has plans to start production in India in the FY 2016 and in China in FY 2017.

Marubeni Corporation: Produces raw material for tires since June 2013

 In June 2013, Marubeni's joint-venture company in India, Indian Synthetic Rubber Limited in Haryana began producing styrene-butadiene rubber (SBR), a raw material for making tires. The company plans to start full-capacity production at 120,000 tons in 2014. The SBR import is increasing in India in pace with the increased tire production. Tire manufacturers have to keep a large stock as SBR procurement is a time-consuming operation. Therefore, they are in a hurry to construct local supply bases in India. Marubeni's decision reflects such a market condition. The joint-venture company is owned 50% by the Indian Oil Corporation, 30% by TSRC, a Taiwanese synthetic rubber manufacturer, and 20% by Marubeni.

Yamashita Rubber Co., Ltd.: Produces anti-vibration rubber parts at the new plant since May 2013

 The new plant  of Y-Tec India Pvt. Ltd. in Rajasthan was completed in March 2013 and the plant began producing automotive anti-vibration rubber parts in May 2013. Products are supplied to Honda's plant in India and Maruti Suzuki and other Japanese manufacturers in India.

 

 



Increasing production capacities, expanding product items

Aisan Industry Co., Ltd.: Second plant to produce engine functional parts starting in 2014

 Aisan is building a second plant in India in Chennai in the southern state of Tamil Nadu to produce fuel pump modules and throttle bodies starting in 2014. The plant's annual capacity is initially set at approximately 100,000 units for each item. Products will be supplied to Toyota and other Japanese automakers that have increased capacity of their engine plants.

H-One Co., Ltd.: Installing a trial press to increase the die fabricating capacity by 50%

 H-One is expanding the existing plant at H-One India PVT., Ltd. in Uttar Pradesh to install a trial die-fabricating press machine in 2013. The company conventionally uses a production press machine for testing and is now installing a trial press machine to increase the plant's annual die fabricating capacity from 80 to 120 die molds. This is to meet the growing demand for automobile framework parts by Honda. The press machine marks the company's first procurement from an Indian manufacturer, ISGEC. The decision was made because buying a press machine from Japan would take extra time and an Indian machine is cheaper.

Exedy Corporation: Building a third plant dedicated to producing clutches for motorcycles and automobiles equipped with manual transmission

 Exedy built a third plant at Exedy Clutch India Private Limited in Bangalore, Karnataka, in FY 2012 with the total investment of approximately JPY 10 billion. The plant will initially produce clutches for motorcycles. Starting in January 2014, the plant will also produce abrasives used in clutches for automobiles with manual transmissions. The company will also start production and sales of clutches for automobiles with manual transmissions.

Keihin Corporation: Production of injectors for CNG transferred entirely to the Indian plant with production capacity increased to one million pieces

 Starting in July 2012, Keihin produces all-new injectors for vehicles powered by compressed natural gas (CNG) at Keihin Panalfa Pvt. Ltd. in Uttar Pradesh.  The plant previously produced automotive air conditioning systems.  The new injectors are intended for vehicles with annual quantity of about 100,000 sets. They are used on Maruti Suzuki’s Maruti 800 CNG-fueled vehicles. Keihin transfers the most-advanced production equipment from Japan in the summer of 2013, after which production of the injectors will be entirely shifted from Japan to India. The decision has been made to reduce production cost by producing close to its main customer. Keihin will also use the injectors from India for Honda’s CNG-fueled vehicles which are sold in North America and elsewhere. Keihin won orders in 2011 from Daimler for injectors used on its CNG-fueled vehicles, and won the first order in 2012 from General Motors for gas injectors for its CNG-fueled vehicles. All orders will be supplied from India. The company plans to increase annual capacity to at least one million injectors in the near future.

Koito Manufacturing Co., Ltd.: Second plant in the southern Chennai in operation since March 2013 to meet increasing demand for headlamps

 Koito built a second plant in the premises of India Japan Lighting Private Limited's Chennai plant in Tamil Nadu. The new plant began production in March 2013 to meet growing demand for headlamps among Japanese OEMs in southern India that are increasing their vehicle production. Aside from headlamps, the first plant is producing the increased portion of orders for rear combination lamps. Koito's annual production capacity was increased by 50% to 1.5 million sets between the two plants. The total investment amounted to JPY 1 billion.

Sanoh Industrial Co., Ltd.: To build tow plants in India by March 2016

 In its medium-term business plan (March 2014 to March 2016), Sanoh Industrial is to build new plants for making automotive tubular parts in ten locations including China, India, Russia, Mexico and two other emerging countries. The company will spend approximately JPY 10 billion in total to build plants for bending and assembling tubular parts with annual capacities ranging from 100,000 to 200,000 sets. Sanoh will build two plants in India to supply products to Nissan and other automakers there. The company plans to achieve JPY 120 billion sales in consolidated revenues for the fiscal year ending in March 2016, up 30% from the level of the fiscal year ending March 2013.

G-TEKT Corporation: To export automotive frame components from India to Thailand

 G-TEKT is to start exporting automotive frame components by the fall of 2013 from G-TEKT India Private Ltd. in Rajasthan to Thailand. The company is currently building its second plant in southern Thailand with plans to start production in 2014. Automobile production by Japanese OEMs in Thailand is increasing rapidly to the level more than the company can supply. G-TEKT has decided to produce necessary quantities at its plant in India where the press machine is working at low operating ratios. This tentative measure will continue for a year or two.

Showa Corporation: May build a new plant in areas other than northern India

Showa has two production companies in northern Haryana. The company produces shock absorbers for motorcycles and automobiles and electric power steering in four plants in total. The company is seeking a site for new plant construction in anticipation of increased demand for parts resulting from increased production of motorcycles and automobiles in southern and western parts of India.

Nippon Steel & Sumitomo Metal Corporation: Integrated manufacturing facility for steel pipe : Production starts in June 2013

 An integrated production facility for automotive pipes was completed in January 2013 at Nippon Steel Pipe India Private Limited in Rajasthan, one of the subsidiaries of Nippon Steel & Sumitomo Metal Corporation (NSSMC). The facility is capable of all stages of piping from pipe-forming to cold drawing, heat treatment and cutting. Material approval was granted by the company's customers and commercial production started in June 2013. The plant has a monthly capacity of about 2,000 tons and products will be supplied to Japanese and other automakers and parts suppliers.

Somic Ishikawa Inc.: Increasing ball-joint production capacities at two plants in southern and northern India

 Somic Ishikawa is increasing the ball-joint production capacity of Somic ZF Components Ltd. in Haryana. It is  a joint-venture company co-established with a German company, ZF Friedrichshafen AG. The company will install additional equipment at the Chennai plant in Tamil Nadu to increase its capacity by 30 to 40% before the end of 2013. The company will also build a new plant after acquiring a construction site adjacent to the Gurgaon plant in Haryana in 2014 to increase the plant's capacity by 10 to 20%. These capacity enhancement has been decided to prepare for increased vehicle production among auto manufacturers.

Denso Corporation: Investing in an Indian parts supplier to expand its meter business

 In April 2013, Denso invested JPY 1 billion to expand its meter business and acquired a 51% stake in Pricol Components Limited in Tamil Nadu. Pricol Components is one of the subsidiaries of Pricol Limited, a leading manufacturer of automotive meters in India. The subsidiary is engaged in designing, manufacturing and selling meters for passenger cars, and became Denso’s new consolidated subsidiary. Concurrently, Denso sold all of its Pricol Limited shares. Pricol Components has plants in southern India (Tamil Nadu) and northern India (Haryana), so Denso’s meter business now can cover both regions. The subsidiary’s name will be changed to Denso Pricol India Limited in the near future.

Toyota Industries Corporation: To start Diesel engine production for Toyota in 2016

 Toyota Industries will start production of diesel engines at Kirloskar Toyota Textile Machinery Pvt. Ltd. in Bangalore, Karnataka, in April 2016. Toward this plan, the company will build a plant structure in the premises of the existing plant and install assembling and machining lines with an annual capacity of 108,000 vehicles. The diesel engines are developed for the IMV, Toyota's strategic model for emerging markets, and likely to have 2500 to 3000cc displacement. Toyota Industries will invest JPY 15 billion.

NHK Spring Co., Ltd.: A joint-venture company established for producing seats starting in December 2013

In February 2013, NHK Spring established its first seat manufacturing joint-venture company in India, NHK F. Krishna India Automotive Seating Private Limited in Chennai, Tamil Nadu. The new JV company is capitalized at JPY 378 million: NHK Spring, Krishna, and Faurecia own 51%, 39% and 19%respectively. The company is to start production in December 2013 and supply seats for low-priced vehicles at Renault-Nissan alliance’s plant in India. NHK Spring aims to achieve a sales of INR 1.23 billion in FY 2015.

Nippon Piston Ring Co., Ltd.: New valve seat manufacturing company in operation

Nippon Spring’s manufacturing company in India, NPR Manufacturing India Private Limited, began operating in July 2013. (in Chennai, Tamil Nadu, capitalized at JPY 1.1 billion). The company invested JPY 1.8 billion in the plant which produces sintered valve seats that are key parts of engines. The company plans to produce approximately 3 million units a month in 2015.

Piolax, Inc.: Procuring resins in India to make fasteners for existing and new customers

 Piolax is making resin fasteners at the new plant established by Piolax India Private Limited in Andhra Pradesh that began operation in September 2012. The fasteners are supplied to Nissan, Honda and Suzuki. A new order was granted in 2013 for open/close mechanical parts from Hyundai Motor Company for its plant in India. This is expected to increase the plant's operating ratio.
 Starting in 2013, Piolax is procuring resins for making fasteners from local sources in India to lower the material cost by using cheap material. Concurrently, the company will export resin fasteners from India to Japan thereby achieving 40 to 50% cost reduction  from when they use Japanese resins. Piolax has set a goal to increase the procurement ratio from outside Japan from a single-digit to 20%.

Hitachi Metals, Ltd.: To build business foundation for suspension parts: A technical and business agreement concluded with two local companies in India

  In February 2013, Hitachi Metals and its affiliated company, Nam Yang Metals Co., Ltd., announced that they had concluded a technical and business collaboration agreement for automotive casting products with local partners. The local partners: RPS Vikas Castings Pvt. Ltd. in New Delhi and Garima Vikas Metals Pvt. Ltd. in Rajasthan, are both belonging to the Vikas group in India.  These two companies have a firm customer base with Japanese, American and European automakers in addition to those in India.  This agreement will help Hitachi Metals accelerate its entry into Indian markets. The company began technical assistance for the Vikas group in February 2013 to establish a consigned production system for suspension parts that require advanced technologies. Hitachi Metals has set a goal to achieve sales of JPY 2 billion in the FY 2016.

Bridgestone Corporation: Establishes a second tire production base in January 2013

 Bridgestone's Pune plant at Bridgestone India Private Ltd. in Maharashtra was completed in January 2013 and started producing radial tires for passenger cars (PSR). Production of radial tires for trucks and buses (TBR)will start in October. The plant's daily capacity is set at 10,000 PSR tires at the end of 2014 and 3,000 TBR tires in the second half of 2017. The Pune plant is the company's second production base in India, next to the Indore plant located in Madhya Pradesh. The total investment is JPY 50 billion.

Furukawa Electric Co., Ltd.: To produce steering roll connectors at the end of 2013

  At the end of 2013, Furukawa Electric will start production of steering roll connectors (SRC) that are an integral part of airbag systems, at Minda Furukawa Electric Private Limited in Haryana.  Wire harnesses and electric devices have been produced at the plant. India is encouraging the use of airbags in all new vehicles by the FY 2014 and the company has decided to make SRC locally in India. Production will start with an annual capacity of 600,000 units. Furukawa Electric will increase the capacity in phases and promote in-house production of component parts locally in India.

Yazaki Corporation: A joint-venture company converted into a wholly-owned subsidiary

 In November 2012, Yazaki announced the decision to convert its wire harness manufacturing and sales company, Tata Yazaki AutoComp Limited in Maharashtra, into a wholly-owned subsidiary. The company purchased all shares held by the joint-venture partner, Tata AutoComp Systems Limited, and changed the subsidiary's name to Yazaki India Limited in 2013. Yazaki will build a whole-new management structure needed topromote manufacturing and sales further.

 

 



Constructing and enhancing development capabilities in India

Calsonic Kansei Corporation: An engineering center established in partnership with a local company

 In March 2013, Calsonic Kansei announced that a joint development agreement for automotive heat exchangers had been concluded with Larsen & Toubro's Integrated Engineering Services. The two companies established Calsonic Kansei Engineering Center India-L&T in Chennai, Tamil Nadu. The Center will be responsible for localization of product specifications so that designing, analyzing and parts procurement can be completed locally. It will be developed to a global engineering center in five years from now.

Source: Press releases and newspapers

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