Future plans of Japanese suppliers in U.S.
Denso, Koito, Nippon Steel & Sumitomo Metal and others react to OEM expansions
This report summarizes activities of Japanese parts suppliers in the U.S. and Canada in the nine months to mid-March 2014, including enhancement of production capacities and production of new items. Steady car sales continue in the U.S., and the automobile industry expects the 2014 year-round volume to exceed the 16 million-unit level. Each Japanese automaker plans aggressive enhancement of their production capabilities in North America. Following automakers' movements, Japanese parts suppliers are also enhancing their production capabilities.
Related Japanese Supplier Reports:
* China (part 2): Northern, Northeastern & Southern regions (Mar. 2014),
China (part 1): Eastern and Central China (Mar. 2014)
* Latin America (Part 2): Trends in Brazil and Mexico (Mar. 2014),
Latin America (part 1): New plants in Mexico (Mar. 2014),
* Thailand (Part 1) (Jan. 2014), Thailand (Part 2) (Jan. 2014),
ASEAN (Nov. 2013)
* Russia and Eastern Europe (Oct. 2013),
India (Sep. 2013), the U.S. (Jul. 2013)
Highlights of Japanese suppliers' movements in U.S.
Car sales volume in the U.S. recovered to 15.6 million units in 2013, up 7.6% year-over-year (y/y). Steady sales continue, despite some influence of cold waves, and the automobile industry expects the 2014 year-round volume to exceed the 16 million-unit level. The automobile production in the U.S. has also expanded and the 2013 volume marked a y/y increase of 7.2% to 10.79 million units. In January 2014, the volume increased by 0.6% y/y to 876,000 units. In 2013, production volume by Japanese automakers in the U.S. increased steadily by 9.1% y/y to 3.63 million units.
In the medium term, each Japanese automaker plans aggressive enhancement of their production capabilities in North America. In 2013, Toyota expanded production capacities at its three plants. The automaker plans to further increase production or introduce new production lines at its four plants in 2014. Honda aims to produce almost all of its U.S. market models, excluding hybrid vehicles (HVs), in North America. Nissan plans to produce 85% of its U.S. market models in North America in 2015.
To cope with these movements, Japanese parts suppliers are also enhancing their production capabilities. Koito Manufacturing will increase its annual production capacities of head and rear lamps for1 million vehicles by March 2014 at its two U.S. plants. Akebono Brake will enhance its brake production capacities by 50 %from the 2010 level at its four U.S. plants .by 2016.Most of these enhancements by Japanese suppliers are being made to cope with production increase or new orders for parts used on new models by/from their existing Japanese and U.S. customers. Meanwhile, some suppliers have received orders also from new customers, like FCC (from Chrysler) and Toyota Gosei (from GM and Ford).
Some automakers have shifted production to the U.S. for the parts which were previously exported from Japan. This shift has been observed for lightweight and more fuel-efficient parts which are in compliance with tighter fuel consumption regulations. Other shifted parts are related to HVs and electric vehicles (EVs) whose full-scale production started in the U.S. (see the table below):
|Fields||Suppliers||Newly produced items|
|Weight reduction, fuel efficiency improvement||F.C.C.||Paper-based friction materials (production transferred from Japan)|
|Keihin||Injectors for direct injection engine|
|G-Tekt||Hot stamping parts utilizing a new weight reduction technology|
|Pacific Industrial||Body frame components made of ultra-high-tensile steel plates|
|Topy Industries||Passenger car steel wheels featuring rims with uneven thickness|
|Mitsui Mining & Smelting||Catalysts for automotive and general-purpose engines|
|Mitsubishi Heavy Industries||Turbo chargers for passenger cars|
|UACJ, Constellium||Aluminum materials for body panels|
|HVs, EVs||Denso||Inverters for hybrid systems, Standardized HVACs for automotive air conditioners|
|Panasonic, Tesla Motors||Large-scale battery plant for EVs (planned)|
|Mitsui High-tec||Motor cores for hybrid and other vehicles (under consideration)|
|Others||Seiren||High value-added synthetic leather for interiors (under consideration)|
|Daido Kogyo||Automotive engine chains|
|Nippon Seiki||Head-up displays|
|Mitsubishi Electric||High-efficiency alternator motor controller units|
Enhancement of U.S. plants by Akebono Brake, F.C.C.
Enhances production capacity of friction materials for ATsIn July 2013, Aisin Chemical added a production line of wet friction materials for automatic transmissions (ATs) at Aisin Chemical Indiana, LLC. This line increased the plant's monthly production by 300,000 sheets to 1.2 million sheets. The enhancement was made to cope with AT production increase by its customers, Aisin AW and Toyota. Through this enhancement, Aisin expects its revenue to increase by 25% y/y to JPY 5 billion in the fiscal year ending in March 2014 (FY 2013).
To increase brake production capacity in North America by 50 % by 2016By 2016, Akebono Brake plans to enhance its brake production capacities by 50 % from the 2010 level at its four plants at Akebono Brake Corporation in Kentucky. A similar enhancement will also be made on its capacity to produce friction materials. The supplier will invest JPY 15 billion to JPY 20 billion in the three years from FY 2014.
|At its Clarksville plant in Tennessee, Akebono will introduce ferritic nitro-carburizing (FNC) equipment to improve corrosion resistance of rotors. Production line at this plant will also be modified to enable high-mix low-volume production. In Kentucky, the Elizabethtown plant will streamline its production system for disk and drum brakes and the Glasgow plant will introduce new production equipment for friction materials. At the Columbia plant in South Carolina, facilities will newly be introduced or updated for full production of brakes which will be shipped to Europe.|
|These enhancements are expected to increase Akebono's operating profit in its North American business by 7.9 times to JPY 5.5 billion in FY 2015 from the FY 2013 outlook. Its largest customer is GM, surpassing Japanese automakers like Toyota and Nissan. Akebono has received new orders from GM for brakes used on global platform vehicles. The supply will start in autumn 2014.|
|Imasen Electric Industrial||
To enhance seat adjuster production facilities at its two plantsImasen Electric Industrial will invest JPY 1.7 billion within FY 2013 to enhance its production capacity of automotive seat adjusters in the U.S. In its Ohio plant at Imasen Bucyrus Technology Inc., JPY 1.3 billion will be invested to increase its capacity for Honda and Fuji Heavy Industries (owner of Subaru). At its Tennessee plant, building and production equipment will be enhanced with an investment of JPY 400 million to supply parts fornew model of Nissan.
Transfers production of paper-based friction materials from Japan to its North Carolina plantIn February 2014, F.C.C. completed construction of a new plant building at FCC (North Carolina), LLC. The supplier transferred production of paper-based friction materials from its Ryuyo plant in Japan to this plant. The transfer was made to avoid a high tsunami risk in Japan. This is F.C.C.'s first overseas production of this product. Through local procurement in North America, the supplier also expects to reduce production costs.
|Having Honda and Ford as its main customers in North America, F.C.C. received first orders from Chrysler for finished AT clutches and other parts in 2013. Clutches are assembled at FCC (INDIANA), LLC while friction and core plates are produced at FCC (North Carolina), LLC. Aluminum die-cast parts are produced at FCC (Adams), LLC in Indiana. F.C.C. received orders also from ZF Transmissions Gray Court, LLC in South Carolina for AT clutches and disk sets. To cope with the new orders, new production lines were established at the above three plants, which went into production in May 2013. The supplier expects sales from ZF to reach JPY 7 billion in FY 2016.|
To start producing suspension parts for GM in U.S. and other countries by 2017F-Tech plans to start producing suspension parts in the U.S., China, Mexico, and Canada by 2017, winning new order from GM. In addition to orders for GM's global models, the supplier has also received new orders for other models. The company is receiving more orders as it is enhancing its development capability by improving simulation technologies in Japan and the U.S. Its highly-regarded quality has also contributed to this increase. F-Tech has two manufacturing subsidiaries in the U.S. and Canada, respectively.
Enhances bearing production capacityIn August 2013, Oiles completed the expansion work of a building at its North Carolina plant at Oiles America Corporation. The building was expanded from 7,180 square meters to 11,664 square meters. The expansion was made to cope with new orders for bearings used in exhaust, suspension, and steering components. An increase in supplies to existing customers is also covered by this expansion. Oiles expects its revenue in North America to increase from JPY 4.8 billion in FY 2013 to JPY 6.2 billion in FY 2014.
Introduces automatic door trim assembly process to its Tennessee plantIn 2013, Kasai Kogyo introduced an automatic assembly process for door trims used on next-generation sports utility vehicles (SUVs) to its Tennessee plant at M-Tek, Inc. In addition to door trims, the supplier has received orders for increased number of items, including headliners and trunk room linings, in the U.S. To promote in-house production of these components, the company is considering enhancement of its production capability.
To start producing injectors for direct injection engines in 2015In 2013, Keihin started producing injectors for direct injection gasoline engines in Japan. Demand for this type of injectors is expected to grow due to a higher need for low emission and stricter fuel efficiency regulations. The supplier will set up a new production line at Keihin IPT Manufacturing, LLC. and start production in 2015. Also in Mexico, a new labor-intensive production line will be installed at Keihin de Mexico S.A. de C.V. in San Luis Potosi. USD 40 million will be invested in North America. Within 2016, its annual production capacity will be expanded to 65 million units, as a total of its plants in Japan and North America.
|Keihin is also establishing a global production network to supply low-cost components for the new Honda Fit. The supplier aims to classify about ten items into "distribution-intensive", "production-intensive", and "labor-intensive" types so that each item will be produced at places with the lowest cost. Half of the total volume of "production-intensive" components (injectors, electronic control units, and heat exchangers) will be produced in Japan and the rest in the U.S. and Thailand.|
Introduces additional production line for general-purpose shock absorbers in FY 2013KYB plans to double its global production/sales volume of general-purpose shock absorbers in 2020 from the 2010 level. As part of its plan, the supplier has enhanced its production capacity in the U.S. in FY 2013. KYB aims to triple its annual production to 1.8 million in FY 2015 from the current level (Source: a press release in November 2013).
To increase annual head lamp production in North America to equivalent of 5 million vehicles in FY 2014Koito Manufacturing will expand the Alabama plant and the Paris plant in Illinois, both owned by North American Lighting, Inc. (NAL), by March 2014. The expansion will increase its annual head lamp production by the equivalent of 1 million vehicles in total. Its new plant in Mexico will also be expanded at the same level by summer 2014. As a whole in North America, its annual production capacity will increase from the equivalent of 3 million vehicles in FY 2013 to the equivalent of 5 million vehicles in FY 2014. Its rear lamp production capacity will also be enhanced by the equivalent of 1 million vehicles per year in the U.S.
|At its mold plant in Indiana, the in-house production ratio of plastic molds will be raised from 15% in 2013 to 25% in 2016. Koito will invest JPY 8 billion in total in these facility enhancements. In its mid-term management plan, the supplier expects the operating profit from its operations in North America to increase by 7.2 times to JPY 8.5 billion in FY 2015 from the FY 2012 level.|
To expand production facilities for valve springs and ring gears within FY 2013Suncall will expand its production facilities in Japan, the U.S., China, and Thailand within FY 2013. The supplier plans to increase its monthly production of engine valve springs by 30% y/y to 13 million units and that of ring gears for engine starters by 20% y/y to 850,000 units. Out of the total investment of JPY 1 billion, JPY 230 million will be invested in Suncall America Inc. in Indiana. These enhancements are being made to cope with production increase by Japanese automakers including Toyota.
To produce hot stamping parts using new weight reduction technology at its new plant; also to consolidate sales and development functionsG-Tekt established G-Tekt North America Corporation (G-NAC) in Ohio in April 2013 and is now constructing a new plant within its premises. This plant will produce hot stamping products using a new weight reduction technology. Additional processing like welding will also be performed at this plant to supply products to Honda plants in the U.S. The plant will go into production in March 2015 with an investment of USD 30 million.
|At G-NAC, an independent sales and research & development center will be established. The research, development, and sales functions were separated from an existing U.S. subsidiary to enhance customer support. For production of hot stamping parts, G-NAC will cooperate with its headquarters in Japan to develop technologies for quality improvement and stable production. Sales of USD 64 million are expected in FY 2016.|
|Nippon Steel & Sumitomo Metal, Sumitomo Corporation||
To add press line for forged crank shaftsIn December 2013, International Crankshaft Inc. (ICI), a joint venture (JV) of Nippon Steel & Sumitomo Metal and Sumitomo Corporation in Kentucky, decided to set up its fourth forging press line. The line is scheduled to go into production in November 2015. The annual production capacity will be increased from the current 2.7 million units, using three press lines, to 4 million units. The supplier will shift from the production method of crank shafts from casting to forging to cope with requests for production increase from Japanese automakers that have started local production. The shift is also a response to demands for smaller and more efficient engines from U.S. automakers.
Considering producing high value-added interior material in U.S.Seiren is considering producing the Quole, a high value-added synthetic leather material for automotive interiors, in the U.S. Its demand is increasing for North American models made by Japanese automakers. If a demand in the leather material at the 200,000-square-meter level is expected per month, the supplier intends to expand a plant, with an additional production line, at its group company in North Carolina, Viscotec Automotive Products, LLC. Seiren has also started considering producing automotive interior materials in Mexico.
To construct its first automotive engine chain plant in U.S.; to start operations in 2014Daido Kogyo will construct an automotive engine chain plant within the premises of its U.S. sales subsidiary in Tennessee, Daido Corporation of America. In addition to motorbike chains and rims and industrial chains, the subsidiary has exported and sold automotive chains since 2012. To start automotive chain business in full scale in the U.S., Daido will newly establish its first plant for automotive engine chains in North America. To this end, the subsidiary' capital was raised by USD 2 million to USD 5 million in October 2013. USD 4.3 million will be invested in the plant construction. The plant is scheduled to go into production in August 2014 with an annual chain production capacity of 950,000 meters. Other related system components will also be produced at this plant. Daido expects revenue of USD 5 million from its automotive operations in 2014 and USD 18 million in 2016.
To develop production capabilities for 1.5 GPa-class body frame componentsFrom FY 2014 to FY 2015, Pacific Industrial will develop capacities for producing high-tensile body frame components of 1.2 to 1.5 GPa-class in Japan, the U.S., and China. In the U.S., the supplier will introduce a 2,500- to 3,000-ton class large press machine at Pacific Manufacturing Ohio Inc. in Ohio to enable processing of ultra-high-tensile steel plates. An integrated production line from stamping to painting will also be set up to enhance its competitiveness. An investment of JPY 2.7 billion is planned in FY 2014 and FY 2015.
To enhance engine bearing production capacityBy FY 2015, Taiho Kogyo will increase its global production capacity of engine bearings by 40% to 40 million units from the FY 2011 level. The supplier has decided to enhance production capabilities in Thailand and Hungary as well as at Taiho Corporation of America in Ohio.
To increase production capacity of automotive airbag inflators in North AmericaDaicel will increase its production capacity of automotive airbag inflators (gas generators) in North America during its new mid-term management plan period starting from FY 2014. The capacity will be expanded with equipment enhancement due to continued full production at Daicel Safety Systems America in Kentucky. The company also plans to construct a new plant within the same premises. In addition, Daicel is considering possibility to use the manufacturing capacity at Special Devices, Inc. Daicel acquired this initiator manufacturing and sales company in 2012. Plant construction in Mexico is also under consideration.
To develop capacities to produce 2.4 million cylinder liners per month at its two U.S. plantsIn June 2013, TPR started operations at its JV, TPR Federal-Mogul Tennessee, Inc. The supplier expects this plant to produce 600,000 ASLOCK cylinder liners per month by April 2014. This product features enhanced adherence with aluminum alloy engine blocks. Currently, Federal-Mogul TP Liners, Inc. in Minnesota produces 1.2 million ASLOCK cylinder liners per month. Due to order increase from U.S. automakers, production of those to be supplied to Japanese automakers is being transferred to its new plant in Tennessee. In the future, TPR plans to increase the production capacity at the Tennessee plant to the same level as that at the Minnesota plant to develop a total production capacity of 2.4 million units per month in the U.S.
To start its first overseas production of hybrid system inverters and standardized air-conditioning HVACsDenso will produce inverters, main components of hybrid systems, for the first time outside Japan. In the U.S., the supplier plans to establish an assembly line at its plant in Tennessee by FY 2014 to meet demands from Toyota and other automakers. Main components, including power devices, will be exported from Japan while substrate implementation and housing production/assembly are localized.
|Denso will also start overseas production of its newly developed in-vehicle HVAC units for automotive air-conditioning systems. This standardized unit can be used across vehicle segments, from segments B to D, and also on non-Toyota vehicles. As the initial step, the company will start manufacturing the product in North America as early as FY 2015. Manufacturing know-how will be transferred from its mother plant in Nishio, Japan to North America to establish a supply system for Toyota and other automakers. Denso expects economies of scale through this full-fledged production outside Japan.|
To enhance SUV tire production capacity; to partially transfer passenger car tire production to MalaysiaToyo Rubber established a new plant in the fourth phase of its production capacity enhancement project due to continued full production at Toyo Tire North America Manufacturing Inc. (TNA) in Georgia. The plant started producing tires, mainly for SUVs, in December 2013 with an annual production capacity of 2.5 million units. JPY 20 billion was invested in this construction. The supplier plans to reduce the passenger car tire production volume at TNA and transfer some production to Toyo Tyre Malaysia Sdn Bhd in Malaysia. This plant started operations in May 2013 and will export the products to the U.S. Passenger car tires are also exported from Japan and China to the U.S.
To start manufacturing passenger car steel wheels featuring rims with uneven thickness in 2014Topy Industries will start manufacturing passenger car steel wheels featuring rims with uneven thickness at Topy America Inc. in Kentucky in the second half of 2014. This product is lighter by 7 to 10% than conventional steel wheels and its supply to a Japanese automaker will start in the first half of 2015. In Japan, the steel wheels featuring rims with uneven thickness have been widely used on trucks and buses because a large amount of materials can be reduced by changing the rim thickness. These wheels, however, have not been used on passenger cars in Japan due to limited weight reduction. Under these circumstances, the supplier has decided to produce these wheels in the U.S. because some European and U.S. automakers use rims with uneven thickness in response to increasing demand for weight reduction. This will be the first time for a Japanese automaker to select rims with uneven thickness for passenger cars. Topy plans to produce 70,000 units per month for one vehicle model in the first year. From 2016 and onward, the supplier hopes to expand production of the steel wheels and supply them for more vehicle models.
Starts operations at its second plastic fuel tube plant in July 2013In July 2013, Toyota Gosei started operations at its Howell plant in Michigan, owned by TG Fluid Systems USA Corporation (TGFSUS), as its second plastic fuel tube plants. The supplier rented a plant building and installed new manufacturing equipment with an investment of JPY 1.1 billion. In addition to Toyota and Chrysler, products are supplied also to GM and Ford, which have placed new orders for their new models. While main components are produced at this new plant, final assembly is performed at its existing plant to optimize production efficiency. Toyota Gosei expects sales from TGFSUS to increase by 80% to JPY 9 billion in 2014 from the FY 2012 level.
Starts operations at its plant for variable-displacement type compressors for automotive air-conditioners in 2013In September 2013, Toyota Industries started producing components of variable-displacement type compressors for automotive air-conditioners at Toyota Industries Compressor Parts America, Co. in Georgia. These components are supplied to two compressor manufacturers, Michigan Automotive Compressor, Inc. and TD Automotive Compressor Georgia, LLC. Demand for variable-displacement type compressors is increasing in North America for compliance with tighter fuel consumption regulations. The supplier aims to expand its capacity to meet this demand. The company also hopes to raise the local parts procurement ratio and enhance cost competitiveness.
|Toyota Iron Works||
To increase body frame component production capacity in North AmericaToyota Iron Works will increase its body frame component production capacity at its three plants in North America by FY 2015. The enhancement will be made to cope with demands from Toyota and Nissan to increase production. In 2013, the supplier introduced a large press machine to Toyotetsu Canada, Inc. (TTCA) in Ontario. In 2014, additional press and blanking machines will be introduced to its three plants, TTCA, Toyotetsu Mid America, LLC. (TTMA) in Kentucky, and Toyotetsu America, Inc. (TTAI) in Kentucky. In total, an investment of JPY 4 billion to JPY 5 billion is expected between FY 2013 and FY 2014. Toyota Iron Works plans to increase its revenue in North America by 11% to the JPY 100 billion level by FY 2015 from the FY 2013 outlook.
To expand annual engine valve production capacity in North America in FY 2013 and FY 2014By November 2013, Nittan Valve installed two engine valve production lines and press equipment at U.S Engine Valve in South Carolina. After another production line is added in 2014, its annual production capacity will be increased to 10 million units, as a total of 22 lines. The supplier will also introduce valve production equipment to a facility at Eaton's plant in Nebraska. Its annual production capacity in the U.S. is expected to be increased from 50 million units at the beginning of 2013 to 80 million units in 2014.
Starts its first overseas production of head-up displays in U.S.Nippon Seiki set up an assembly line dedicated to head-up displays (HUDs) at an automobile and motorcycle instrument manufacturer in Ohio, New Sabina Industries, Inc. In 2013, the line started producing new products for GM, which increased the number of models that use the supplier's products. In the past, HUDs had all been supplied from Japan, but production in the U.S. has started to meet an increase in orders. Nippon Seiki plans to produce 100,000 units per year in 2014 and 2015. The supplier will shift new orders gradually to on-site production.
|Panasonic, Tesla Motors||
To construct large automotive battery plant in southwestern U.S.; to go into production in 2017Panasonic has entered the final stage to construct an EV lithium ion battery plant jointly with Tesla Motors in California (Source: report released in February 2014). According to the summary plan announced by Tesla Motors in February 2014, the plant will be located in Nevada or other southwestern state. The site area will be up to 400 square meters. The plant will start operations in 2017 and have an annual production capacity for 500,000 vehicles in 2020. USD 4 billion to USD 5 billion will be spent on the construction. The half is expected to be borne by TESLA and the rest by several Japanese and U.S. partners including Panasonic. The plant will be one of the largest battery complexes in the world, which covers all from materials, cells (battery cores), and even to assembly. Panasonic, TESLA, and material manufacturers will open their production bases within the same premises.
To enhance production capacities of universal joints and other partsHikari Seiko will invest JPY 1 billion in its overseas plants in the three years until 2015. The supplier plans to enhance its engine parts production capacities in China, the U.S., and the Philippines. The company also has a plan to enter into the Indonesian market. At its plant at Hikari-U.S.A in South Carolina, a new production building will be established to increase its capacity to produce universal joints and shafts. It will start production within 2014. With these production capacity enhancements, the supplier aims to increase the revenue at its U.S. subsidiary by 25%.
To enhance production capacity of power metal products; to newly produce plastic molded partsIn autumn 2014, Hitachi Chemical will enhance its production capacity of powder metal products at Hitachi Powdered Metals (USA), Inc. in Indiana. The supplier will also introduce manufacturing equipment into the same premises to start manufacturing plastic molded products for automobiles as early as 2015. An investment of up to JPY 2 billion is expected.
To enhance stamping capacity for producing instrument panel reinforcementsFutaba Industrial plans a large enhancement on its stamping capacity to cope with increasing production of body components and instrument panel reinforcements at its plant at Futaba Industrial Texas Corp. The investment amount is yet to be released (Source: a press release in February 2014).
|Mitsui Mining & Smelting||
Establishes company for production and sales of automotive catalystsIn July 2013, Mitsui Mining & Smelting established Mitsui Kinzoku Catalysts America Inc. in Kentucky to manufacture and sell automotive catalysts. It was capitalized at USD 10 million. The plant is scheduled to go into production in July 2015. It will produce catalysts for automotive and general-purpose engines, which will be supplied mainly for Japanese automakers. The plant will be in charge of the process for having rare metals supported on catalyst substrates, which will be supplied from ceramic and other manufacturers.
Considering producing HV motor coresIn September 2013, Mitsui High-tec announced that it will start a specific investigation to produce driving motor cores for hybrid and other vehicles in the U.S. Details such as construction schedule and size of the plant are yet to be released. A feasibility study will be conducted to determine how and where to construct the plant in what size. The supplier intends to prepare for the construction at least before automakers start manufacturing HVs in the U.S.
To enhance production capacity of aluminum extrusion tubes for heat exchangersMitsubishi Aluminum will add one extruding press and set up new ancillary equipment at Thermalex, Inc. (TMX) in Alabama. TMX manufactures and sells multi-hole aluminum extrusion tubes for heat exchangers. JPY 950 million will be invested in this enhancement. The equipment is scheduled to start operations in November 2014. The annual production capacity at the plant will be increased by 3,000 tons to 13,000 tons. In North America, aluminum air conditioning systems are increasing in use. The enhancement will be made in response to demand increase for multi-hole extrusion tubes.
|Mitsubishi Heavy Industries||
To start operations at its new plant for passenger car turbo chargers in autumn 2014Mitsubishi Heavy Industries is constructing a plant for producing passenger car turbo chargers within the premises of Mitsubishi Heavy Industries Climate Control, Inc. in Indiana. Production is scheduled to start in autumn 2014 with an annual capacity of 600,000 units. The supplier will enhance its facilities gradually with an aim to supply its products to Japanese and European automakers in North America as well as U.S. automakers. Mitsubishi plans to increase its production volume to 1.2 million units by 2016. The supplier will also increase staffs to design products that meet customers' requests.
To enhance production capacity of automotive electric componentsIn October 2013, Mitsubishi Electric announced that it will invest JPY 7 billion in Mitsubishi Electric Automotive America, Inc. in Ohio to enhance its production capacity of automotive electric components. Components that are currently exported from Japan will be shifted to local production. Production of high-efficiency alternators started at its main plant in Mason, Ohio in January 2014. Production of motor controller units for electric power steering systems will start at its Maysville plant in Kentucky in October 2014. Each plant aims to produce 1.3 million units per year in 2016. Mitsubishi expects its revenue to increase by 20% by FY 2016 from USD 1.1 billion in FY 2012.
To sell its sheet metal business in U.S. to Unipres; to construct new plant for fuels tanks and sunroofsIn March 2014, Yachiyo Industry announced that it will sell the sheet metal business of Yachiyo Manufacturing Of Alabama, LLC (YMA) in Alabama to Unipres. The supplier also announced a plan to concentrate its management resources into its major products, plastic fuel tanks and sunroofs. To expand YMA's production capacity of plastic fuel tanks, the production will be transferred from Alabama to a plant newly constructed in Georgia. This will double its annual production capacity to 400,000 units within 2014. JPY 3 billion will be invested in this project. The plant is scheduled to go into production in September 2014 and all products will be supplied to Honda's plant in Alabama. Combined with its Ohio plant, the total production capacity of fuel tanks in the U.S. will increase to 1.4 million units per year. At the Georgia plant, a sunroof production line will also be set up with an annual capacity of 200,000 units.
To establish JV for aluminum materials used on automotive panels with Constellium in NetherlandsIn January 2014, UACJ announced that it has started investigating possibility of a JV in the U.S. with Constellium in Amsterdam, Netherlands for supplying aluminum materials used on automobile panels. UACJ is a JV of Furukawa-Sky and Sumitomo Light Metal Industries and plans to reach an official agreement by mid 2014. Constellium will own 51% of shares and UACJ 49%. A total of USD 150 million will be invested in this project. In the initial stage, a plant with continuous heat treatment and surface treatment lines will be constructed to establish an annual production capacity of 100,000 tons. UACJ's consolidated subsidiary in Kentucky, Tri-Arrows Aluminum, is also expected to participate in this JV.
Acquisition, resolution of capital, and business alliances
To acquire injection-molded plastic parts manufacturer in U.S.; to start operations in North AmericaIn March 2014, Kuroda Electric announced that it has agreed with NankaiKogyo to acquire all shares of Nankai's wholly owned subsidiary in California, Nankai Enviro-Tech Corporation. The subsidiary was capitalized at USD 1 million and its main plant is located in Mexico. It supplies plastic injection moldings mainly to Japanese and European suppliers, mostly in the U.S. and Mexico. Its revenue was USD 18 million in FY 2013. The amount paid for this acquisition is yet to be released but estimated at several hundred millions of Japanese yen. At present, Kuroda Electric has a sales subsidiary but no production base in North America. Through this acquisition, the supplier aims to establish a network to manufacture and sell automotive parts on its own in North America.
To convert its U.S. subsidiary into wholly owned subsidiaryIn March 2014, Showa will acquire 8.65% of the outstanding shares of its consolidated subsidiary in Ohio, American Showa, Inc. (ASI), from American Honda Motor Co., Inc. in California. ASI will be converted into Showa's wholly owned subsidiary. With this conversion, Showa aims to accelerate its decision making process and enhance its mobility. ASI was capitalized at USD 85 million and manufactures shock absorbers and power steering components.
|Nippon Steel & Sumitomo Metal||
Acquires steel plate plant from ThyssenKrupp jointly with ArcelorMittal: starts operations at JV in February 2014Nippon Steel & Sumitomo Metal and ArcelorMittal (AM) purchased a steel plate plant in Alabama from ThyssenKrupp Steel USA LLC at the end of November 2013 and started a JV at the end of February 2014. USD 1.55 billion was spent for this acquisition. Nippon Steel & Sumitomo Metal and AM hold 50% of the shares, respectively. The JV was named AM/NS Calvert LLC. It can produce 5.3 million tons of hot-rolled steel sheets, 2.5 million tons of acid-washed, cold-rolled steel sheets, and 1.4 million tons of hot-dip galvanized steel sheets. Nippon Steel & Sumitomo Metal owns I/N Tek (cold-rolled steel sheets) and I/N Kote (surface-treated steel sheets) in Indiana as automotive steel sheet JVs with AM in the U.S. They can produce more than 2 million tons of steel sheets annually in total. This new JV enables Nippon Steel & Sumitomo Metal to satisfy growing demands in the automotive steel sheet market, especially in the southern U.S.
Goodyear requests cancellation of alliance agreement and dissolution of JVIn February 2014, Sumitomo Rubber announced that Goodyear has offered the company to call off their alliance agreement and to dissolve their JV. Sumitomo also announced that it has received an official notification of Goodyear's filing for arbitration with the International Chamber of Commerce. Since 1999, the two companies have worked together to establish JVs to manufacture and sell tires in Europe and North America based on their alliance agreement. In Japan, they have collaborated to operate JVs for selling and purchasing tires and to promote exchange of tire-related technologies. Negotiation to dissolve the partnership is expected to take several years.
Alpine and Kasai Kogyo strengthen research and development centers
Consolidates its research and development center with Alps Electronics for faster development of next-generation products including car navigation systemsAlpine is reforming its development functions in the U.S. to enable faster development of next-generation on-board products. In particular, the supplier is promoting partnership with its parent company, Alps Electronics, with a main focus on development and sales of car navigation systems. In 2013, its technology development and sales center at the Detroit office in Michigan, owned by Alpine Electronics of America, Inc. in California, was relocated into a building at the Detroit office of Alps Electronics' local subsidiary, Alps Electric (North America), INC. in California. Alpine has started joint development through enhanced exchange among engineers. In addition, its research and development center in California, Alpine Electronics of Silicon Valley, Inc., has been consolidated into that of Alps Electronics in Silicon Valley. This consolidation aims to enhance information gathering of next-generation automotive technologies including autonomous driving.
To open development center in North America in 2014Kasai Kogyo plans to open a development center in North America in 2014. This center aims to support development centers of its customers, including Nissan Technical Center North America (NTCNA) in Michigan and Honda R&D Americas, Inc.'s Ohio Center. The supplier hopes to increase development speed and efficiency as well as to complete all processes in North America. A test and prototyping building will be located at M-Tek(Tennessee plant). The company plans to set up a design division at a place easier to attract human resources (Source: report released in November 2013).
Activities in Canada by Toyota Gosei and Futaba Industrial
Starts operations at new interior/exterior parts plant in 2013In July 2013, Toyota Gosei started operations at its new Stratford plant of TG Minto Corporation in Ontario. JPY 1 billion was invested in this plant on a 6,000-square-meter plot. The plant manufactures interior and exterior parts including instrument panel components, pillar garnishes, and column covers. These products are supplied to Toyota's plant in Canada. The new plant is expected to produce revenue of JPY 1.4 billion in FY 2014. About 70 employees are working at this plant.
Constructing new press facility at its Canada plant for integrated productionFutaba Industrial is constructing a press facility at its plant of F.I.O Automotive Canada Corp in Ontario. The plant currently produces exhaust pipes, mufflers, and body components. The new facility is planned to go into production at the end of 2014. JPY 2.7 billion is being invested in this project. At present, the plant has no pressing process and assembles pressed components which are supplied from another plant in Illinois. Due to an increase in its supply to Toyota and other automakers in North America, the supplier will establish an integrated production system from stamping to welding to reduce costs and increase its production capacity.
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