Japanese suppliers in China (Part 1): Southern, Central and Southwestern regions
Suppliers increase production, construct plants, and enhance corporate functions
This report summarizes activities of Japanese parts suppliers in southern, central, southwestern and other regions in China during the ten months from February 2014 to November 2014. Japanese parts suppliers have been primarily bolstering their production capacities at existing plants in Guangdong Province, and establishing new subsidiaries and plants in inland areas, such as Hubei, Hunan, Henan Provinces and Chongqing City. Some parts suppliers have been reinforcing their corporate functions, such as marketing, product development and quality assurance. Japanese parts suppliers have also been stepping up their activities to receive orders from European, U.S. and Chinese automakers as well as Japanese OEMs in these regions.
(Please click the map for OEM plant locations.)
Central and Southwestern China
(Please click the map for OEM plant locations.)
|Boost production capacity
(* Also produce new product)
|Add production line and equipment||Guangdong Province: Akebono Brake, H-ONE, Kasai Kogyo, Suncall, Tigers Polymer, Nissin Kogyo, Nittan Valve, Piolax, Furukawa Electric, Yutaka Giken and Unipres*
Hubei Province: H-ONE, Piolax and Yutaka Giken
|Add plant||Guangdong Province: Ahresty, TS Tech (expansion in line with relocation) and Unipres|
|Establish new subsidiary, construct new plant/begin production
(* Also produce new product)
|Hubei Province: Keihin, Koito Manufacturing, JSP, Tachi-S (also begins production in Dalian City) and Furukawa AS
Hunan Province: Asteer and Pacific Industrial*
Henan Province: Hitachi Chemical*
Chongqing City: Yazaki Corporation
|Reinforce marketing, development, quality assurance and other corporate functions. Words in parentheses refers to locations||Kinugawa Rubber (Guangzhou), San-En Kizai (Guangzhou), Showa (Guangzhou) and Nissin Kogyo (Chongqing)|
Japanese suppliers Related Reports:
* India (Nov. 2014)
* Mexico: New plants built to satisfy OEM demand (Oct. 2014),
Mexico and Brazil: Expanding capacity for local demand (Oct. 2014)
* Thailand (Sep. 2014)
* Indonesia (Jun. 2014), Vietnam, Malaysia, Laos, and Myanmar (Jun. 2014)
* Europe (Jul. 2014), the U.S. (Apr. 2014)
* China (Part 1): Eastern and Central China (Mar. 2014),
China (Part 2): Northern, Northeastern & Southern regions (Mar. 2014)
Activities in Southern China: Guangdong
Completes construction of third plant in Guangzhou City in September 2014In September 2014, Ahresty's subsidiary, Guangzhou Ahresty Auto Parts Co., Ltd., completed the construction of its new third plant at a site adjacent to its first plant. Ahresty integrated three of its old rented plants (third, fourth and fifth plants) into the new third plant to increase its production volume and distribution efficiency and reduce labor costs. The supplier's monthly production capacity for die-cast parts, which are used in automotive engines, has been expanded to 2,600 tons.Ahresty also started mass-producing and supplying its products to a Volkswagen (VW) Group manufacturer in China in June 2014.
To add three caliper production lines at Guangzhou plantAkebono Brake Industry Co., Ltd. will add three caliper production lines at its Guangzhou plant, Akebono Corporation. As a result, the Guangzhou plant, which produces brake parts, such as disc brakes and drum brakes, will have seven production lines by the summer of 2015. This will increase the supplier's monthly caliper production capacity in China from 200,000 units in the first half of 2014 to 350,000 units. By boosting its production capacity, Akebono Brake will meet new orders, which the supplier has received from Nissan Group manufacturers, its main customers, as well as General Motors (GM) Group manufacturers and other Japanese OEMs.
To bolster production capacity at two plants in Guangdong ProvinceH-ONE Co., Ltd. will invest JPY 2.7 billion in the introduction of two new 1,500-ton stamping machines and other equipment at QH Auto Parts Industries Inc. in Qingyuan City, Guangdong Province to strengthen its production capacity. The new machines will begin operations in April 2015. H-ONE will also invest JPY 1.7 billion in the installation of a new 3,000-ton servo stamping machine at GH Auto Parts Industries Inc. The new machine will be operational in August 2016. Furthermore, H-ONE has invested JPY 1.6 billion in the installation of a high-efficiency welding robot line at its plant in the Guangzhou area to strengthen its welding capability. The new robot line began operations in October 2014. In response to Honda Group manufacturers' plans to boost production, H-ONE will increase the production of body panels and frame components. H-ONE will also meet increasing demands for parts made of high-tensile steel sheets.
To prepare production of headliners at Guangzhou plantKasai Kogyo Co., Ltd. will introduce stamping machines and parts assembly facilities at Guangzhou S.K. Automoive Interior Co., Ltd., a joint venture (JV) between Kasai Kogyo and Sanwa Kogyo Co., Ltd. (Hiroshima City), by 2017 to produce headliners for Nissan Group manufacturers. Currently, Grupo Antolin-Irausa, S.A. (GA), a Spanish automotive interior parts manufacturer, supplies headliners to Nissan Group manufacturers in Guangzhou on behalf of Kasai Kogyo. Kasai Kogyo, however, will prepare production of headliners prior to receiving orders for Nissan's next vehicles as the supplier dissolved its partnership with GA.
To strengthen quality assurance network at production subsidiary in GuangzhouKinugawa Rubber Industrial Co., Ltd. will set up a comprehensive design, development and quality assurance network for its products in China. As part of this plan, Kinugawa Rubber will invest tens of millions of yen in its production subsidiary, Kinugawa Rubber and Plastic Guangzhou Co., Ltd., in the fiscal year ending in March 2015 (FY 2014) to additionally install testing facilities. The new comprehensive network will allow the supplier to check its products against quality and performance requirements of European and U.S. OEMs in China. Kinugawa Rubber will also improve trainings for its testing engineers and expand sales of its body-sealing products from its key customers as well as other Japanese, European and U.S. OEMs.
Establishes sales subsidiary in GuangzhouIn March 2004, San-En Kizai established SANEN (Guangzhou) Co., Ltd. in China. The supplier's new sales subsidiary is capitalized at JPY 50 million. The supplier is improving its network to supply components for use in continuously variable transmissions to Chinese plants of Japanese transmission manufacturers, which are its main customers.
To expand production capacity for valve springs and ring gears at subsidiary in GuangzhouSuncall Corporation will additionally install production lines at its production subsidiary, Suncall (Guangzhou) Co., Ltd., to bolster its production capacity for engine parts within FY 2014. In response to the increase in production by Japanese OEMs, Suncall will double its monthly production of engine valve springs year-over-year (y/y) to 2 million units and increase that of ring gears by 150% y/y to 180,000 units by March 2015. The investment in the production expansion will amount to JPY 300 million.
Establishes new R&D subsidiary in GuangzhouIn August 2014, Showa Corporation established Showa (Guangzhou) Auto Parts R&D Co., Ltd. in China. The new research and development (R&D) subsidiary is capitalized at JPY 200 million. The supplier's first R&D facility outside Japan was built to develop new shock absorbers and other product models in response to customers' launches of new vehicle models. The new R&D subsidiary strengthens and accelerates the supplier's local procurement procedures and quality control involved in the development of its products, and helps Showa's sales to expand.
To expand production lines for engine air-cleaning devices at subsidiary in GuangzhouTigers Polymer Corporation will expand production lines for air-cleaner filters at its production subsidiary, Guangzhou Tigers Polymer Co., Ltd., by the end of FY 2014. Tigers Polymer will also add four molding machines for plastic cases that house cleaning filters at the production subsidiary. The supplier's FY 2014 annual production capacity for air-cleaning devices will be doubled y/y to 1 million units from the FY 2013 level.
To relocate production subsidiary within Zengcheng District in Guangzhou City in 2016 at district government's requestAt the request of Zengcheng District in Guangzhou City in moving ahead with the district's urban development project, TS Tech Co., Ltd. will relocate its plant, Guangzhou TS Automotive Interior Systems Co., Ltd., to a new site, which is about 12 km northeast of the present site within the district, in July 2016. The new plant will have a site area about twice that of the present plant and a floor area about 1.6 times the present floor area. The annual production capacity for automobile sheets is, however, planned to remain at 500,000 units, almost the same as the present capacity. TS Tech intends to make the new plant an environmentally friendly plant, which features an efficient distribution system and reduced use of energy.
To expand plant in Zhongshan City, Guangdong Province to boost production capacity for brake systemsNissin Kogyo Co., Ltd. will substantially increase its capital investment in China as stated in its new mid-term business plan, which started from FY 2014. Nissin Kogyo will add a new plant at Zhongshan Nissin Industry Co., Ltd., its production subsidiary that produces brake products in Guangdong Province, to increase its production capacity for brake systems. In addition, the supplier will fully handle all stages of production of electronic stability control (ESC) systems from FY 2014. The existing plant in Zhongshan has handled only the assembly of ESC systems thus far. Local production of regenerative braking systems for hybrid vehicles is also in view.
To boost production capacity for engine valves at Guangzhou plantNittan Valve Co., Ltd. plans to boost annual production volume of engine valves at its subsidiary, Guangzhou Nittan Valve Co., Ltd. The subsidiary's production capacity will be increased from 20 million to 25 million units in FY 2013 to 70 million to 80 million units by FY 2018. The subsidiary will increase the number of its production lines from the current 10 to 12 in the spring of 2015 and to 15 by the end of FY 2017. Nittan Valve plans to construct another new plant with 10 production lines at the subsidiary during FY 2017 and FY 2018.
To liquidate subsidiary, NHK Seating (Guangzhou)In March 2014, NHK Spring Co., Ltd. announced that it will liquidate its Chinese subsidiary, NHK Seating (Guangzhou) Co., Ltd. The liquidation will be completed by the end of March 2015. The Chinese subsidiary was established in 2011 to manufacture and sell automotive seat components. NHK Spring, however, decided that achieving its initial objectives might be difficult. The development and design work handled by NHK Seating (Guangzhou) will be transferred to another Chinese subsidiary, NHK Seating (Hubei) Co., Ltd., in Xiangfan City, Hubei Province.
To increase production capacity in China by 80% and put in place production capabilities for each product at Dongguan and Wuhan plantsPiolax, Inc. will increase its production capacity in China by about 80% from the FY 2013 level with an investment of JPY 3 billion during FY 2014 and FY 2016. Dongguan Piolax Co., Ltd. in Guangdong Province will rent a neighboring plant to expand its production area to 1.5 times and bolster its production capacity primarily for metal fasteners and assembly products. Wuhan Piolax Co., Ltd. will also boost its production capacity for plastic parts. Dongguan Piolax will begin shifting the production of some plastic parts to Wuhan Piolax. Piolax will put in place production capabilities for each product at the two production subsidiaries in an effort to meet the needs for local production by Japanese, European, U.S., Korean and Chinese OEMs.
Adds second production line for BSSs at Shenzhen plantIn the summer of 2014, Furukawa Electric Co., Ltd. installed another production line for battery state sensors (BSSs) at its Chinese subsidiary, Furukawa Electric (Shenzhen) Co., Ltd., and increased the number of production lines at the subsidiary to two. BSSs are used to check the charging status of batteries for start-stop systems. Furukawa Electric increased the subsidiary's production capacity to meet increased orders for the BSSs. Installation of more production lines in 2015 and afterward is under discussion.
To boost production capacity for AT parts at plant in Foshan CityYutaka Giken Co., Ltd. will increase the number of torque converter production lines at its subsidiary, Foshan Yutaka Auto Parts Co., Ltd., to three by adding a new production line. The new production line is scheduled to begin operations in January 2015. The production volume of torque converters is expected to increase from torque converters for 900,000 vehicles in 2014 to that of 1.3 million vehicles in 2016. Some media reports have said that the annual production capacity will be raised from torque converters for 500,000 vehicles in 2014 to that of 760,000 vehicles in 2015. The investment in the production expansion will amount to JPY 900 million. This is to meet the increase in production by Honda Group manufacturers in China. Meanwhile, Yutaka Giken is gradually boosting its production capacity for exhaust system parts at Wuhan Jin Feng Autoparts Co., Ltd. in Hubei Province as well as the Foshan plant.
To produce supplier's first torque converters at Guangzhou plant and construct new office building for subsidiary, which supervises operations in ChinaUnipres Corporation expanded the plant of its Chinese subsidiary, Unipres Precision Guangzhou Corporation, and installed a new production line for torque converters at the plant in November 2014. The plant was expanded to meet the supplier's first order for torque converters. Mass production at the new production line is scheduled to begin in August 2015. Unipres also acquired a site adjacent to the Guangzhou plant in 2014 in response to an increase of orders for its regular automatic transmission parts, such as clutch packs and sun gears. A new plant will be built at the site by the fall of 2016. The Chinese subsidiary is expected to increase its sales from JPY 7 billion in FY 2013 to more than JPY 10 billion by the end of FY 2016. In addition, Unipres will construct a new office building for Unipres (China) Corporation (Guangzhou City), which controls and manages Unipres' Chinese subsidiaries, within the premises of the new plant.
Activities in Central China: Hubei, Hunan and Henan
To bolster production capacity at Wuhan plant in Hubei ProvinceIn 2014, H-ONE Co., Ltd. added 26 cutting-edge robots to welding lines at the second plant of its production subsidiary, WH Auto Parts Industries Inc., in Wuhan to increase the ratio of automated operation and bolster its production capacity for body frame parts. H-ONE invested JPY 400 million for the robots. In response to key customers' plans to boost production, H-ONE will also add a new 3,000-ton servo stamping machine at the stamping plant of the production subsidiary with an investment of JPY 1.7 billion. The new stamping machine is slated to begin operations in August 2016.
Supplies pedals for models built on Renault-Nissan CMF platform from Wuhan plant in Hubei ProvinceIn 2014, F-Tech Inc. started producing pedals for the first series of vehicles built on Renault-Nissan Alliance's common module family (CMF) platform at its production subsidiary, F.tech (Wuhan) Inc. The pedals are supplied to Nissan's plants in the U.S., China and the U.K. The production subsidiary is expected to supply pedals for CMF models built by Donfeng Renault Automotive (Wuhan), which will start operations in 2016.
Establishes new subsidiary in Xiantao City, Hubei Province to produce HVAC units for automobilesIn July 2014, Keihin Corporation established Keihin (Wuhan) Automotive Parts Co., Ltd. (KWH) in Xiantao City, Hubei Province to produce heating, ventilation and air conditioning (HVAC) units for automobiles. The new subsidiary is capitalized at CNY 30.9 million (JPY 500 million), which was fully invested by Dong Guan Keihin Engine Management System Co., Ltd. (KDG), Keihin's other Chinese subsidiary in Guangdong Province. KWH will start producing HVAC units at a rented plant by the end of 2015 with an annual output capacity of 400,000 units. KDG will increase the capital to CNY 66.3 million (JPY 1.09 billion) for capital spending in 2016. Keihin's annual HVAC production capacity in China will be increased to 800,000 units, including 400,000 units from KDG.
Establishes fourth Chinese subsidiary in Xiaogan, Hubei Province to produce automotive lampsIn September 2014, Koito Manufacturing Co., Ltd. established its fourth Chinese subsidiary, Hubei Koito Automotive Lamp Co., Ltd., in Xiaogan City, Hubei Province to produce automotive lamps. The new production subsidiary is capitalized at JPY 1 billion. Koito Manufacturing may increase the capital depending on the progress of the plant building and facility installation. The subsidiary's plant is slated to begin operations in July 2016. The subsidiary's annual production capacity will be 500,000 units each for headlamps and signaling lamps. The subsidiary has already won an order from one Japanese OEM in central China, and will gradually try to get more orders from other companies. Koito Manufacturing's total annual production capacity in China, including those of the other three subsidiaries, will be 7.1 million units for headlamps and 7.4 million units for signaling lamps.
To establish fourth Chinese subsidiary in Wuhan, Hubei Province to produce and sell expanded polypropyleneIn November 2014, JSP Corporation announced that it will establish JSP Plastics (Wuhan) Co., Ltd. in Hubei Province, China to produce and sell its P-Block expanded polypropylene. JSP will invest JPY 1.2 billion in establishing the new subsidiary and constructing a new plant. The new plant will start operations in January 2017 and will have an annual production capacity of 3,000 tons. JSP currently produces the same product at three plants in Jiangsu Province, Guangdong Province and Chongqing City. The capacity at these plants, however, is insufficient and there is a need to reduce the cost of transporting products from these plants. The new subsidiary will meet growing demands from customers in Central and Southwestern China.
Begins production of seats at new JV plants in Xiangyang, Hubei Province and Dalian, Liaoning ProvinceIn October 2014, Tachi-S Co., Ltd. started producing automotive seats in succession at TACHI-S Lear DFM Automotive Seating (Xiangyang) Co. Ltd. and Lear DFM TACHI-S Automotive Seating (Dalian) Co. Ltd., its new JV plants founded in 2013, in response to an order it received for its seats, which will be used in a new model produced by Dongfeng Nissan Passenger Vehicle Company. The Xiangyang plant has an annual production capacity of 110,000 units while the Dalian plant has 180,000 units.
Begins production of wiring harnesses at plant in Wuhan, Hubei ProvinceIn July 2014, Wuhan Furukawa Automotive Systems Co., Ltd., Furukawa Automotive Systems Inc.'s (Furukawa AS) sixth Chinese subsidiary, began producing automotive wiring harnesses at its new plant. Furukawa AS invested JPY 1.4 billion in the new plant. Wuhan Furukawa Automotive Systems supplies its products to Dongfeng Nissan Passenger Vehicle Company, Dongfeng Honda Automobile Co., Ltd. and other Japanese automakers. The subsidiary aims to achieve annual sales of JPY 5 billion by the end of FY 2017.
To construct own plant in Changsha with operation slated for 2015Changsha Asteer WuuShiang Auto Parts Co., Ltd., Asteer Co., Ltd.'s Chinese subsidiary, currently produces stamped metal parts for car body frames at a rented plant in Changsha. In addition, Asteer is constructing its new own plant in Changsha with operations slated for the spring of 2015. The new plant will have a site area of about 50,000 square meters. The supplier's annual production capacity in China will be doubled. The investment in the new plant will amount to over JPY 1 billion. Mitsubishi Motors Group manufacturers, Asteer's existing customers, as well as FCA Group manufacturers have decided to place orders for the supplier's products. Asteer will further expand customer bases in China.
Constructs new comprehensive stamping plant in ChangshaIn September 2014, Pacific Industrial Co., Ltd. completed the construction of Changsha Pacific Hanya Auto Parts Co., Ltd.'s new stamping plant. The subsidiary in Changsha started supplying its stamping parts to GAC Mitsubishi. In addition, the new plant started the production of battery cases for hybrid vehicles. The subsidiary seeks to expand sales from Japanese OEMs and battery manufacturers. Pacific Industrial expects the subsidiary to achieve sales of JPY 3 billion by the end of FY 2018.
Begins manufacturing plastic rear doors at new subsidiary in Zhengzhou, Henan ProvinceHitachi Chemical Co., Ltd. announced that its subsidiary, Hitachi Chemical Automotive Products (Zhengzhou) Co., Ltd. (HCZZ), began manufacturing plastic rear doors for Zhengzhou Nissan Automobile Co., Ltd.'s new vehicle at its new plant in April 2014. The Hitachi Chemical Group has been manufacturing automotive parts, such as lead batteries, friction materials and powder metal products, in China. Hitachi Chemical regards the new Zhengzhou plant as a production base for interior and exterior plastic molded products.
Activities in Southwestern China: Chongqing
Establishes purchasing and development base in Chongqing CityIn July 2014, Nissin Kogyo Co., Ltd.'s subsidiary, Zhongshan Nissin Industry Co., Ltd., which produces brakes and clutches in Guangdong Province, established a new branch named "Nissin R&D China-Chongqing" in Chongqing City and began operations at the new branch. Nissin R&D China-Chongqing's operations include broadening the subsidiary's product range in anticipation of market needs in inland China, enhancing marketing activities for existing customers and obtaining new customers, such as local manufacturers in China.In 2014, Shandong Nissin Industry Co., Ltd., Nissin Kogyo's subsidiary for producing motorcycle parts in Rushan, Shandong Province, also started producing parts for automobiles. In addition to the Guangdong plant, Nissin Kogyo is modifying the Shandong plant to supply automobile parts to customers in China.
Starts producing meters at new plant in Chongqing CityIn July 2014, Chongqing Yazaki Meter Co., Ltd., Yazaki Corporation's Chinese subsidiary, started producing meters for passenger cars and pickup trucks at its new plant. In 2014, Chongqing Yazaki Meter produced meters for 950,000 vehicles and targeted sales of CNY 360 million (JPY 6 billion). Customers include Japanese and Chinese OEMs. Yazaki's subsidiary aims to have an annual production capacity of meters for 3 million vehicles and achieve sales of CNY 1.2 billion (JPY 20 billion) by the end of 2020.
(Sources: Press releases by each supplier and newspapers)
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