Japanese Suppliers in the U.S. and Canada: High demand leads to rising production
Akebono Brake, JTEKT, Sumitomo Rubber, Daicel, TS Tech, Mitsubishi Heavy Industries, and more
This report will take up the operational trends of Japanese auto-parts suppliers in the United States and Canada. Developments such as production capacity enhancements and the manufacturing of new components will be summarized (Information for roughly a year until early March 2016 was compiled).
(Note: The Japanese fiscal year is from April to March of the following year.)
Automobile sales in the U.S. (passenger cars, light trucks) reached a record-high of 17,470,000 units in 2015, up 5.7 percent year-on-year. Growth in sales volume growth is continuing, with cumulative sales in January and February 2016 at 2,492,000 units, up 3.5 percent y/y. Sales volume for all of 2016 is expected to set yet another record-high.
Automobile production in the U.S. (passenger cars, light trucks) is also expanding, with 11,780,000 units produced in 2015, up 3.7 percent y/y.
Production by Japanese auto manufacturers in the U.S. (same categories as above) only grew slightly in FY 2015, with 3,850,000 units, up 0.9 percent y/y, but a high-operation rate continues. A high level of production is expected through FY 2016.
To keep pace with production, Japanese suppliers are augmenting their production capacities by adding new production lines and equipment at their existing plants, and building additional facilities. Moreover, it is possible that new plants are being built to manufacture new components. Orders from European and American OEMs are also continuing to increase.
|Manufacturer||Production items (new items*), implementation status, and etc.|
|Strengthening capacities (equipment, production lines, new plants)||Akebono Brake Ind.||Disc brakes, friction material, aluminum parts (capacity enhancement, review of production items at each plant)|
|Exedy||Torque converters for automatic transmissions (production line renewal)|
|MC Systems||Anti-corrosive treatments for items like bolts, nuts, and springs (capacity enhancement)|
|Kasai Kogyo||Door trims and other interior parts (plants to be made solely for use by Honda and Nissan respectively)|
|Kinugawa Rubber Ind.||Autobody seals (reserve capacity to be created by miniaturizing production lines and equipment)|
|Keihin Corp.||Intake manifolds (new production lines), air conditioning systems (integrated production), gasoline direct-injectors* (mass production), ECU (capacity increased)|
|Kobe Steel, Mitsui & Co., Toyota Tsusho||Aluminum forging for suspensions (equipment enhancement)|
|Kotobukiya Fronte||Floor carpets, etc. (capacity increased)|
|JTEKT Corp.||EPS* for medium- and high-end cars (new production lines)|
|G-TEKT Corp.||High-capacity hub units* (added production lines)|
|Somic Ishikawa||Reclining dampers* (plans to use unused space in existing plants)|
|Tigers Polymer||Air cleaner modules, etc. (new plant building construction)|
|TS Tech||Seat frames, seats (new techniques introduced, constructing annex)|
|Toyo Tire & Rubber||Tire (plant expanded)|
|Toyobo||Airbag foundation cloth and yarns (facility expansion)|
|Piolax||Hose clamps (operation of expanded facilities)|
|Mitsubishi Electric||Alternators (new plant building added)|
|NTN Corp.||Driveshafts (third manufacturing company established in North America)|
|Otsuka Chemical||Brake pads (launching a new plant)|
|Nippon Steel & Sumitomo Metal Corp.||Cold heading quality (CHQ) steel wire (constructing a new plant)|
|Sekisui Plastics||Foamed plastic parts (launching a second plant)|
|Sekiso Corp.||Porous ducts (launching a new plant)|
|Daicel Corp.||Inflators (launching a second plant)|
|Toray Industries||Carbon fibers (constructing a second plant)|
|Toyoda Gosei||Plastic fuel tube (launching a new plant, transferring production from existing plants)|
|Nifco Inc.||Interior plastic parts (new company established)|
|Nishikawa Rubber||Weather strips (launching a third plant)|
|Fine Sinter||Engine, transmission, and shock absorber parts (adding a new plant)|
|Bridgestone Corp.||Radial tires for passenger cars (constructing a third plant)|
|Mitsubishi Heavy Ind.||Turbochargers (launching a new plant)|
|Yokohama Rubber||Tires for trucks and buses (launching a new plant)|
|Yorozu Corp.||Suspension parts (constructed a second plant)|
Among the Japanese suppliers with plans to augment their business structures, Sumitomo Rubber Industries bought a plant from Goodyear Tire & Rubber Company when it dissolved their alliance. Nissin Kogyo established a joint venture with the Swedish company Autoliv, and Suminoe Textile Co., Ltd. acquired an American interior material manufacturer, among other activities. Due to the weakening yen, Nichirin Co., Ltd. is transferring production of hoses for hydraulic power steering to Japan.
For companies planning to enhance R&D, Kasai Kogyo Co., Ltd. is increasing the number of employees engaged in development. Yokohama Rubber Co., Ltd. is proceeding with plans to establish a development facility by relocating staff to oversee it.
Among Japanese parts suppliers in Canada, TS Tech Co., Ltd. is expanding its seat plant, and Bridgestone Corporation is planning to increase capacity at its radial tire plant for passenger cars and light trucks.
Japanese Supplier Reports:
* China: East/North/Northeast regions (Nov. 2015), China: South/Central/Southwest regions (Nov. 2015)
* Thailand (Sep. 2015)
* Europe (Aug. 2015)
* Mexico (Jun. 2015), Mexico and Brazil (Jul. 2015)
* Southeast Asia (May 2015), the U.S. (Mar. 2015)
* India (Nov. 2014)
Augmenting plants or building new facilities in the U.S.: Akebono Brake Industry, JTEKT Corp., and others
|Akebono Brake Industry Co., Ltd.||
Restructuring production capacity in North AmericaAkebono Brake Industry Co., Ltd. (Akebono Brake)'s production is in chaos due to a big surge in orders that started in FY 2014, equipment failures, and other issues. To correct the situation, the company increased the disc brake and friction material production capacities at facilities including its plants in Elizabethtown and Glasgow, Kentucky in FY 2015. The respective investment amounts are JPY 1 to 2 billion. However, production continues to fall short and the company is relying on measures like shipping parts from Japan by air. The company's North American operations are projected to be in the red for two consecutive years since fiscal year FY 2014. The company is reviewing its production items at every plant in North America and making large investments in production equipment compatible with product development plans for the next ten years and beyond. Akebono Brake will increase the aluminum parts production capacity at its plant in Columbia, South Carolina in the first half of FY 2016. The company will also invest in quality inspection equipment at all of its plants by the summer.
Increasing production capacity for automatic transmission torque convertersExedy Corporation (Exedy) plans to increase its global capacity for automatic transmission torque converters by approximately 20 percent through FY 2018. In order to achieve this goal, the company will make large investments in Japan and increase capacity at its plants outside Japan. Exedy plans to produce a new kind of torque converter in North America from around FY 2017. Along with this, it will renew its existing production lines to increase productivity. The company currently produces automatic transmission torque converters in North America at Exedy America Corporation in Tennessee.
|MC Systems Co., Ltd.||
Increasing anti-corrosive coating capacity for auto-partsMC Systems Co., Ltd. (MC Systems) will increase the annual anti-corrosive coating capacity of Michigan Metal Coatings in Michigan, which it acquired from NOF Corporation in FY 2014, by 50 percent to 56,700 tons in FY 2016. This will cost the company approximately JPY500 million. MC Systems intends to increase its U.S. market share of highly resistant anti-corrosive surface treatment for bolts, nuts, springs, and other automotive parts used by Japanese and American OEMs from 20 percent in FY 2015 to 50 percent in FY 2018. The company is also considering establishing a new plant in Illinois if the increase in demand continues.
Establishing a third driveshaft plant in the U.S. and launching it in 2017In November 2015, NTN Corporation (NTN) established NTN Driveshaft Anderson, Inc. in Indiana, its third driveshaft manufacturing plant in the U.S. The company arrived at this decision because it was running full-capacity production at its existing plants due to strong demand, and this state of affairs is expected to continue. The company invested USD 42 million. The new plant will start operations in April 2017, and is expected to have sales of approximately JPY 2.2 billion in 2018.
|Otsuka Chemical Co., Ltd.||
New brake material plant starts operations in 2015In February 2014, Otsuka Chemical Co., Ltd. established a new plant for making brake pad materials to meet growing demand in the United States. The new plant, Otsuka Chemical America, Inc. in Georgia started operations in November 2015 with an annual capacity of 2,000 tons. It is the company's third plant, with the first two in Japan and China (combined annual capacity of 8,000 tons).
|Kasai Kogyo Co., Ltd.||
Expanding Alabama plant to strengthen production system for HondaIn mid-2015, Kasai Kogyo Co., Ltd. started adding new equipment to the Talladega plant in Alabama to produce door trims and other interior parts for Honda's Alabama plant. Those parts are currently supplied from Kasai Kogyo's Tennessee plant, but in mid-2016 the supply source will be switched entirely to the Talladega plant, which is located closer to Honda's plant. The company will have two dedicated plants for Honda production (Talladega and Ohio) and two for Nissan production (Tennessee and Mississippi). The respective plants will have increased productivity and earning power through specialization.
|Kinugawa Rubber Industral Co., Ltd.||
Miniaturizing production lines and equipment at Tennessee plant to create reserve capacityKinugawa Rubber Industrial Co., Ltd. plans to increase sales from its American operations (the U.S., Mexico, etc.) from JPY 15 billion in FY 2015 to more than JPY 25 billion in 2020, a similar level to Asia in the present. The company will expand sales of components like autobody seals for Japanese, American and European OEMs. Its American subsidiary company, Epro, Inc. in Tennessee, is renewing its plant with compact production lines and equipment to increase production within the existing plant. This is also expected to increase earnings through reducing the work force and quality loss.
Planning an optimized production layout for North American plants by raising capacity for parts like engine pipingKeihin Corporation increased its North American engine piping parts production capacity in FY 2015 by more than 10 percent y/y over FY 2014. The company installed new lines for making intake manifolds (annual capacity of 480,000 sets) in its Keihin Aircon (KAC) Plant in Indiana in the first half of 2015. This has increased Keihin's capacity to 1,280,000 sets including 800,000 sets at its Keihin Michigan Manufacturing (KNM) Plant in Michigan.
|Keihin has also transferred its production of HVAC (heating, ventilation, and air conditioning units) from the KAC plant (800,000 units a year) to its Keihin Thermal Technology of America (TUS) Plant in Ohio and started integrated production of HVAC, including heat exchangers. An automated assembly line was also installed in the TUS Plant. Mass production of gasoline direct-injectors started at the Keihin IPT (KIM) Plant in Indiana. An annual quantity of 4 million sets is projected, with KIM overseeing the downstream processes, and the Keihin de Mexico Plant in Mexico handling the upstream.|
|The annual capacity for engine control units at Keihin's Keihin Carolina System Technology Plant in North Carolina was increased from 1,900,000 to 2,300,000 units.|
|Kobe Steel, Ltd., Mitsui & Co., Ltd., Toyota Tsusho Corporation||
Increasing capacity at its aluminum suspension parts forging plantKobe Steel, Ltd. (Kobe Steel), Mitsui & Co., Ltd., and Toyota Tsusho Corporation are increasing production capacity for making aluminum forged suspension parts at their joint venture company, Kobe Aluminum Automotive Products, LLC in Kentucky. The company expects that automotive production in the United States will increase and the demand for aluminum forged suspension parts will continue to grow due to tougher fuel economy regulations. The JV company will install equipment like a melting and forging line and two forging presses. Operations are slated to begin sequentially from spring 2017, and monthly capacity will increase approximately 40 percent from the current 540,000 units to 750,000 units. An investment of about USD 56,600,000 will be made.
|Kotobukiya Fronte Co., Ltd.||
Increasing capacity for interior parts like floor carpets at its Alabama plantKotobukiya Fronte Co., Ltd. (Kotobukiya Fronte) is expanding its operations for floor carpets along with other interior parts in North America and China. The company is investing approximately JPY 3 billion over three years until the end of FY 2016 to expand its supply structure. In the United States Kotobukiya Fronte has already increased capacity at Kotobukiya Treves North America Inc. in Alabama. The company also expanded the plant structure in Mexico and enhanced the production lines there.
New EPS production line added to Tennessee plant, hub unit production capacity increased at South Carolina plantJTEKT Corporation will install electric power steering (EPS) lines for midsize and large cars at the second JTEKT Automotive Tennessee-Vonore LLC plant. The plant will start mass production of dual pinion type EPS for C-segment SUVs in 2016, and of rack parallel type EPS for D- and E-segment vehicles (including SUVs) in 2017.
|JTEKT is also investing USD 133 million to expand the site area at the Koyo Bearings North America LLC Richland plant in South Carolina by 40 percent, and double the floor area of the facility in order to increase its monthly capacity for hub units 70 percent to 750,000 units. In December 2015 the plant started mass production of a high-capacity series of more durable and rugged hub units for passenger cars to meet strong demand from OEMs in North America.|
Considering the addition of a hot stamping line for ultra-high tensile steelG-TEKT Corporation is studying the feasibility of an ultra-high tensile hot stamping line at G-TEKT North America Corporation's facility in Ohio. The plant is already supplying hot stamp parts for Honda's Acura and all-new Civic, and expects a steady increase in orders.
|Nippon Steel & Sumitomo Metal Corporation||
Established a cold heading wire manufacturing and sales companyIn January 2016, Nippon Steel & Sumitomo Metal Corporation (NSSMC) announced the establishment of Nippon Steel & Sumikin Cold Heading Wire Indiana Inc. for manufacturing automotive-use cold heading quality (CHQ) wire. The new company will be formed by eight Japanese companies that will jointly invest USD 24 million. 42 percent will be owned by NSSMC, 12 percent by Toyota Tsusho, and 10 percent by the other companies including Sumitomo Corporation and Metal One Corporation. The new company will invest USD 50 million to build the new plant. Mass production is slated to start in January 2018, after which the CHQ exports from Japan will be replaced with local supply in the U.S. Wire will be exported from Japan and worked on at the new plant, which will have an initial capacity of 39,000 tons a year. The CHQ wire will mainly be supplied to companies within the U.S., but a small amount is expected to be exported to Central America as well.
|Sekisui Plastics Co., Ltd.||
Second foamed plastic molding plant in the U.S. starts operations in October 2015In October 2015, Sekisui Plastics Co., Ltd. started operations at the second Sekisui Plastics U.S.A., Inc. (headquartered in Tennessee) molding plant in Ohio. The new plant manufactures automotive foamed plastics parts, child seat components, and buffer material for industrial applications. It has an annual capacity of 1800 tons and has had USD 6 million invested in it. Sekisui Plastics plans to sell the U.S.-made products to OEMs in Japan and the U.S. and is considering the addition of more production lines.
A new porous duct plant starts operations in August 2015In August 2015, Sekiso Corporation's U.S. subsidiary, S&A Industries (Ohio State), started operations at its new porous duct plant in Arizona. The plant cost JPY 200 million to build and has an annual capacity of 150,000 ducting units, which it supplies to a Toyota plant in Baja California, Mexico. The ducting used to be manufactured by local manufacturers on a consignment basis but the company decided to manufacture them on their own to stabilize quality.
|Somic Ishikawa, Inc.||
Planning to develop dampers business with European and American OEMs and do production in its existing plants in the U.S.Somic Ishikawa, Inc. plans to produce dampers outside Japan for automotive reclining mechanisms starting in 2020 in order to expand damper supply to European and American OEMs. The company is investigating ideas such as utilizing space that is currently used in its existing plant in the U.S. Its American subsidiary, Somic America Inc., is producing suspensions and other parts in its plants in Maine and Virginia.
|Tigers Polymer Corporation||
Increasing production capacity for engine intake system partsTigers Polymer Corporation (Tigers Polymer) is constructing a new building within the existing plant site of Tigerpoly Manufacturing, Inc. in Ohio to double its production capacity for air cleaner modules and other plastic moldings. The Ohio plant currently has a blow molding line and Tigers Polymer will install a more efficient injection molding line as well for JPY 1.3 billion. The new line will start operations by the fall of 2016. Japanese OEMs are adopting Tigers Polymer's products in an increasing number of models and existing plants are operating at full capacity. The company expects the increase in demand to continue.
Second plant for making automobile airbag inflators completed to tackle post-Takata airbag recall crisisIn April 2015, Daicel Corporation (Daicel) established Daicel Safety Systems America Arizona, Inc., its second airbag inflator plant in the Americas. The new plant is situated next to Special Devices Inc., a manufacturer of components for airbag inflators like igniters that Daicel acquired in 2012. The new plant is slated to start operations by the end of March 2016. Construction of the new plant was initially to be done from FY 2018 to 2019, but the plan was accelerated to deal with a short supply of inflators resulting from the Takata airbag recall issue. The plant will manufacture recall-affected parts and other components for expanding business.
|TS Tech Co., Ltd.||
A new seat frame manufacturing process at Indiana plant, and an additional line at Alabama plant to produce seats for Volkswagen vehiclesTS Tech Co., Ltd. has developed a new process for making seat frames by welding several pieces at once. It has reduced the jig count and production line length which resulted in lower manufacturing costs and frame weight reduction. The new method was initially introduced in TS Tech Indiana LLC in the United States and in plants in Canada to manufacture seats for Honda's all-new Civic (November 2015 report).
|The company will construct an additional building in TS Tech Alabama LLC's seat manufacturing plant. It will produce seats for Volkswagen in the second half of 2016. JPY 1.87 billion was invested. The necessary components for seats will be supplied from the TST Manufacturing De Mexico plant in Mexico.|
|Toyo Tire & Rubber Co., Ltd.||
Tire plant capacity increased in 2015, further capacity expansion work launchedIn December 2015, Toyo Tire & Rubber Co., Ltd. completed phase 4 of its expansion project at Toyo Tire North America Manufacturing Inc. in Georgia, which increased the U.S. subsidiary's annual capacity from 6.5 million to 9 million tires. The company plans to invest another JPY 13 billion in production equipment to manufacture 2.5 million tires by December 2016, which will increase annual capacity to 11.5 million tires in total. Toyo Tire North America Manufacturing Inc. will be Toyo Tire & Rubber's largest tire plant in the world.
|Toyobo Co., Ltd.||
Production capacity of filament yarns for manufacturing airbag fabrics increased by 20 percentTo meet a growing demand for stable supplies among Japanese OEMs, Toyobo Co., Ltd. (Toyobo) will change the supply of yarns for manufacturing airbag ground fabrics produced by Toyobo Industrial Materials America, Inc. (TIMA) in Alabama, entirely to U.S. sources before the end of 2016. In order to accomplish this, Toyobo will increase the annual capacity of PHP Fibers at its German subsidy's U.S. plant, which is located within the TIMA premises in Alabama, from 10,000 to 12,000 tons. The supply of ground fabrics currently imported from its plant in Thailand will be switched to U.S. sources.
|Toray Industries, Inc.||
Expanding carbon fiber business in the U.S. to the automotive industryTo meet order expansion from The Boeing Company (Boeing), Toray Industries, Inc. (Toray) will commence with construction work in 2016 on a new plant in South Carolina that will be the second carbon fiber plant of Toray Composites (America), Inc. (Washington State). The new plant will occupy approximately 1.6 million square meters of ground and be used for integrated production for everything from yarns to carbon fibers. Supply to Boeing is slated to start in 2019. Toray is giving consideration to expanding supply to automotive and other industries in order to stabilize its plant operations.
|Toyoda Gosei Co., Ltd.||
Two plastic tube plants for fuel systems in North America consolidated into oneToyoda Gosei Co., Ltd. has been producing plastic tubes for fuel systems at two plants (Brighton and Howell) that belong to TG Fluid Systems USA Corporation (Brighton, Michigan). To increase efficiency through integrating scattered processes, and reserve necessary space for future capacity increases, the U.S. corporation has built a new plant, Big Brighton plant, on a site adjacent to it. The new plant, standing on a site 1.5 times larger than the two plants combined, was completed in May 2015. The company plans to move all of the production equipment from the two plants to the new one by 2017. Construction of the new plant cost USD 10.6 million.
A new plastic auto parts plant established to serve BMW plants in the U.S.In October 2015, Nifco, Inc. (Nifco) announced the establishment of a new subsidiary company, Nifco KTW America Corporation (Georgia), which will supply plastic auto parts to BMW's plant in South Carolina, one of the chief customers of Nifco's German subsidiary Nifco KTW GmbH. USD 20 million has been invested in the new subsidiary, and it is 90 percent owned by Nifco KTW GmbH and 10 percent by Nifco KTW America Corporation. It is slated to start operations in 2017. Its annual capacity has not been disclosed. The new subsidiary will expand sale of its products to other German OEMs and parts manufacturers as well.
|Nishikawa Rubber Co., Ltd.||
Third weatherstrip manufacturing plant starts operations in July 2015Nishikawa Rubber Co., Ltd. has built a third plant next to the two existing plants that belong to Nishikawa Cooper LLC in Indiana. The new plant, for manufacturing weatherstrips, started operations in July 2015. The two existing plants were operating at full capacity due to a sharp surge in orders. The company expects a steady increase in orders and decided that a third plant was necessary. The plant cost JPY 500 million, and is responsible for final assembly of rubber parts manufactured at the other two plants. The company plans to boost its sales in the United States from JPY 23 billion in FY 2015 to JPY 26 billion in FY 2018.
Switching hose clamp supply from Japan to local U.S. sourcesPiolax, Inc. (Piolax) invested JPY 1 billion in building a large manufacturing facility in Piolax Corporation's plant in Georgia and started hose clamp production there in the fall of 2015. The company has switched the hose clamp supply from Japan to local production in the United States. It plans to increase hose clamp sales 50 percent to JPY 1.5 billion in FY 2017 from FY 2015. Piolax will supply its products to non-Japanese OEMs as well as Japanese OEMs. It will also increase production of metal fasteners and other automotive parts.
|Fine Sinter Co., Ltd.||
A new Toyota TNGA-compatible plant established, production capacity doubledFine Sinter Co., Ltd. (Fine Sinter) has purchased a site next to the existing American Fine Sinter Co., Ltd. (Ohio) plant, and will build a new plant there in the summer of 2016. The company will equip the new plant with the newest facilities to make it compatible with Toyota's new design architecture, the Toyota New Global Architecture (TNGA). The plant will manufacture engine and transmission parts with a monthly capacity of 1.2 million units, double the present quantity. The company will also start producing shock absorber parts in the new plant. Fine Sinter will invest JPY 2.7 billion and plans to sell products to OEMs other than Toyota as well.
Increasing production capacity of radial tires for passenger cars, building a new seat pad plantBridgestone Corporation (Bridgestone) is increasing production capacity of radial tires for passenger cars at Bridgestone Americas Tire Operations, LLC's Wilson plant in North Carolina. The company will invest USD 164 million in phased construction work over the next five years. It will invest USD 100 million in the first and second phases, which will start in the first half of 2016, and are for the purpose of building a new plant structure fitted with advanced production facilities and engineering technology. Bridgestone plans to increase daily capacity of radial tires for passenger cars from 32,000 tires in 2015 to 35,000 tires in 2018. The company will also start producing run-flat tires in 2016 that can be fitted on all-purpose rims.
|Bridgestone APM Company in Ohio will build a new Sanborn plant in New York, to manufacture energy absorbing seat pads for the automotive industry. It will be its third plant in the United States after the two in Ohio and Tennessee. The company will rent an existing building structure and invest USD 5 million in installing new equipment. Production will start in the first quarter of 2017 with full-capacity operations planned to start from June to August of the same year. Bridgestone mainly expects order from Japanese OEMs operating in Canada to increase.|
|Mitsubishi Heavy Industries, Ltd.||
Mass production of turbochargers starts in May 2015 at new plantMitsubishi Engine North America, Inc. (Illinois), Mitsubishi Heavy Industries, Ltd.'s subsidiary that sells engines and turbochargers in North America, built a new turbocharger manufacturing plant and started mass production in May 2015. The new plant adopts a shared factory system that uses production lines in the existing structure of the car air-compressor plant of Mitsubishi Heavy Industries Climate Control, Inc. (Indiana) and those in the newly added structure. Core parts are supplied from the company's subsidiary in Thailand, and these are assembled with exterior parts into finished products. The plant had an initial annual capacity of 600,000 units, and this will be increased to over 1.2 million units in the future.
|Mitsubishi Electric Corporation||
Increasing production capacity for making high-efficiency alternatorsMitsubishi Electric Corporation (Mitsubishi Electric) has built an additional structure at the plant operated by Mitsubishi Electric Automotive America, Inc. (Ohio) and fitted it with new equipment to strengthen its production capacity for high-efficiency alternators. Production was slated to start in January 2016. The company plans to produce approximately 1.3 million units in 2016 to meet the growing demand in the United States, where tougher fuel economy regulations were introduced. Mitsubishi Electric is investing JPY 4 billion in the project.
|Yokohama Rubber Co., Ltd.||
Mississippi tire plant for trucks and buses starts operations in October 2015, construction of a passenger car tire plant consideredIn October 2015, a new tire plant for trucks and buses started operations at Yokohama Tire Manufacturing Mississippi LLC (Mississippi). USD 300 million was invested in the plant, which has an annual capacity of 1 million tires. It occupies 2.3 million square meters, about one 25th of the entire premises. Yokohama Rubber Co., Ltd. plans to expand the plant in phases to meet demand. The company is also considering construction of a passenger car tire plant on the same premises, and will make a decision by FY 2017, which is the last year of its medium-term business plan. Production capacity of tires for relatively large passenger cars such as SUVs continues to be insufficient.
Second plant established in Alabama in October 2015, production slated to start in 2018In October 2015, Yorozu Corporation established its second plant in the United States, Yorozu Automotive Alabama, Inc. USD 117 million was invested in the new plant, which manufactures suspensions and related parts. It is equipped with the cutting-edge manufacturing facilities, including a large press for ultra-high tensile material, and performs integrated production from pressing through assembly. Operations will start in early 2018, earlier than initially planned. The company expects an order increase from its chief customer, Nissan, and plans to promote sales to new customers in the Southern part of the United States.
Strengthening business systems and making acquisitions in the U.S.: Sumitomo Rubber Industries, etc.
|Kosei Aluminum Co., Ltd.||
Supplying aluminum wheels to Honda for the first timeIn 2015 Kosei Aluminum Co., Ltd. started supplying aluminum wheels to Honda's plants in the United States and Canada. The supply is filled mainly from the company's plant in Thailand as it does not have a plant in North America. A monthly supply of 45,000 wheels is expected. This marks the first time the company's wheels are fitted to vehicles on the assembly line in North America. Until 2015 Kosei Aluminum was selling its products on the aftermarket.
|Shoei Co., Ltd.||
A touch panel sales company established in MichiganIn January 2015, Shoei Co., Ltd. established a sales company, Shoei U.S.A., Inc. (Michigan) staffed with a Japanese engineer and local personnel. The new company collects information about topics such as car makers' next-generation car navigation systems, as well as activities including sales and marketing of touch panels for automotive use.
|Suminoe Textile Co., Ltd.||
Acquired U.S. manufacturer, aiming for vertical integration of automotive textile business and sales expansionIn June 2015, Suminoe Textile of America Corporation (STA, South Carolina), a subsidiary of Suminoe Textile Co., Ltd., acquired Bondtex Inc. (Bondtex, South Carolina) as a wholly-owned subsidiary. Bondtex manufactures urethane lamination for automotive use and fabrics for medical use. Suminoe Textile had its urethane laminated seats and other automotive parts supplied by Bondtex and other American manufacturers. Bondtex is meant was acquired to expand business areas by vertically integrating operations, and also to explore sales to the American OEMs that Bondtex has been supplying its products to.
|Sumitomo Rubber Industries, Ltd.||
Alliance with Goodyear Tire & Rubber Co. dissolved, strengthening production of premium tires in the U.S.In October 2015, Sumitomo Rubber Industries, Ltd. (Sumitomo Rubber) and Goodyear Tire & Rubber Company announced the dissolution of their global alliance. As a result, Sumitomo Rubber acquired its joint-venture company, Goodyear Dunlop Tires North America, Ltd. (New York), and made its Buffalo plant a production base. The plant currently produces tires for passenger cars, trucks and motorcycles. The company will invest a little under JPY 10 billion in equipment to produce tires for SUVs and other high-performance vehicles that are increasingly in demand in North America. It will maintain the daily capacity of 15,000 tires while switching the items produced to premium tires. As part of the dissolution, Sumitomo Rubber Industries inherited the right to use the "Dunlop" brand on its tires for new vehicles produced by Japanese OEMs and motorcycles in North America. The company has also purchased the tire test course in Huntsville, Alabama, which is Sumitomo Rubber's first test course outside Japan. The company is also considering a new technical development site in North America.
|Nissin Kogyo Co., Ltd.||
Establishing JV companies with the Swedish company Autoliv to strengthen brake control businessIn September 2015, Nissin Kogyo Co., Ltd. announced plans to form JV companies with Autoliv, a Swedish manufacturer, and its subsidiaries in Japan, the U,S., China, and Thailand to strengthen its brake control and application business for automobiles. The JVs, which are slated to be established by the end of March 2016, will be owned 51% by Autoliv and 49% by Nisshin Kogyo. It will allow Nissin Kogyo to utilize Autoliv's electronic control unit and laser sensing technologies along with its customer base of global OEMs.
|Nichirin Co., Ltd.||
Transferring production of hydraulic power steering hoses from the U.S. to JapanNichirin Co., Ltd. (Nichirin) is transferring production of low-pressure hoses for low-pressure power steering systems from its U.S. subsidiary, Nichirin Tennessee Inc. in Tennessee to Japan. As the yen continues to weaken, the company decided production in Japan would be more competitive. The company will invest JPY 200,000 in its subsidiary, Nichirin Hakusan Co., Ltd. in Tsu City and build a new plant there. The new plant is slated to start operations in 2016 and have monthly sales of JPY 10,000,000. It intends to increase monthly sales to JPY 23,000,000 within a few years.
|Marujun Co., Ltd.||
Quitting autobody press parts business in North America, transferring fixed assetsIn September 2015, Marujun Co., Ltd. announced that it will discontinue its North American operations. Its U.S. subsidiary, Indiana Marujun Corporation (Indiana), which manufactures and sells autobody press parts, suffers from poor profitability due to issues like cost increases resulting from low productivity and quality problems. Marujun will discontinue the subsidiary's operations at the end of November 2016. Its fixed assets (ground, structures, manufacturing equipment) will be transferred to Toa Industries Co., Ltd., which manufactures suspension parts.
Strengthening R&D facilities and building new offices in the U.S.: Kasai Kogyo and Yokohama Rubber
|Kasai Kogyo Co., Ltd.||
Increasing development personnel in the U.S., bolstering test facilitiesThe company is investing JPY 1.5 billion to shift the headquarters of M-TEK (Tennessee) from Manchester City to Murfreesboro City, and to construct a new building. It is slated for start of operations in August 2016. In addition to enhancing headquarters functionality, the company also intends to strengthen corporate management and R&D functions in North America (including Mexico). Kasai Kogyo has plans to enhance its facilities for safety related tests such as performance in all kinds of environmental conditions and, side collisions. The company is giving consideration to increasing development personnel in the U.S. from the current 70 to a maximum of 100.
|Yokohama Rubber Co., Ltd.||
Building a tire development function in North AmericaIn March 2016, Yokohama Rubber Co., Ltd. appointed development managers and other personnel in North America and authorized them to do product development. The company will furnish necessary components for development like facilities in phases. The development facility will be built on the premises of a manufacturing site, and the location presented as a candidate is the bus and truck tire manufacturing plant in Mississippi that started operations in October 2015. The development personnel will be responsible for developing compatibility of both original equipment and replacement tires for passenger cars and trucks. Their main concern will likely be the all-season tires that are in great demand.
Consolidating production and strengthening existing plants in Canada: TS Tech and Bridgestone Corp.
|TS Tech Co. Ltd.||
Seat production in two plants consolidated into one to enhance profitabilityTS Tech Co., Ltd. expanded the structure of the plant belonging to its Canadian subsidiary, TS Tech Canada Inc. in Ontario, by approximately 1.7 times. A new line was installed in the plant to manufacture seats for the all-new Honda Civic. The company invested nearly half a billion yen in the expansion and line installation project, and work was completed in October 2015. The welding and sub-assembly processes were also transferred from the Trimont plant in Ontario to integrate seat manufacturing in the same plant. Part of the external warehouses was also moved to the extended structure to minimize distribution and labor costs. These changes resulted in a 20 percent reduction to production costs and 30 percent higher production efficiency. Parts for manufacturing automobile seats are supplied by a TST Manufacturing De Mexico (Guanajuato) plant in Mexico.
Increasing radial tire production capacity for passenger cars and light trucksBridgestone Corporation's Canadian subsidiary, Bridgestone Canada Inc. (Ontario), will increase production capacity to manufacture radial tires for passenger cars and light trucks at its Joliette plant (Quebec). Bridgestone Corporation is investing USD 250 million in facility enhancement work that is slated to start in 2016 and be completed in phases over five years through 2021. The company plans to increase the daily capacity from 17,000 tires in 2015 to 20,000 tires in 2023. The main product will be large-diameter tires for pickup trucks and SUVs, which are in great demand in North America.
<Automotive Industry Portal MarkLines>