Japanese Suppliers in East China: Responding to NEV market expansion

Increase of production and sales of components and materials for electric vehicles

2019/05/30

Summary

華東周辺
China automobile plant map (Click to open site map)
East China automobile plant map

 This report presents the trends of Japanese suppliers in East China. (Based on sources dated roughly over the 15-month period between February 2018 and April 2019.)


 The automobile production volume in China in 2018 was 27.81 million units (a decrease of 4.2% from the previous year) and sales volume (factory shipments) was 28.08 million units (a decrease of 2.8% from the previous year), showing a slowdown in market growth. The main factors for the slowdown are the impact of the US-China trade war and the reaction to the last minute demand surge at the end of 2017 before the end of the tax reduction policy for small passenger cars. By vehicle type, the sales of SUVs decreased 2.5% from the previous year, to 9.995 million units and sedan/hatchback sales dropped 2.7% to 11.528 million units. The sales decline in the latter half of the year was especially precipitous; sales in every month from July decreased below the previous year’s results.

 On the other hand, sales of EVs, PHVs, and other NEVs (new energy vehicles) increased significantly in this period to 1.256 million units, an increase of 61.7% over the previous year. From January 2018, the Chinese government implemented a policy based on its “Notice for Tax Exemption for Purchase of New Energy Vehicles” which exempts NEVs from the vehicle purchase tax. At the same time, the vehicle purchase tax rate applied to passenger cars with engine displacements less than 1.6 liters returned to 10%. In addition, an NEV credit system was applied to companies with annual production and sales of ICE vehicles (gasoline vehicles, diesel vehicles, natural gas vehicles, and hybrid vehicles) over 30,000 units per year, accelerating the introduction of new NEV models and system development.


 The East China region is home to SAIC, the largest automobile group in China. Further, the headquarters of the Chinese OEM Geely Group is in Zhejiang province; Chery, the Chinese OEM with the largest export volume is in Anhui province as is Anhui Jinghuai Automobile (JAC) which formed a joint venture with Volkswagen for EVs. In addition, other OEMs including emerging EV maker NIO, FMC (Future Mobility Corporation) which manufactures models of the Byton brand, and WM Motor (Weltmeister Motor Technology Company, Ltd.), have their headquarters in the East China region.

 In March 2019, Daimler and Geely announced joint development of the next generation EV Smart with production in China at a dedicated plant. In 2018, the VW Group unveiled the “SOL E20” EV with Anhui Jianghuai Automobile (JAC), and further announced the development of a smart mobility platform with VW-subsidiary Mobility Asia Smart Technology Co., Ltd. (Mobility Asia) and JAC in Hefei city. Tesla built a plant with a single investment in the Shanghai Lingang district. SAIC and Huawei signed a strategic alliance agreement to work together on electrification and intelligent manufacturing. FMC, which acquired Tianjin FAW Huali Automobile Co., Ltd., will move its manufacturing base to Nanjing and plans to manufacture Byton models there by the end of 2019.


 In response to these NEV related activities, Japanese automotive components manufacturers are increasing their production and sales of components and materials for electric vehicles such as EVs and PHVs. Nidec’s dedicated E-Axle plant operation, Sanden Holdings’ expansion of electric compressor production, and Mitsubishi Chemical and Ube Industries consolidation of lithium-ion battery electrolyte production are all evidence of this trend. Also, for the future, Panasonic, for automotive lithium-ion batteries, and Meidensha, for motors and inverters, are reported to be considering local production of EV components. There is also movement to respond to the increased demand for plastic products accompanying electrification and weight reduction; the Teijin Group will build a new plant for automotive resin products.

 

Trends of Japanese Suppliers (* denotes new product introduction)

New company (plant)
Establishment / operation / investment
Jiangsu province JATCO Ltd. (CVT: new company + new plant)
Toyota Boshoku Corporation (Interior materials: new company + new plant)
Dowa Holdings Co., Ltd. (Tin plating: new company + new plant)
Mitsubishi Chemical Corporation / Ube Industries, Ltd. (Electrolytes for Lithium ion battery: new company, production consolidation)
MEC Company Ltd. (Chemicals for electronic substrates + new plant)
Shandong province Nittan Valve Co., Ltd. (Engine valves: establishment of new plant)
Anhui province Aisin Seiki Co., Ltd. (Aluminum die cast parts for automatic transmissions: new company + new plant)
Production capacity
expansion
Capital increase for production lines, equipment, etc. Shanghai Mitsubishi Heavy Industries, Ltd. (Turbochargers: facilities expansion)
Jiangsu province NTN Corporation (Constant velocity joints: new line installed
Kogi Corporation (Castings for automotive press dies: equipment expansion)
Nichicon Corporation (Film capacitors for EVs: production expansion)
NGK Spark Plug Co., Ltd. (* Wide-range air-fuel ratio sensors: production started, new line installed)
Nippon Piston Ring Co., Ltd.  (Piston rings: new line installed)
Hakkai Inc. (Plastic parts: equipment expansion)
Panasonic Corporation (*Automotive Lithium-ion batteries: considering 2 plants)
Mitsui Kinzoku ACT Corporation (Side door latch: new line installed)
Musashi Seimitsu Industry Co., Ltd. (Differential case: equipment expansion)
Zhejiang province Aichi Steel Corporation (Motor magnet processing: equipment expansion)
Kobe Steel, Ltd. (Cold-forging wire: equipment expansion)
Anhui province TPR Co., Ltd. (Diesel engine cylinder liners: new line installed)
Plant expansion, building expansion Shanghai Sanden Holdings Corporation (Electric compressors: relocation, new plant)
Jiangsu province Iriso Electronics Co., Ltd. (* Automotive connectors: new plant)
Envision AESC (Automotive rechargeable batteries: new plant)
Teijin Limited (Plastic products such as battery cases: new plant)
Daikin Industries, Ltd. (* Fluoro-chemicals: new plant)
Nichias Corporation (Insulators: relocation, new plant)
Nichirin Co., Ltd. (Automotive hoses: relocation, new plant)
Primearth EV Energy Co., Ltd. (Automotive nickel metal hydride battery modules: building expansion)
Zhejiang province Ogura Clutch Co., Ltd. (Clutches for vehicle air conditioners: new plant)
Nitto Seiko Co., Ltd. (High value-added screws: new plant)
Nidec Corporation (E-Axle: new plant)
Meidensha Corporation (Motors and inverters for electric vehicles: considering production system)
Anhui province TPR Co., Ltd. (* Plastic seal rings for automatic transmissions: new plant)
Business structure strengthening
(Plant acquisition, joint ventures, bases for development / sales / testing)
Shanghai Keihin Corporation (Products for EVs: establishment of sales office)
Sekisui Chemical Co., Ltd. (Materials for electronics: established technical service center)
Toyoda Gosei Co., Ltd. (Changed regional headquarters to holding company)
Nippon Piston Ring Co., Ltd. (Piston rings: expansion of technical service office)
Piolax, Inc. (Established sales headquarters, established design and development department)
Mabuchi Motor Co., Ltd. (Established headquarters)
Jiangsu province Eagle Industry Co., Ltd. (Seals for EV motors: establishment of research and development base)
Tokai Rika Co., Ltd. (Switches, seatbelts, etc.: establishment of sales and technical bases)
Toyoda Gosei Co., Ltd. (Safety systems, interior components: merger of subsidiaries)
MinibeaMitsumi Inc. (* Sensors for automotive motors: production started, establishment of development base)
Zhejiang province Aisin AW Co., Ltd. (Automatic transmission components: establishment of joint venture company)
Sumitomo Riko Co., Ltd. (Anti-vibration rubber, automotive hoses, etc.: establishment of sales headquarters)
Di-Nikko Engineering Co., Ltd. (Parts procurement: establishment of joint venture company)
Jiangxi province Central Glass Co., Ltd. (Electrolyte materials for Lithium-ion batteries: establishment of joint venture company)
Mabuchi Motor Co., Ltd. (Steel material processing for small electric motors: acquisition)
Other
(production transfer, production reduction, etc.)
Jiangsu province Sanyo Chemical Industries, Ltd. (Additives for paints: transferred to Thailand)
Zhejiang province Fujikura Composites, Inc. (Automotive rubber: delayed construction of new plant)
Shandong province Nihon Parkerizing Co., Ltd. (Heat treatment processing: reduction in investment)
Anhui province Ahresty Corp. (Die castings: reduced production)

 

Related Reports:
2019 Sales Forecast in China (CAAM): NEVs to make up 1.6 million of 28.1 million vehicles sold (Apr. 2019)
2018 China market: 28.081M units for new car sales, 23.71M units for passenger cars (Feb. 2019)

<Japanese Supplier Reports>
  Japanese suppliers in Western Europe: Meeting increasing demands for electrification and others (May 2019)
  Japanese suppliers in India: Meeting tighter emissions and fuel economy regulations (Nov. 2018)
  Japanese Suppliers in Mexico: Focusing on Changes to NAFTA (Oct. 2018) 
  Japanese suppliers in the U.S. and Canada: Strengthening of operations (Sep. 2018) 
  Japanese parts suppliers in ASEAN: Responding to the increase in global market demand (Oct. 2018)
  Japanese parts suppliers in Central and Eastern Europe: Expand business with European companies (Feb. 2018)

 



Shanghai: Plant relocation/new establishment (Sanden), equipment expansion (Mitsubishi Heavy Industries), sales expansion/business reinforcement (Keihin, Toyoda Gosei, Piolax, Mabuchi Motor, etc.)

Keihin Corporation Sales office opened in Shanghai
In August 2018, Keihin Corporation’s Chinese subsidiary, Dongguan Keihin Engine Management System Co., Ltd. opened a sales office (Shanghai Branch) in Shanghai. With the rapid growth of the electric vehicle market in China, the company plans to increase sales of components for electric vehicles such as power control units and battery management systems by submitting timely technical proposals matching the OEMs’ needs through local sales activities in the region.
Sanden Holdings Corporation Relocated and newly built Shanghai plant to increase production of electric compressors
In July 2018, Sanden Holdings Corporation’s Chinese joint venture company, Sanden Huayu Automotive Air Conditioning Co., Ltd., completed construction of its new plant, Huayu Sanden Heqing New Plant, in the Pudong New Area, Shanghai. With the corporate management functions in the Huangpu District of Shanghai and the manufacturing facilities of the Shilong Plant in the Xuhui District of Shanghai being relocated / newly built, corporate functions will be completely transferred to the new plant in March 2018; from April production and sales of the PX compressor will begin at the new plant; and from August the electric compressor will be produced. The new plant has an area of 116,000 square meters, and total building floor space is 105,000 square meters. Production capacity is 15 million units per year. Previously, Sanden Huayu developed and manufactured compressors for customers in China at the Shilong Plant but with an increase in sales the facilities became cramped, so the company decided to move to a new plant. The transfer of production and development facilities from the Shilong plant is planned to be completed in 2019.
Sekisui Chemical Co., Ltd. Electronics materials technical service center established in Shanghai
In October 2018, Sekisui Chemical Co., Ltd. established its “Electronic Materials Technical Service Center” for the evaluation of electronic products within the facilities of its Chinese affiliate, Sekisui Polymatech (Shanghai) Co., Ltd. Evaluations and prototyping of sealing agents and adhesive tapes for electronic components will be conducted. In addition to responding quickly to Chinese customers’ evaluation requests, the company will propose products and technologies to increase sales in this field. Further, a showroom for automotive electronics products will be set-up on the same site, and the car electronics area, where the market is expanding with the background of the shift to EVs and autonomous driving, is being developed.
Toyoda Gosei Co., Ltd. Chinese regional headquarters changed to holding company
In December 2018, Toyoda Gosei Co., Ltd. changed the company structure of its Chinese regional headquarters, “Toyoda Gosei (Shanghai) Management Co., Ltd.”, to a holding company, “Toyoda Gosei (Shanghai) Investment Co., Ltd.”, and will expand airbag production. In addition to the three production bases for airbags in Tianjin, Zhangjiagang, and Foshan, the other local major production subsidiaries will become part of the new company. There is a move to strengthen safety standards in emerging countries, and by accelerating business decisions in the China market and promoting efficient business operations, the company aims to expand business focusing on production and sales of automotive components.
Nippon Piston Ring Co., Ltd. Shanghai office established
In August 2018, Nihon Piston Ring Co., Ltd. established an office in Shanghai with an aim to expand technical services to existing customers and to acquire new customers. Besides introducing simple equipment for quick product evaluations and engine bench systems, resident engineers will be staffed there. In 2005, the company set up NPR Auto Parts Manufacturing (Yizheng) Co., Ltd. to expand its production scope as well as to promote sales to Chinese OEMs.
Piolax, Inc. Establishes sales headquarters in China as well as design and development
In January 2019, Piolax Inc. incorporated a Shanghai sales office and established it as its sales headquarters (Shanghai Piolax Co., Ltd.) in China. The company established sales branches in Guangzhou and Wuhan, and with its Shanghai and Tianjin branches aims to expand sales throughout China. In addition, a design and engineering department was set up at Shanghai Piolax, to set up a system to share within the company information in the CASE field, in which OEMs are actively working and technological innovations in the Chinese market are progressing, and to follow the latest engineering trends.
Mabuchi Motor Co., Ltd. Headquarters for China business established to build sales expansion system and accelerate decision making
In March 2019, with the intention to strengthen its China business, Mabuchi Motor (Shanghai) Co., Ltd. changed its trade name and established its headquarters company, Mabuchi Motor (Shanghai) Management Co., Ltd. Along with building a sales expansion system centered on the Chinese market, the company plans to accelerate its decision making for China business.
Mitsubishi Heavy Industries, Ltd. Turbocharger production increased at Shanghai plant, cartridge production introduced
In order to expand its automotive turbocharger business, Mitsubishi Heavy Industries, Ltd. increased production at its Shanghai plant and introduced there the production of cartridges, and the core components of turbochargers. The company had been supplying cartridges manufactured at its plants in Japan (Sagamihara) and Thailand to SMTC (Shanghai MHI Turbocharger Co., Ltd.) for final assembly. The cartridge production line was set up at the third plant in Shanghai and production commenced in FY2018. In addition, at both Sagamihara and Thailand, the final assembly and cartridge production lines were expanded. The turbocharger market is expected to grow with the diffusion of automobiles in emerging countries along with environmental concerns. Mitsubishi Heavy Industries is proceeding with facility investments to achieve approximate annual production of 10 million units, and will strengthen its global turbocharger production system. (From August 2018 report)


Jiangsu province: Establishment of new plants (Toyota Boshoku, JATCO), plant expansions (Teijin, Envision AESC), facilities enhancements (NTN, Nichicon, NGK Spark Plug, etc.)

Eagle Industry Co., Ltd.

R&D bases in China and Europe, expanding seal materials for EV motors
Eagle Industry Co., Ltd. will strengthen its research and development functions in anticipation of the expansion of EVs. In 2019, the company will establish R&D bases for next-generation automobiles in China and Germany, and it will work on the development of products including mechanical seals for EV motors. In China, the company established Eagle Sealing R&D (Wuxi) in Wuxi, Jiangsu province.
Iriso Electronics Co., Ltd. Automotive connectors plant established in Nantong
In April 2018, Iriso Electronics Co., Ltd. completed construction of its new plant in Nantong city, Jiangsu province, and commenced production. The plant features use of IoT in its new production system. The company will manufacture automotive connectors at the plant. This is the company’s fourth overseas production base. (From April 2019 report)
NTN Corporation New constant velocity joint production line set up at Nanjing subsidiary; development for emerging EV manufacturers
NTN set up a new constant velocity joint production line at Nanjing NTN Corporation, its subsidiary company in Nanjing city, Jiangsu province. The company will supply constant velocity joints and hub bearings to new EV manufacturers for models planned to start production in 2019. The Nanjing city government is committed to the promotion of the EV industry, and recommends local procurement of components to EV manufacturers located in the city. With this background, NTN’s constant velocity joints from its plant in Nanjing were adopted. NTN is also supporting emerging EV manufacturers; it has been supplying constant velocity joints to NIO since 2017, and in 2018 the company signed a licensing agreement for EV in-wheel motor technology with Changchun Fawsn Auto Tech Co., Ltd. (FSAT). (From March 2019 report)

Envision AESC
(formerly Automotive Energy Supply Corporation)

Establishes development base and new plant for automotive secondary batteries in Wuxi
Envision AESC, a subsidiary of Envision Group, a major renewable energy company in China, announced the establishment of a development base and a new plant for secondary automotive batteries in Wuxi city, Jiangsu province. Production will begin from the end of 2020, and by 2023 annual production capacity will reach 20 gigawatt-hrs. The company had a 6% share of the global automotive secondary battery market in 2018, and plans to exceed a 20% share in the future. Envision AESC’s predecessor company was Nissan’s subsidiary Automotive Energy Supply Corporation (AESC). The sale of the business to Envision Group was completed at the end of March 2019. Nissan maintains ownership of 20% of the shares of Envision AESC, and Envision Group owns 80%. (From April 2019 report)
Kogi Corporation Increases production of automotive press die castings at Nantong plant
Kogi Corporation, a joint venture of Okaya Co., Ltd., invested an additional JPY 200 million at its Nantong plant (Nantong city, Jiangsu province) which manufactures automotive press die castings. The investment is for enhanced facilities in response to increased demand for foaming process equipment and cranes. The plant, which started operations in June 2017, has been steadily increasing production, surpassing the monthly production of 1,000 tons from its initial plan, and exceeding 2,000 tons in February 2018. (From March 2018 report)
Sanyo Chemical Industries, Ltd. Paint additive production transferred to Thailand, effect of more stringent environmental regulations in China
In the middle of 2019, Sanyo Chemical Industries, Ltd. will transfer its paint additives production from its Nantong city plant in Jiangsu province to an existing plant in Thailand. Until now, local contractors collected the large amounts of waste liquids discharged in the production process, but it had become difficult to deal with the higher costs of removal due to increased stringency of environmental regulations as well as contractors closing their businesses. In 2018, a tax system corresponding to the amounts of pollutants and emissions was introduced increasing the cost burden of companies entering the market. (from February 2019 report)
JATCO Ltd. New CVT plant established in Suzhou
JATCO announced the establishment of its second continuously variable transmission (CVT) base in China, JATCO (Suzhou) Automatic Transmission Ltd., in Jiangsu province. Responding to the increased demand for CVTs in the China market, the company increased its production capacity. The amount of capital investment is JPY 6.4 billion. Production will begin by the end of 2019, annual production capacity will be 480,000 units, and there will be about 1,000 employees. The plant will manufacture the JATCO CVT08 transmission for medium and large front-engine/front drive vehicles.
Daikin Industries, Ltd. New fluorine chemical plant in Jiangsu, breaking into EV market
Aiming for 2022, Daikin Industries, Ltd. will invest JPY 50 billion in a new chemical plant in Changshu city, Jiangsu province. The plant will produce fluorine chemicals used in automotive lithium-ion batteries and in semiconductor manufacturing. The company plans to invest a total of JPY 100 billion in Japan and overseas by the same year to expand its fluorine chemicals business. In particular, the demand for semiconductors for fifth-generation communications (5G) equipment will expand and demand in China, expected to be the largest market in the world for EVs, will accelerate. (from February 2019 report)
Teijin Limited New plant in Changzhou for plastic automotive components
CSP-Victall, a Chinese joint venture of Teijin Limited’s Continental Structural Plastics (CSP), announced in January 2019, the establishment of a second plant in the Changzhou International High-Tech Industrial Zone in Changzhou, following the plant in Tangshan city. Changzhou is located in the Yangtze River delta, where not only European and American OEMs including GM and VW, but also leading Chinese manufacturers, such as Contemporary Amperex Technology Co., Ltd. (CATL), Jiangling Motors Co., Group (JMCG), and SAIC Motor Corporation Limited are gathered. Since 2015, CSP-Victall has been manufacturing in Tangshan city automotive composite products and GF-SMC, a molding material in sheet form made by impregnating a thermosetting resin with glass fibers as an intermediate material. With the construction of its new second plant, the company will actively introduce various products to the China market including battery boxes for EVs, which are expected to grow rapidly in China, as well as automotive exterior components and parts for pick-up trucks.
Tokai Rika Co., Ltd. Establishing sales engineering base in Wuxi
Tokai Rika Co., Ltd. established a new wholly-owned company in Wuxi, Jiangsu province, Tokai Rika (Jiangsu) Automotive Parts Co., Ltd., as a sales engineering base. Operations began in January 2019. This is the company’s fourth location in China. By establishing a new sales technology base independent of the production base, the company will build a system that can respond more quickly and positively to the needs of the Chinese market than possible up to now. The investment amount is USD 2 million (JPY 220 million). Tokai Rika has production bases for switches and seat belts in Tianjin, Wuxi, and Foshan; of which 70% are for Toyota. At the newly established facility, the company is aiming to increase business with foreign-affiliated OEMs such as Ford and fast-growing local OEMs in China.
Toyota Boshoku Corporation Establishes new company in Yancheng city for the manufacturing and sales of interior materials
Toyota Boshoku Corporation announced that its Shanghai consolidated subsidiary, Kawashima Textile Manufacturers (Shanghai) Ltd., set up a new subsidiary, Kawashima Automotive Parts Jiangsu Co., Ltd., for the manufacture and sales of interior materials for transportation equipment in Yancheng city, Jiangsu province. The amount of capital investment is CNY 50 million (about JPY 842 million). The new company will have an integrated production system, from raw yarn to fabric and seat cover sewing, and will have a process that can handle business expansion.
Toyoda Gosei Co., Ltd. Merger of 2 production subsidiaries in China
Toyoda Gosei Co., Ltd. decided to merge two production subsidiaries in Jiangsu province: Toyoda Gosei (Zhangjiagang) Co., Ltd. (TGZ) and Toyoda Gosei (Zhangjiagang) Plastic Parts Co., Ltd. (TGZPP). TGZ, which handles safety system products, will become the surviving company, and TGZPP, which manufactures interiors and exteriors, will be absorbed. After the merger, the integrated company will produce safety system products as well as interiors and exteriors; the company will supply its products mainly to Toyota and other Japanese OEMs in China.
Dowa Holdings Co., Ltd. New plant and expansion of tin plating business in Nantong
Dowa Holdings Co., Ltd. announced that its subsidiary, Dowa Metaltech Co., Ltd., will establish a wholly-owned Chinese subsidiary for the tin plating of rolled copper products in Nantong City, Jiangsu Province. Capital investment is USD 1.5 million (about JPY 165 million). Operations are scheduled to start in October 2019 with a monthly processing capacity of 500 tons. The company established the plant in response to a growing demand for tin plating of connectors for in-vehicle electronic devices in the expanding and high quality Chinese automobile market.
NGK Spark Plug Co., Ltd. Production of wide-range air-fuel ratio sensors to meet increased demand due to introduction of China6 regulations
NGK Spark Plug Co., Ltd. began the production of wide-range air-fuel ratio sensors at its production subsidiary’s plant in Changshu, Jiangsu province from February 2019. In addition, the company plans to introduce a second production line, to be in operation from June 2020. The production capacity of each line is 3.5 million units per year, and the capital investment per line is JPY 1 billion. This is the third country of production of this product, after Japan and the US. The product to be made in China, ZFAS-U3, is the newest model and it can measure automobile exhaust gas oxygen more precisely. The responsibility for the molding of the element, including firing, will be in Japan, and the Changshu plant will be in charge of final assembly only. The company is the second largest supplier of oxygen sensors in the world, after Bosch. In preparation for the implementation of China6 emission regulations in 2020 in China, the full-range air-fuel ratio sensor will be more competitive with local production, and will capture the demand for switching from conventional oxygen sensors due to the more stringent regulations. (From January 2019 report)
Nippon Piston Ring Co., Ltd. Reinforcement of piston ring production with introduction of new line
Nippon Piston Ring Co., Ltd. will set up a new line for piston ring production at NPR Auto Parts Manufacturing (Yizheng) Co., Ltd. in Jiangsu province from the latter half of 2018 until 2019. The line will be identical to the line at the company’s subsidiary in Ichinoseki city, Iwate prefecture, Japan, and the production cost can be reduced about 30%. Component parts which had been made previously in separate processes can be produced with the same equipment, with common process jigs, more efficient inspections, and automated product delivery. (From March 2018 report)
Nichias Corporation Suzhou plant relocated, insulator production increased
Nichias Corporation has increased the production of heat shield insulators which protect heat from engines at its China subsidiary Suzhou Shuangyou Auto Parts Co., Ltd. and its Yuki plant in Shimotsuma city in Ibaraki prefecture, Japan. The production system will be reinforced due to steady overseas demand mainly in North America. Suzhou Shuangyou Auto Parts Co., Ltd. was located in a city area and was ordered to relocate by Chinese authorities; the company will build a new plant in a neighboring area with an investment of JPY 2.5 billion by January 2019. The production capacity of insulators will be increased with the relocation. (From August 2018 report)
Nichicon Corporation EV capacitor production capacity to be tripled
Nichicon Corporation will begin production of film capacitors for EVs at its Suqian plant in Jiangsu province in FY2020. A new building for the same capacitors is planned at the Suqian plant. By 2025, production capacity of the capacitors will be 3 times the present level. Among the company’s sales of capacitors, 7% are film capacitors for EVs, and this will increase to 20 to 30% in the future. In the world’s largest EV market, the company plans to meet demands from local Japanese and Chinese OEMs. (From April 2019 report)
Nichirin Co., Ltd. New Plant in Jiangsu, production transfer from Shanghai
Nichirin, responding to Shanghai’s city planning, transferred production of air conditioner hoses and brake hoses from Shanghai Nichirin Automobile Accessories Co. Ltd. to a new plant established in Changshu city, Jiangsu province. Along with construction of the new plant, the company set up a new joint venture, Suzhou Nichirin Automobile Parts Co., Ltd. with the existing joint venture, Shanghai Beicai Industry Co., Ltd. Operations are planned to begin in June 2019. Production capacity will be increased to about 1.5 times the current level. The existing Shanghai plant will be closed. (From February 2019 report)
Hakkai Inc. Increase production of automotive plastic parts in China and Mexico
Plastic parts maker Hakkai Inc. will increase the production of automotive components at its plants in China and Mexico. The company will increase the number of injection molding machines at both plants and from the fiscal year ending December 2018 will increase shipments by 30 to 50% on a value basis. Its Chinese plant in Jiangsu province will increase the production of automotive components and parts installed in electrical equipment. The company will respond to the growing demand for air conditioning in line with the increase in local Japanese OEM vehicle sales and Chinese government policy. At the Jiangsu plant the number of injection molding machines increased by 20%, to 35 units. (From March 2018 report)
Panasonic Corporation Considering production of automotive batteries at 2 plants in Jiangsu
Panasonic is considering the production of batteries installed in vehicles including EVs at two plants in Jiangsu province (Wuxi and Suzhou). The plants in Jiangsu are presently manufacturing lithium ion batteries for notebook PCs, but the company is considering switching to automotive batteries or setting up a new production line. The aim is to establish a production system in China where environmentally friendly vehicles are expected to grow. (From March 2018 report)
Primearth EV Energy Co., Ltd. (PEVE) Expanding production capacity of nickel metal hydride batteries for hybrid vehicles
Toyota subsidiary Primearth EV Energy Co., Ltd. (PEVE) will build a 2nd new factory building on a site adjacent to the plant if its Chinese affiliate Corun PEVE Automotive Battery Co., Ltd. in Changshu city, Jiangsu province. With a capital investment of JPY 16 billion, operation is scheduled to start in the first half of 2020. The new plant will have an annual production capacity of 110,000 car sets. This is expected to double the company’s production capacity over the present level. In order to respond to the growing demand for hybrid vehicles (HV) in China, the company is planning to increase the production capacity of automotive nickel metal hydride battery modules.
Mitsui Kinzoku ACT Corporation New door latch line introduced in Wuxi plant, tact time reduced
Mitsui Kinzoku ACT Corporation introduced a new production line at its production subsidiary in Wuxi, Jiangsu province, Wuxi Dachong Industry Co., Ltd. The special feature of the line is the use of conductive magnets which can speed up the movement of work pieces between work stations; tact time can be reduced compared to the previous production line. Because all process can be automated, the company is able to cope with shortages of labor or rising labor costs. Operation commenced in 2018, and door latches for 1.7 million vehicles per year will be produced for Japanese OEMs. (From April 2018 report).
Mitsubishi Chemical Corporation / Ube Industries, Ltd. Joint venture established for lithium ion battery electrolytes, supply system improved
In January 2018, Mitsubishi Chemical Corporation and Ube Industries Ltd. established a joint venture company in China, Changshu UM Battery Materials Co., Ltd., for lithium ion battery electrolyte business. Fifty percent of Mitsubishi Chemical’s shares in its electrolyte subsidiary were transferred to Ube Industries, forming the joint venture. Ube Industries will close its manufacturing plant and consolidate at the former Mitsubishi Chemical’s Changshu city, Jiangsu province plant; annual electrolyte production capacity will double to 20,000 tons. Technical capabilities and cost competitiveness will be strengthened by utilizing the intellectual properties and development capabilities of both companies.
Mitsubishi Chemical aims to increase its global production capacity of lithium ion battery electrolytes by 2.8 times to 120,000 tons per year by FY2020. The company will strengthen its existing plant in Memphis, Tennessee, USA, and re-start operations at its UK plant in Stockton-on-Tees.
MinibeaMitsumi Inc. Production of automotive motor sensors, development bases in China and Europe
From October 2018, MinibeaMitsumi Inc. commenced the production of sensors for EV drive motors in China. The company is producing the sensors called “resolvers” that measure the angle of the main shaft and control the motor at its plant in Thailand, but will manufacture the products for electric drive motors at its Wujiang plant, in the suburbs of Shanghai. In addition, in October 2018, the company will set up a development base for motors and other automotive components in Suzhou. Together, the capital investments in China will reach JPY 3 billion over 3 years. The company will also build a new European development base for automotive motors in Slovakia. MinibeaMitsumi is aiming for sales in the fiscal year ending in March 2020 of JPY 1 trillion, and operating income in the fiscal year ending March 2021 of JPY 100 billion as mid- and long-term targets. (From June 2018 report)
Musashi Seimitsu Industry Co., Ltd. Integrated production of differential cases at Nantong plant
Musashi Seimitsu Industry Co., Ltd. will strengthen its production system of Musashi Seimitsu Auto Parts (Nantong) Co., Ltd. in Nantong city, Jiangsu province. This manufacturing base was only processing differential cases, but equipment will be installed so that production will be integrated, from the production of gears from component parts to assembly.
The company has received orders from Chinese OEM BYD for ball joints, and will begin to supply the parts in 2018. In the medium to long term, the company will expand its local supply system by increasing the types of parts such as ball joints produced at the plant in Nantong. (From March 2018 report)
MEC Company Ltd. New production company established for chemicals for electronic substrates, responding to automobile electrification
MEC Company Ltd. announced the establishment of a production subsidiary in Changshu city, Jiangsu province, MEC China Specialty Products (Changshu), for chemicals used in the manufacturing of electronic substrates and other components. The installation of package substrates is increasing along with smartphones, PCs, and motor vehicle electrification. The company is responding to increased demand for chemicals essential to the manufacturing process. The plant will be established in November 2019, with commencement of operations scheduled in October 2020. The new plant production capacity will be about 3 times that of the company’s present subsidiary, MEC China Specialty Products (Suzhou) Co., Ltd. After the opening of the new plant, the existing plant in Suzhou city will be closed. 


Zhejiang province: Establishment of new company (Aisin AW), plant expansion (Nidec, Ogura Clutch, Nitto Seiko), facilities enhancement (Aichi Steel, Kobe Steel, etc.)

Aisin AW Co., Ltd. Establishes joint venture with Geely in Ningbo city, production of FF 6-speed AT
In October 2018, Aisin AW Co., Ltd. (Aisin AW) established a joint venture with Zhejiang Geely Luoyou Engine Co., Ltd. (Geely Engine), a subsidiary of Zhejiang Geely Holding Group Co., Ltd. The new company, Zhejiang Geely Aisin Automatic Transmission Co., Ltd. was set up in the Hangzhou Bay New District in Ningbo city with a total capital investment of USD 117 million (about JPY 12.7 billion); Aisin AW’s ownership share is 60% and Geely Engine’s share is 40%. In February 2020, production of 6-speed automatic transmissions for front-engine front-drive vehicle use will begin; annual production capacity will be 400,000 units.
Aichi Steel Corporation Additional investment in Zhejiang Aichi Electric, magnet production to be increased and manufacturing and sales base to be enhanced
In March 2019, Aichi Steel Corporation increased its ownership share in Zhejiang Aichi Mechanical & Electrical Co., Ltd. (Zhejiang Aichi), which manufactures magnets for motors, with an additional investment of CNY 8 million (about JPY 140 million). The company is using 100% of the capital infusion to increase production capacity, expanding monthly production capacity from 800,000 units to 1,400,000 units. Increased production will begin in May 2019. Zhejiang Aichi mainly supplies motors for automotive power seats, but is also considering entering the EV motor market. Aichi Steel has been investing in Zhejiang Aichi since March 2018, and transferred integrated injection molding technology for magnets.
Ogura Clutch Co., Ltd. New dedicated plant for automotive air conditioner clutches
Ogura Clutch Co., Ltd.’s production subsidiary in China, Ogura Clutch (Changxing) Co., Ltd. in Lincheng Industrial Concentration Zone, established a second plant. The production of clutches for automotive air conditioners manufactured at the first plant will be transferred to the new, dedicated plant. Capital investment was JPY 1 billion. Production capacity is 1 million units per year, equivalent to the company’s plant in Dongguan city, Guangdong province. In addition to responding to increased demand in the Chinese domestic market, the company is considering supply of products to North and South America. The production of brakes and clutches for industrial machinery will be consolidated at the first plant. (From March 2018 report)
Kobe Steel, Ltd. Increased production of cold forging wire at Pinghu plant
With an investment of JPY 900 million, Kobe Steel, Ltd. will increase the production capacity at its special steel wires secondary processing base, Kobe Special Steel Wire Products (Pinghu) Co., Ltd. (Kobe Pinghu). Kobe Pinghu manufactures cold-formed wire used in automotive bolts, nuts, and bearing products. By March 2020, the company plans to increase the number of wire drawing machines by 3, and by June 2020 the number of heat treatment furnaces by 2. With the enhancements, monthly production capacity will reach 5,500 tons. The aim is to meet the local procurement needs of materials accompanying the expansion of automobile production in China.
Sumitomo Riko Co., Ltd. Established China automotive sales headquarters, aiming to expand sales to Chinese OEMs
In order to expand sales of anti-vibration rubber and automotive hoses to local Chinese OEMs, Sumitomo Riko Co., Ltd. established a new Chinese automotive sales headquarters in Jiaxing city in April 2019. Until now, most of the company’s products were delivered to Japanese OEMs, but the company will also approach Chinese OEMs and component suppliers. Sumitomo Riko is also considering local production of components for EVs around 2020.
Di-Nikko Engineering Co., Ltd. Joint venture for parts procurement established in Cixi city
Four automotive device makers and investment funds, including electronic parts manufacturer Di-Nikko Engineering Co., Ltd. and Ningbo Fuerda Smartech Co., Ltd., established a joint venture company in Cixi city, UMVA-China, for parts procurement, in operation from April 2018. An affiliated company of Di-Nikko Engineering contributed 5% (about JPY 60 million). Di-Nikko Engineering is manufacturing automotive related devices used in vehicle air conditioners and power windows in Wuxi city, Jiangsu province. Along with controlling the costs of automotive parts by joint purchasing, purchasing power is further enhanced and business with automotive suppliers will increase.
Nitto Seiko Co., Ltd. New plant for screws, shifting to high value-added automotive screws
Nitto Seiko Co., Ltd.’s subsidiary NPS (Nitto Precision Screw Industrial (Zhejiang) Co., Ltd.), established a new plant for screw production in Jiashan county. The investment amount was JPY 400 million, and operations are scheduled to begin in June 2020. With the operation of the new plant, the company plans to increase the production capacity of NPS by 1.5 times. The company will shift production from standard screw products in which price competition has become severe by the rise of local competitors to the production of high value-added screws for automobiles in which the demand for quality is high.
Nidec Corporation Dedicated plant for E-Axles starts production in Pinghu Industrial Area, second plant built
Nidec Corporation, in anticipation of the future Chinese EV market, built a dedicated plant for “E-Axle” traction motor systems in Pinghu Industrial Area, and production began in May 2019. The E-Axle is used in the new EV “Aion S” announced by GAC New Energy Automobile Co., Ltd., so the supply will be increased. The E-Axle integrates motor, inverter and gears to make it smaller and lighter, increasing the flexibility of the vehicle layout.
The company will invest an additional JPY 20 to 30 billion to build a second drive motor plant. The production capacity will be of the same scale as the first plant, about 600,000 to 700,000 units per year, and operations are planned to start in 2020. In the Chinese market, production of new energy vehicles is expected to increase in line with stricter environmental regulations, and as a result the demand for drive motors will also increase.
Fujikura Composites, Inc.
(formerly Fujikura Rubber Ltd.)
New plant in Huzhou delayed, impact of stricter environmental regulations
In February 2019, Fujikura Composites, Inc. (formerly Fujikura Rubber Ltd.) denied the report of the cancellation of construction of a new plant by its subsidiary company, Anji Fujikura Rubber Ltd. On the other hand, the company announced that the construction schedule of the new plant was delayed due to the impact of environmental regulations. The investment for the new plant in the Huzhou City Anji Economic Development Zone is expected to be about JPY 2.1 billion, and a new product is planned to be launched with the introduction of a new injection machine. Construction started in March 2018 and completion was scheduled in October 2019. The environmental regulations related to rubber production in China has become more stringent, and up to now have been centered on big cities such as Shanghai, but have now also spread to rural areas. The company manufactures rubber for automotive applications and construction of the new plant was approved. However, it has become difficult to manufacture in the Anji Economic Development Zone.
Meidensha Corporation Considering China production of EV parts by 2020, Hangzhou plant is candidate
Meidensha Corporation has begun to consider the building of a production system for electric vehicle motors and inverters in China. Up to now, the company has manufactured electric vehicle components in Japan only. As candidates, the company is considering building a production system in collaboration with its production subsidiary in Hangzhou city which manufactures motors and inverters for industrial use, or with local Japanese affiliated companies. Meidensha motors and inverters are installed in the Mitsubishi Outlander PHEV and the i-MiEV. In the future, the purpose will be to capture the demand for parts for Japanese OEMs’ electric vehicles in China and to provide a stable supply. (From December 2018 report)


Shandong province: Establishment of new company (Nihon Parkerizing), investment ratio change (Nittan Valve)

Nihon Parkerizing Co., Ltd. Heat treatment subsidiary company set up in Rizhao, Shandong
In June 2018, Nihon Parkerizing Co., Ltd. established a wholly-owned subsidiary, Rizhao Parker Surface Treatment Co., Ltd., in Rizhao city, Shandong province for heat treatment business, and the new company began operations in March 2019. The amount of capital investment was CNY 110 million (about JPY 1.9 billion), invested in stages. The company has six production bases in China, and by establishing this new base in northern China, the company plans to capture new demand.
Nittan Valve Co., Ltd. Investment ratio in new hollow-head valve company reduced to 51%
Nittan Valve Co., Ltd. announced that it will reduce the ratio of its investment in the joint venture to be set up in September 2018 from the originally planned 85% to 51%. The company concentrates production of hollow-head valves at its Sanyo plant in Japan (Sanyo Onoda city, Yamaguchi prefecture) but with the expectation of a global increase in demand, the company planned the production of the product at a joint venture company, Rizhao Nittan Valve Co., Ltd., to be established in Rizhao city, Shandong province. This joint venture of Eaton and Nittan Valve, as a production base for engine valve production in China, will follow Nittan Valve’s plant in Guangzhou city, Guangdong province. The reason for reducing the investment ratio of the new company from the initial plan is due to the long-term overseas strategy within the group and changes in the investment plan of the local corporation. (From March 2018 report)


Anhui province: Establishment of new plant (Aisin Seiki, TPR), production adjustment (Ahresty)

Ahresty Corp. Production die castings cut at Hefei plant
Ahresty Corporation subsidiary Hefei Ahresty Casting Co., Ltd. will reduce production of die cast products at its Hefei plant by 30 to 40%. In 2018, the plant strengthened its die casting and machining process operations, and has a production capacity up to 1,400 tons per month. In the China market, with engine designs being revised due to the China6 regulations, and sluggish growth due to US-China trade friction, the company is adjusting local production. (From February 2019 report)
Aisin Seiki Co., Ltd. Joint venture established for aluminum die cast parts for AT
In order to cope with the expansion of automatic transmission (AT) production in China, Aisin Seiki established a joint venture, Aisin (Anqing) Auto Parts Co., Ltd., with Anhui Ring New Group Co., Ltd. The production of aluminum die cast parts including transmission cases for AT is scheduled to begin in August 2020. The new plant will be established in Anqing city, Anhui province, and will strength the supply to group AT production plants in the east China region.
TPR Co., Ltd. New plant for AT seal rings, responding to customer production capacity increases
TPR Co., Ltd. aims to build a new plant for plastic seal rings for automatic transmissions (AT) in Anhui province within two years. Capital investment is expected to be JPY 1 billion. The plastic product business started in 2014 with the establishment of a joint venture with Anhui Huanxin Group Co., Ltd. In order to respond to its major customer Aisin AW’s increase in production capacity, TPR began a study. The company is also considering the transfer of rubber parts production from its plant in Shanghai to the new plant. The intention is to avoid production of rubber products in Chinese urban areas where environmental regulations are becoming more stringent. (From February 2019 report)
Aiming to raise production efficiency of cylinder liners for diesel engines and to increase orders for commercial vehicles
TPR Co., Ltd. invested about JPY 1 billion at its cylinder liner plant in Anqing city, Anhui province to increase the efficiency of its diesel engine cylinder liner production line. The new line is schedule to begin operations in mid-2019. The company aims to raise its components’ cost competitiveness by production rationalization. Seeing the growth in sales of commercial vehicles in the China market, the company is targeting increased orders for diesel engine components. (From February 2019 report)


Jiangxi province: Establishment of joint venture (Central Glass), business acquisition (Mabuchi Motor)

Central Glass Co., Ltd. Joint venture established with Jiujang Tinci Materials for electrolyte raw materials production
In March 2018, Central Glass Co., Ltd. established a joint venture with Jiujang Tinci Materials, Co., Ltd. (Jiujang city, Jianxi province), a wholly-owned subsidiary of Guangzhou Tinci Materials Technology Co., Ltd. (Guangdong city, Guangzhou province) for the manufacture of concentrated solutions of LiPF6 (lithium hexafluorophosphate) for secondary lithium ion batteries. The name of the joint venture is Jiangxi Tinci Central Advanced Materials Co., Ltd.; total capital investment was CNY 120 million (about JPY 2 billion), with 65% supplied by Jiujang Tinci Materials Co., Ltd. and 35% by Central Glass. Central Glass manufactures electrolytes, materials used in large lithium ion secondary batteries installed in electric vehicles, and has its own manufacturing process for LiPF6. The establishment of the joint venture is aimed at low-cost and stable procurement of LiPF6, the main raw material for electrolytes.
Mabuchi Motor Co., Ltd. Acquisition of Hanwa subsidiary, including sheet steel slitting technology and equipment
Mabuchi Motor Co., Ltd. acquired Hanwa Co., Ltd.’s Chinese subsidiary Hanwa Steel Service (Jiangxi) Co., Ltd. through its subsidiary in Hong Kong, Mabuchi Industry Co., Ltd. (Hong Kong Mabuchi). Hanwa Steel Service supplies Mabuchi Motor (Jiangxi) Co., Ltd. (Jiangxi Mabuchi) with slit steel sheets processed into coils as materials for housings, end bells, and rotors. With this acquisition, the company will acquire slitting technology and equipment for steel sheets, which are the main materials for small motors, and aims to improve the competitiveness of in-house manufactured parts.

Source: PR materials from each company, and media reports


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Keywords
China, Japanese suppliers, parts makers, NEV, EV, Electric

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