NTN CORPORATION Business Report FY2006
|In million JPY||FY2006||FY2005||Rate of change (%)||Factors|
|Current net income||27,014||19,550||38.2||-|
|Sales||307,249||276,694||11.0||The sales increase resulted from strong sales of axle bearings and needle roller bearings in North America and Europe, as well as increased sales of axle bearings in Japan, China, and other Asian countries.|
|Constant Velocity Joint division|
|Sales||147,463||131,327||12.3|| Sales increased as a result of the start of mass-production in response to new orders won from US automakers in North America; the start of mass-production in Korea and Thailand; the increase in demand for small cars in Malaysia; and strong car sales, mainly
The Company announced that it invested in IFA-Antriebstechnik GmbH (IFA-AT), a constant velocity joint (CVJ) manufacturer of Germany. The Company acquired 25% of IFA-AT's shares on April 20, and will gradually increase its share holding eventually to hold majority in a few years. IFA-AT supplies its CVJs mainly to Volkswagen (VW) and Audi, and NTN decided to make the investment in order to develop strong relationship with VW, which had no business with the Company before.(From a story in the Nikkan Jidosha Shimbun on Apr. 22, 2006)
The Company invested in SNR Roulements, a major French bearing manufacturer, in March 2007.
Establishment of new companies
The Company announced an establishment of a fully-owned subsidiary for manufacturing constant velocity joints (CVJs), "NTN Fukuroi Corporation" in Fukuroi city, Shizuoka prefecture at the same date. The new company to produce CVJs and main components of CVJs will allow the supplier to respond to a growing global demand for the drivetrain units and also to avert regional risks. Capitalized at 3 billion yen, the new company will begin operation in November 2006. It is expected to generate sales of 10 billion yen with a workforce of 150 in fiscal 2009. For the supplier, this is the third CVJ manufacturing plant in Japan, or the 14th worldwide. The Company intends to meet the rapidly growing needs for CVJs by the reinforcement of its manufacturing bases. Specifically, it plans to expand its monthly production capacity from current 2 million units to 3 million units in two years from now. (From a story in the Nikkan Jidosha Shimbun on Jul. 14, 2006)
The Company announced that it will establish a joint venture with Korea Flange Co., Ltd. (KOFCO Group), Korea, to manufacture and sell a drivetrain product, CVJ (constant velocity joint), in Alabama, the U.S. The new company, Seohan-NTN Driveshaft USA Corporation, will start operation in February 2008 to supply to a U.S. plant of Hyundai Kia Automotive Group. 51% of the capital, US$6 million, will be provided by KOFCO Group and 49% will be funded by the Company 2.5 billion yen sales are targeted for FY 2008, which is schemed to be doubled to 5 billion yen in FY 2010. The cumulative investment by 2009 will be US$7 million and the initial employees will be 30, to be increased to 50 in 2010. This will be the Company's second CVJ production operation in the U.S. after the one in Indiana.(From an article in the Nikkan Jidosha Shimbun on Mar. 1, 2007)
Challenges for FY2007
The Company will implement its new mid-term business plan,
"Growth through Creativity and
Achievements 21 ", which covers three fiscal years from April 2007 to March 2010.
- Challenges in sales and engineering
The Company will aim to become a top manufacturer of constant velocity joints and axle bearings in the world, driven by the synergy effects that are expected to result from its investments in IFA-AT of Germany, which has a strong business relationship with the Volkswagen Group
,; and SNR, which is a major bearing manufacturer in Europe.
- Measures in production operations
In the area of constant velocity joints, NTN Fukuroi Corporation started operations dealing in these in November 2006. The Company will work to ensure that its operations at new facilities become stable as soon as possible; as well as work to expand its business. Overseas, the Company will actively work to reinforce its business in emerging markets such as BRIC countries. NTN Manufacturing India Private Limited, which was established in 2006, will start production of constant velocity joints in April 2007. The Company will also increase the volume of sales that SNS's plant in Romania sells to Russia and Eastern European countries, and work on becoming more responsive to demand for its automotive products by utilizing its the Brazilian plant of SNR.
- Strengthening its profitability
In line with its business expansion activities worldwide, the Company worked on cost-reduction initiatives through promoting activities in VA and VE, as well as on activities to procure parts on a global basis and increase local content. In addition, the Company worked to improve the efficiency of capital through better inventory turnover and facility utilization rates.
In order to achieve the goal for targeted under the final fiscal year of its mid-term business plan, "Rapid Advance 21", the Company concentrated more management resources on its main strategic products such as constant velocity joints, axle bearings, needle roller bearings, clutches, and precision bearings. It also will reinforce its 24-hour R&D structure to continuously shorten development period.
Overall R&D costs at the entire Group for fiscal 2006 were 14,221 million yen.
-The Company announced that it has developed a new tapered hub bearing unit for pickup trucks and SUVs a "high-load capacity tapered hub bearing unit." The company says it aims to expand the sales of the new product with longer operating life and higher rigidity to the level of 1 billion yen a year by 2010. The new product is equal in size to traditional units, but its internal design specifications have been altered drastically. By placing a gear retainer closer to an outer ring, gaps between bearing balls have become smaller, and this has made it possible to increase the number of the balls to the maximum without sacrificing the retainer's rigidity. The new design specifications prolong the product life by 20% and the rigidity by 7% without changing the bearing size. (From a story in the Nikkan Jidosha Shimbun on April 5, 2006)
-The Company announced that it has developed hub bearings with built-in sealing for high insulation and low torque for passenger cars that meet needs for improved vehicle fuel economy and are maintenance-free as well. By optimizing sealing materials and pattern, both high insulation and low torque have been achieved at the same time. The Company plans to attain annual sales of 3 billion yen in 2009 positioning this as a globally marketing product.(From a story in the Nikkan Jidosha Shimbun on May. 31, 2006)
-The Company announced that it has developed "Hub bearing integrated with a speed sensor for driving wheels," which is a unit integrating a speed sensor on the outer edge of a hub bearing for driving wheels. A sensor is placed in a narrow interspace between a knuckle and a constant velocity universal joint in a pattern that does not interfere with the outer edge of the joint. The company intend to market the product as a hub bearing integrated with a sensor for passenger cars, and aims for yearly sales of 2 billion yen by 2010.(From a story in the Nikkan Jidosha Shimbun on June 20, 2006)
-The Company announced that it has developed low friction needle roller bearing for automotive crankshaft and camshaft support applications that reduce torque considerably compared to conventional plain bearings. Startup torque will be reduced by approximately 90%, and rotational torque will also be reduced by approximately 50%. Vehicle fuel efficiency is expected to increase by approximately 3% measured by "10.15" gas emission test run mode. The Company sets the annual sales target of 1.5 billion yen in 2010 for both crankshaft and camshaft bearings. (From an article in the Nikkan Jidosha Shimbun on Oct. 6, 2006)
-The Company announced that it has developed a new tapered roller bearing with an inner diameter of only 5mm, the world's smallest. While a miniature bearing is widely used in this category of size at present, it has had such problems as short life span and lack of stiffness. The Company's new tapered roller bearing has improved resistance against burden, and achieved greater stiffness, extra long life, as well as compact design. (From an article in the Nikkan Jidosha Shimbun on Dec. 13, 2006)
-The Company announced that it has developed a new hub bearing for driven wheels, which is integrated with a compact and completely sealed rolling sensor on the outer edge of the bearing. Conventional-type hub bearings with not perfectly sealed rolling sensors for driven wheels have had problems of suffering damages on detection portion of sensors and magnetized encoders, which are caused by such items as muddy water seeping from the outside. The new hub bearing, which is designed to completely seal off foreign objects by separation on the outer side of the bearing, has significantly increased reliability. By making efforts to promote marketing of the new product as a component to contribute to enhancing automobile reliability, The Company aims to achieve its annual sales of two billion yen in 2010. (From an article in the Nikkan Jidosha Shimbun on Jan. 9, 2007)
-The Company announced that it has developed a new high-speed thrust needle bearing, which achieves the world's fastest rotational speed (dmn value of 1.5 million). The new bearing was designed primarily for use in automotive high-power motor units in hybrid vehicles, automatic transmission systems with multiple gear ratios, and continuously variable transmission systems. The rotational speed of the new thrust needle bearings was increased by nearly 70 percent compared with existing products, which has dmn value of 0.9 million; the company was also able to enhance the level of thermostability by achieving a 35 reduction in temperature increase of the bearing in high-speed driving. The Company targets sales of 500 million yen with the new bearing in fiscal 2010, including businesses with suppliers of industrial machinery.(From an article in the Nikkan Jidosha Shimbun on Mar. 20, 2007)
The Company developed a drive wheel hub bearing with a built-in sensor, which has tightly enclosed, built-in speed sensor in a compact space on the edge of the outer ring of the drive wheel hub bearing. It also developed a hub bearing with a built-in, tightly enclosed low torque seal, which is expected to contribute to improved fuel economy and making vehicles more maintenance free.
The Company invested 8,551 million JPY in R&D activities for bearing products.
Constant Velocity Universal Joint
-The Company developed a new tapered track undercut-free joint (TUJ) with the maximum operating angle of 54 degrees for use in the automotive drive shaft, which provides a wider steering angle to a front-engine, front-drive type and a 4-wheel drive vehicle, as well as a small minimum turning radius. Conventional constant velocity joints (CVJ), including the company's products, had the maximum operating angle of 50 degrees. A higher degree in the operational angle was achieved by adjusting axial direction on the ball orbit. The Company will start mass production of the new product in 2008 with the aim of achieving sales of 1.5 billion yen in 2010.(From an article in the Nikkan Jidosha Shimbun on Aug. 30, 2006)
The Company developed a new compact, fixed constant velocity joint (CVJ), which is one of the smallest CVJs having a maximum operating angle of 50 degrees. This new CVJ is designed for small and mini vehicles.
The Company invested 4,893 million JPY in R&D activities for constant velocity joint products.
Precision instrument products, etc. (Automotive components only)
-The Company has worked on developing automatic tensioners, tune tensioners, clutches, and system products related to these that respond to the needs for size and weight reductions, improved performance, and cost reductions.
-In the area of tensioners, the Company developed a shorter automatic tensioner for the ancillary belt. The total length of this new tensioner is 15% shorter than that of conventional ones.
-In the area of clutches, the Company developed a clutch integrated pulley unit which has a pulley diameter that is 12% smaller than that of conventional ones.
The Company invested 775 million JPY in R&D activities for precision instrument products.
Technical license contract (as of March 2007)
|Unidrive Pty. Ltd.||Australia||Technical license related to assembly of constant velocity joints||1983.2.15-2008.6.9|
|Tung Pei Industrial, Co., Ltd.||Taiwan||Technical license related to manufacture of constant velocity joints||2003-3.26-2008.3.25|
|National Engineering Industries Ltd.||India||Technical license related to manufacture of ball bearing etc.||1985.11.5-2011.11.1|
The Company made a capital investment of 39 billion 176 million JPY to construct additional production facilities at NTN Mie Corporation and Okayama Seisakusho, additional production facilities and buildings as part of the modernization going on at Kuwana Seisakusho, and additional production facilities at NTN Manufacturing (Thailand) Co, Ltd.
The Company made capital investment of 19 billion 574 million JPY to construct additional production facilities, etc. at NTN Driveshart Inc. and Okayama Seisakusho.
Facilities (New, Eliminated, etc.)
|Name||Type of facility||Total amount
|Research division||Research facility||3,703||Jun-04||Jan-10||R&D, etc.|
|Kuwana Seisakusho||Facility for bearings||10,305||Feb-05||Aug-09||Streamlining|
|Iwata Seisakusho||Facility for bearing, CVJ, precision apparatus products etc.||5,069||Jul-05||May-08||Production increase and streamlining|
|Okayama Seisakusho||Facility for bearings, CVJs||11,020||Aug-04||May-08||Streamlining|
|Nagano Seisakusho||Facility for bearings||1,196||Nov-05||Jun-08||Streamlining|
|Subsidiaries and affiliates|
|NTN Mie Corp.||Facility for bearings||10,751||Apr-05||Mar-10||Production increase and streamlining|
|NTN Kamiina Corp.||Facility for bearings||6,321||Jan-06||Mar-08||Production increase|
|NTN Fukuroi Corp.||Building and facility for bearings||2,882||Oct-06||Sep-07||Production increase and streamlining|
|NTN Kinan Corp.||Facility for CVJs||2,516||Nov-06||Jan-08||Production increase|
|NTN DRIVESHAFT, INC.||Facility for CVJs||3,107||Oct-06||Nov-07||Production increase|
|NTK Precision Axle Corp.||Building and facility for bearings, CVJ||3,782||May-06||Nov-07||Production increase|
|NTN Transmissions Europe
|Facility for CVJs||1,791||Apr-05||Sep-07||Production increase|
|NTN MANUFACTURING (THAILAND) CO., LTD.||Facility for bearings, CVJ, precision apparatus||2,021||Oct-06||Apr-07||Production increase|
|NTN-NIDEC (THAILAND) CO., LTD.||Facility for bearings||2,361||Aug-06||Jun-07||Production increase|
|NTN Manufacturing India Private Limited||Facility for CVJs||1,320||Jan-06||Sep-07||New established|
|SHANGHAI NTN CORPORATION||Facility for bearings, CVJs||7,377||Jun-05||Mar-08||Production increase|