NTN CORPORATION Business Report FY2007

Business Highlights

Financial overview
In million JPY FY2007 FY2006 Rate of change (%) Factors
Sales 533,984 483,817 10.4 -
Operating income 49,611 46,792 6.0 -
Ordinary income 43,231 42,210 2.4
Current net income 27,431 27,014 1.5 -
Bearing division
Sales 338,452 307,249 10.2 - The sales increase resulted from strong sales of axle bearings and needle roller bearings in Europe and China, as well as increased sales of axle bearings in Japan, the Americas, and other Asian countries.
Constant Velocity Joint division
Sales 165,071 147,463 11.9 Sales increased mainly as a result of the start of mass-production in response to new orders won from Japanese automakers in Europe and other Asian countries, and the start of mass-production in response to new orders won from US automakers in Americas and new orders for export and small cars in Japan.

Challenges for FY2008
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 aims to benefit from a synergy effect expected to result from integration of technological capabilities and sales and marketing capabilities with SNR of France, which became a consolidated subsidiary in April 2008.
- The Company will establish a new R&D center in Kuwana area in December 2008 to enhance the accumulation of elemental technology as well as the R&D function for developing industrial machinery related products.

>>>See R&D for more details

- Measures in production operations
- In the area of axle bearings, the second plant of NTN Kinan Corp. in Wakayama prefecture started operation in February 2008 to enhance production capability of preceding process.
- The Company aims to reinforce its capacities to respond to the automotive-related demand by increasing production volume of constant-velocity joints in India and utilizing SNS's plants in Romania and Brazil.

>>>See Investment for more details

- 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.


R&D expenses
in million yen FY2007 FY2006 FY2005
Bearing related products 9,085 8,551 8,613
Constant-velocity joint related products 5,039 4,893 5,248
Precision  apparatus products 880 775 909
Company wide 15,005 14,221 14,771

R&D structure
In FY2007, in order to achieve the goal for the first fiscal year of its mid-term business plan, "Growth through Creativity and Achievements 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 reinforced its 24-hour R&D structure to continuously shorten development period.

- In Nov. 2007, the Company announced a plan to establish a new R&D center tentatively named Shin Kuwana Research and Development Center in the Kuwana Business Research Park in Kuwana-shi, Mie prefecture, investing approximately 3 billion yen. The Company aims to strengthen its capacity to research and develop higher elemental technology for bearings and constant-velocity joints, and make further study on components for industrial machines. The construction will begin in June 2008 and complete in December 2008. The new R&D center will develop eco-friendly heat-treatment technology and materials, make study on sophisticated nanostructure, research the possibility of creating high-strength materials based on surface construction technology, and develop the next-generation lubricant agents. It will also allow the supplier to improve its environment for research and development and competitiveness, for example, by developing higher analysis technology. (From an article in the Nikkan Jidosha Shimbun on Nov. 17, 2007)

R&D achievement (FY2007 ended March 2008)

- The Company has succeeded in development of an environment responsive roller bearing for the first time in the industry. In order to reduce burdens on the environment, the manufacturer uses biodegradable materials for all of retainers, seals and grease. (From an article in the Nikkan Jidosha Shimbun on Aug. 7, 2007)
- The Company developed "bearings with high-resolution rotational sensors", which achieved resolution 40 times that of conventional types. These bearings were developed jointly with SNR of France, a consolidated subsidiary since April 2008.  
- In the needle bearing area, the Company developed "bearings for the locker arms of diesel engines". These minimize wear caused by particulate matter generated in diesel engines.
- The Company developed hub bearings with load sensors. The sensor of an Electronic Stability Control system (ESC), used as an active safety technology to prevent vehicle accidents, is mounted on the vehicle body and therefore is affected by the suspension, delaying detection of the condition between the road and the tire. Improvement of its sensor response has been an issue. (From an article in the Nikkan Jidosha Shimbun on Nov. 1, 2007)
- The Company developed a hermetic deep groove ball bearing for alternators as a new product that can be used continuously at the temperature of 180 degrees centigrade.The new bearing, which uses environment-friendly grease, has product's life (1) 50% longer at 180 degrees centigrade and (2) 200% longer in terms of the effect of brittle stripping, than traditional bearings. The company intends to introduce the bearing to global markets as a product that contributes to enhancing alternators' output. (From an article in the Nikkan Jidosha Shimbun on Apr. 25, 2007)
- The Company developed a small-size and light-weight clutch integrated pulley for use in passenger cars. The new product features (1) a minimum pulley diameter of 51mm, (2) light weight of 400 grams, and (3) rated torque of 90 newton-meters, which are levels equivalent to conventional pulleys. (From an article in the Nikkan Jidosha Shimbun on Jun. 20, 2007)
- The Company announced development of a new "high-performance cradle bearing," for disc brakes installed in large-size commercial vehicles. The new bearing has a product life longer than twice the company's existing models' and is easier to be assembled with because of its new, inseparable structure. (From an article in the Nikkan Jidosha Shimbun on Aug. 24, 2007)
- The Company developed a resource-saving, lightweight Hub-Bearing, approx. 10% lighter than its previous model by using 20% less materials. In designing the new hub-bearing, the Company used FEM (Finite Element Method) analysis and adopted an intermittent claw shape for a deformation flange and a wheel pilot, which successfully reduced its weight. (From an article in the Nikkan Jidosha Shimbun on Feb. 4, 2008)

Constant Velocity Universal Joint
- The Company developed V (Value) series constant velocity joints, "VBJ", "VDJ" and "VTJ", which have achieved high cost performance and reduction in size and weight for vehicles to be sold in emerging markets where increase in demand is expected. The Company proposed the products to its customers along with "integrated hub joints" and "separate-type hub joints".
- The Company has developed a new compact fixed-type constant velocity joint (CUJ) with the maximum operating angle of 50 degrees, which is the smallest of the kind in the global market. While ensuring the same level of intensity as that provided by the EUJ, the new CUJ is 4 percent lighter and smaller in terms of outer ring diameter and weight. It also offers high durability: a 30 percent improvement in durability at a normal angle of 8 degrees; and a 40 percent improvement at a large operating angle of 46 degrees. (From an article in the Nikkan Jidosha Shimbun on Apr. 21, 2007)
- The Company developed the "High Efficiency Compact LJ," a constant-velocity joint for FR or 4WD vehicle drive shafts, with which the company succeeded in cutting the torque loss to nearly 50% of its current products. The new constant-velocity joint adopts a new mechanism designed to improve torque transfer efficiency as well as driving comfort in terms of noise, vibration and harshness.(From an article in the Nikkan Jidosha Shimbun on Sep. 28, 2007)

Precision instrument products, etc. (Automotive components only)
- The Company developed a new short type auto tensioner for the belt to drive peripheral devices in a passenger car engine, whose total length is shorter than the previous product, expanding the possibility of design around accessories as a result. The new auto tensioner replaced the conventional check-valve mechanism using a hydraulic dumper with steel balls by a mechanism of a new idea to use an elastic ring, and achieved the same performances as the conventional products, as well as making the overall length shorter and reducing parts. (From an article in the Nikkan Jidosha Shimbun on Jun. 25, 2007)
- The Company has developed an oil-less chain tensioner, which requires no oil supplied by the engine. The company uses spring-type dampers to develop the new tensioner that features the same tension control performance as conventional hydraulic chain tensioners without oil supplied by the engine.(From an article in the Nikkan Jidosha Shimbun on Sep. 5, 2007)
- The Company developed and commercially produces "ball screw units" for the continuous variable valve mechanism, which is a technology for improving fuel economy of engines.
- The Company has developed a compact and lightweight planetary roller screw-type electric brake actuator with a high level of durability. It is composed of a motor and the Company's proprietary direct acting system (a suppress strength generator) using a planetary roller screw. Using this actuator technology, the friction between the sun roller and planetary roller helps the brake system achieve a powerful braking solely through the pressure applied on the brake pads. (From an article in the Nikkan Jidosha Shimbun on Oct. 20, 2007)
- The Company has developed new boll screw units for electric actuators for continuous variable valve timing systems. According to the company, it has already begun mass-delivery of the products to Hitachi Automotive Systems Group. (From an article in the Nikkan Jidosha Shimbun on Nov. 20, 2007)
- The Company developed End-Pivot Type Mechanical Lash Adjuster for the swing arm type valve gear mechanism, which applies its unique buttress threads mechanism.The new product's features include: 1) a lash-adjuster mechanism with no oil filling, 2) no functional decline by air bubble interfusion, 3) expanded engine design possibility and 4) 20% axially shorter design in comparison with the conventional Hydraulic Lash Adjuster. (From an article in the Nikkan Jidosha Shimbun on Nov. 22, 2007)

Technical license contract (as of March 2008)

Company Country Contractual coverage  
Unidrive Pty. Ltd. Australia Technical license related to assembly of constant velocity joints  1983.2.15-2013.6.9
Tung Pei Industrial, Co., Ltd. Taiwan Technical license related to manufacture of constant velocity joints 2003-3.26-2013.3.25
National Engineering Industries Ltd. India Technical license related to manufacture of ball bearing etc. 1985.11.5-2011.11.1

Investment Activities

Capital investment for FY2007 was 59,504 million JPY.

-Bearing Division:
The Company made a capital investment of 43,273 million JPY to construct additional production facilities and buildings as part of restructuring of production at NTN Mie Corp. and Kuwana Seisakusho, and to construct additional production facilities at Okayama Seisakusho and America NTN Bearing Mfg. Corp.

-CVJ Division:
The Company made capital investment of 15,711 million JPY to construct additional production facilities, etc. at NTN Driveshaft Inc. and NTN Fukuroi Corp.

- In Feb. 2008, the Company announced it will construct a the second plant at the existing site of NTN KINAN CORPORATION and expand its operations of automotive bearings, including axle bearings. The second plant will mainly engage in the forging of bearings. With total floor space of approximately 8,000m2, the new facility is slated to start production in February 2008. The size of workforce is expected to be around 25 in FY2009. (From a press release on Feb. 19, 2008)

Facilities (New, Eliminated, etc.)
Name Type of facility Total amount
(million JPY)
Start Completion Purpose
NTN Corporation
Research division Research facility 6,144 Jun., 2005 Oct., 2010 R&D, etc.
Kuwana Seisakusho Facility for bearings 13,827 Jul., 2005 Oct., 2009 Streamlining
Iwata Seisakusho Facility for bearing, CVJ, precision apparatus products etc. 4,493 Apr. 2006 Feb., 2009 Production increase and streamlining
Okayama Seisakusho Facility for bearings, CVJs 16,132 Sep. 2004 Feb., 2009 Streamlining
Nagano Seisakusho Facility for bearings 954 Nov. 2005 Feb., 2009 Streamlining
Subsidiaries and affiliates
NTN Mie Corp. Facility for bearings 9,793 Jan., 2007 Mar., 2010 Production increase and streamlining
NTN Kamiina Corp. Facility for bearings 8,459 Jan., 2006 Sep., 2008 Production increase
NTN Fukuroi Corp. Building and facility for bearings 3,802 Oct., 2006 Aug., 2008 Production increase and streamlining
NTN Kinan Corp. Facility for CVJs 3,189 Jan., 2007 Jun., 2008 Production increase
American NTN Bearing Mfg. Corp. Facility for bearings 2,797 Jan., 2007 Aug., 2008
NTN Driveshaft, Inc. Facility for CVJs 2,526 Oct., 2006 Jun., 2008 Production increase
NTN-Bower Corp. Facility for bearings 1,402 Oct., 2007 Dec., 2008
NTN Transmissions Europe
(Allonnes, France)
Facility for CVJs 3,253 Nov., 2007 Sep., 2009 Production increase
NTN Manufacturing (Thailand) Co., Ltd. Facility for bearings, CVJ, precision apparatus 2,176 Nov., 2007 Mar., 2009 Production increase
Shanghai NTN Corporation Facility for bearings, CVJs 7,180 Mar., 2006 Mar., 2010 Production increase