JTEKT Corporation Business report FY2008

Business Highlights

Financial Overview (in millions of JPY)
  FY2008 FY2007 Rate of
Sales 1,017,071 1,157,594 (12.1) - Sudden decline in production and sales volume
Operating income 22,370 77,650 (71.2) - Sudden decline in demand and sales as well as yen appreciation and price hikes for materials
Ordinary income 11,109 72,896 (84.8)
Current net income (11,954) 43,446 -
Mechanical Components Division
Sales 830,608 954,968 (13.0) - Sales both at home and abroad dropped, particularly in the automotive market.
Operating income 10,837 59,569 (81.8) -

-The Company received the first order for CVT chains, which are proprietary products developed by the Company. The Company is planning to begin mass-production in September, 2008 at its Kokubu Plant in Kashiwara-shi, Osaka prefecture. The order came from an overseas transmission manufacturer and the production will start with approximately 1,000 units per month. The start of the first mass-production, though the quantity is relatively small, will allow the Company to be close to the goal of developing the project into full-scale business. The JTEKT Involute Chain (J-IC) for CVTs possesses combined advantages of metal belts and chain belts, and features higher efficiency, high-torque-compatibility and lower noise. There have been no previous CVT products on the global market based on the new JTEKT chain technology. (From an article in the Nikkan Jidosha Shimbun on June 3, 2008)

-The Company has received orders from Tata Motors Ltd., India, for the manual steering of the Nano, an ultra-low priced car to be launched in India this year. Sona Koyo Steering Systems Ltd., its joint venture in Haryana, Gurgaon, India will produce the product. The business between the Company and Tata Motors has been limited to a several percent of Sona Koyo's sales. Tata Motors' decision to purchase parts for the Nano from two suppliers (double-sourcing), however, has brought the new orders to the Company. Tata Motors has ordered the steering gear with no power assist by either a hydraulic or electric system. Although its maneuvability will be lower without power assist, its simple mechanism will keep the price down. (From an article in the Nikkan Jidosha Shimbun on July 4, 2008)

FY2009 Business Plan (in millions of JPY)
  FY2009 vs. last fiscal year (%)
Sales 770,000 75.7
Operating income (20,000) -
Ordinary income (22,000) -
Net profit (23,000) -
Capital investment 38,000 74.4
Depreciation cost 52,000 93.1
Machine Tool Component Division
Sales 665,000 80.1

FY2009 Sales by Region (Note) (in millions of JPY)
  FY2009 vs. last fiscal year (%)
Japan 430,000 79.7
Europe 130,000 64.7
North America 95,000 65.2
Asia and Oceania 100,000 85.6
Others 15,000 104.3
(Note) Sales to outside customers

FY2009 Global production system reorganization
-Reorganization of production facilities to make it more flexible about demand fluctuations

Steering: Reorganization of production facility in France and production shift to Eastern Europe

Bearings: Reorganization of production facilities in Eastern Asia

Steering & bearings: Reorganization of production facilities in North America

Promotion of line shifts among plants to improve line operating rates and reorganization of supply chain

<North America>
Gear parts machining line being shifted to Tennessee from Texas
Gear line being shifted to Tennessee from Virginia
Damper pulley line being shifted to Japan from South Carolina


R&D Expenditure (in millions of JPY)
  FY2008 FY2007 FY2006
Overall 29,056 30,857 29,957

R&D Facilities in Japan
Facility Location
R&D center Nara Pref.
Osaka Pref.
Aichi Pref.

R&D Activities
Steering Division
-The Company developed a new column-assisted electric power steering system with electric tilt & telescopic functions without changing overall length. The new system was released in November 2008, targeting luxury brand models.

-In December 2008, the Company released a new electric power steering system with safety features that keep ASSIST working even in case of parts trouble. The Company also developed other technology to help drivers respond to several malfunction cases.

-Responding to customers' needs for improved driving stability, the Company successfully developed an intermediate shaft, which is a shaft connecting the steering column and gear boxes. The shaft uses a high-strength direct-acting slide mechanism based on bearing engineering techniques. This new product was released in December 2008.

-The Company developed a high performance and easy to install electric power steering (EPS) that can be applied to SUVs with vehicle weight of over 2 tons. A motor used for steering assistance, which is conventionally aligned with a steering shaft, is arrayed in parallel with a rack gear independently. Because of a higher flexibility in laying out of a motor whose position in the engine room is restricted due to its big size for a component in the small space, the new EPS can be applied to a wide range of vehicle models. The Company intends to market the product for heavy-duty SUVs and large-size passenger cars as a new unit that can contribute to improving fuel efficiency. (From an article in the Nikkan Jidosha Shimbun on May 30, 2008)

Bearing & Drivetrain Components Division
-The Company developed high-speed bearings for hybrid vehicles. This high speed product was developed by restricting centrifugally-generated deformation of gear retainers, which are placed in the rotating part of a hybrid vehicle's power mechanism.

-To help manufacturers make smaller and more efficient transmissions and other components, the Company developed ultra-compact low-torque thrust needle roller bearings. Smaller transmissions need shorter skids and the new product is fit for this purpose. With the new bearing the amount of torque needed is up to 60% lower and weighs 20 to 30% less.

-As for hub units, the Company developed ultra-light, ultra-low torque hub units for mini-vehicles. For standard vehicles, it developed high-strength hub units for more stable brake performance.

-The Company announced that it has developed a hub unit for drive wheels with a built-in ABS sensor to reduce weight. The hub unit was redesigned to reduce the number of parts and processes, eliminating waterproof parts, to reduce total cost. The built-in ABS sensor does not require the mounting area, which led to the downsizing of the unit. A newly adopted "labyrinth structure" to narrow the gap between the sensor cover and the drive shaft eliminated a deflector, which was necessary to ensure watertight property. (From an article in the Nikkan Jidosha Shimbun on July 5, 2008)

-The Company announced that it has developed a super low-weight and super low-torque hub unit bearing for use in mini-vehicles. It is looking to start its commercial production in fiscal 2010. Because of growing demand for small and mini vehicles, it is becoming increasingly urgent to develop light weight, small size and low torque components. Responding to these needs, the Company has developed an environmentally responsive hub unit bearing. Its volume production is scheduled to start in October, 2009 with an annual sales target amounting to some 2.2 billion yen by 2014. (From an article in the Nikkan Jidosha Shimbun on Dec. 6, 2008)

-The Company expanded application of its newly-developed torque-sensing function for center differentials. Following application to luxury hybrid passenger cars in fiscal 2007, it expanded the use to 4WD models of luxury passenger cars.

-The Company developed a new 4WD coupling (ITCC) for higher dependability of luxury crossover SUVs and started mass production in January 2009. This new product is more durable than current ones and has sufficient capacity to ensure high performance of large vehicles in severe use on slippery road surfaces.

Investment Activities

Capital Expenditure (in millions of JPY)
  FY2008 FY2007 FY2006
Overall 51,104 58,912 60,303
Mechanical Components Division 44,204 54,411 53,053

New Equipment Installment
Type of facility Estimated amount of investment
(in million JPY)
Project Period
From To
Kokubu Plant
(Osaka, Japan)
Manufacturing facilities for mechanical components 6,600 Apr., 2009 Mar., 2010
Kagawa Plant
(Kagawa, Japan)
Manufacturing facilities for mechanical components 2,400 Apr., 2009 Mar., 2010
Kariya Plant
(Aichi, Japan)
Manufacturing facilities for mechanical components and machine tools 1,200 Apr., 2009 Mar., 2010
Daibea Co., Ltd.
Head Office & Sakai Plant
(Osaka, Japan)
Manufacturing facilities for mechanical components 1,400 Apr., 2009 Mar., 2010
Koyo Corporation Of the USA
(South Carolina, USA)
Manufacturing facilities for mechanical components 1,100 Jan., 2009 Dec., 2009