NISSIN KOGYO CO., LTD. Business report FY2007
Business Highlights
In million JPY | FY2007 | FY2006 | Rate of Change (%) | Factors |
Sales | 202,469 | 187,878 | 7.8 | Sales increased year-on-year due to increased production volume of products the Company's main customers produced for export; increased sales of mechatronics products for new vehicles; and strong sales of automotive components in China and motorcycle components in Brazil and Vietnam. |
Operating income | 21,029 | 20,666 | 1.8 | Operating income, ordinary income, and current net income all increased as a result of cost reduction activities and increased revenue. This was despite increases in materials prices and startup costs for launching new products in North America. |
Ordinary income | 22,368 | 21,618 | 3.5 | |
Current net income | 13,348 | 12,375 | 7.9 |
Contracts
In Sept. 2007, the Company announced a development of the new vehicle
stability assist (VSA) device and an adoption of the new product
by Honda Motor Co., Ltd. for the new Accord just released on September
12, 2007 in the USA. The new VSA weights only 2 kg, 20% lighter
than its conventional model, and will be produced at a significantly
lowered cost. The new Accord adopted the Company's consolidated
base unit that combines motors, pressure sensors and electromagnetic
valves. The Company succeeded in combining some components by making
motors and electronic parts smaller to increase cost competitiveness
of the product. It also developed linear-controlled electromagnetic
valves to control oil pressure pulses when ABS is in operation.
This also can improve drivers' confidence in braking and reduce
noise during the operation. (From a story in the Nikkan Jidosha
Shimbun on Sep. 14, 2007)
Recent developments in Japan
- Restructuring and enhancing production
structure
Absorption
The Company announced the planned merger of its subsidiary Nissin
Shiga Seisakusho. Nissin Shiga Seisakusho, a 100% subsidiary of
the Company, engages in the manufacturing and sale of automotive
components. The merger is scheduled to take effect on April 1, 2008.
The Company, by taking over the operations of its consolidated subsidiary,
intends to effectively respond to changing environment and improve
the efficiency of its management system as an integrated group.
Consequently Nissin Shiga Seisakusho will be dissolved and merged
with its parent company Nissin Kogyo. (From a press release on Jan.
29, 2008)
Reorganizing operational framework
The Company announced that it will reorganize its operational
framework in order to strengthen the headquarters control over its
global operations and improve overall business efficiency. Under
the new organizational framework to be effective April, 1, the Company's
current regional headquarters system will be replaced by a new,
regional administration system that allows the top director in charge
of Europe and the USA and that in Asia to oversee the Group's operations
in the area, and thereby delegating supreme power to the Japanese
headquarters. In Japan, Business Management Division and the Administration
Division will be consolidated into a new division called the Business
Administration Division. In addition, the functions of the current
Sales and Development Division; and the Procurement Division will
be transferred to the following divisions: the Development Division;
and the Sales and Procurement Division. Furthermore, Nissin Kogyo's
three domestic facilities, namely Ueda Plant and Tobu Plant in Nagano
Prefecture, and Naoetsu Plant in Niigata Prefecture, which have
been controlled by the East Asia Regional Headquarters, will be
placed under the management of the Production Division. (From an
article in the Nikkan Jidosha Shimbun on Mar. 1, 2008)
Recent developments outside Japan
- Restructuring and enhancing production structure
- The Company announced that it will establish a company to produce brake components and aluminum parts, to cope with rapid expansion of motorcycle and vehicle markets in India.
- The Company announced that it will
enhance its production capability in Thailand.
>>> See Investment for
more details
Business plan
The Company will make full efforts in expanding sales of aluminum
cast parts. It aims to increase sales to 26 billion yen in FY 2007,
up 9 percent from a year earlier, by winning new orders and enhancing
production capacities, mainly of engine mount and suspension parts.
The supplier plans to develop these products as its second core
business after brakes to establish more robust revenue base. Since
its aluminum cast parts feature tenacious property as they are gravity
die cast (GDC) products, they are suitable for parts requiring strength
and durability. In the meantime, the Company will make efforts in
promoting the existing products with proven results such as engine
mount brackets and knuckles and in expanding vehicles models to
mount these products. It aims to win new business by aggressively
making technical proposals toward automakers which have not used
its products. (From a story in the Nikkan Jidosha Shimbun on Jun.
29, 2007)
The Company announced that it will work on reducing its dependence
on Honda Motor Co., Ltd., its largest shareholder and major customer,
under its long-term vision targeting 2010 and after. While continuing
initiatives to improve its global supply structure in line with
Honda's growth strategy, the brake supplier intends to increase
the sales of stability control systems and other brake products
to other OEMs. Specifically, the Company aims to bring up the ratio
of sales to customers other than Honda to at least 50 percent in
the future; the sales ratio to Honda now reaches as much as 75%.
By expanding its customer base, the Company intends to enhance its
business structure as a supplier of brake systems for motorcycles
and automobiles. Having secured a top share of the motorcycle brake
market, Nissin Kogyo has been winning increasing volume of business
with Suzuki Motor Corporation and Fuji Heavy Industries Ltd. Taking
advantage of its capability to develop and produce brakes for both
motorcycles and automobiles, the Company will increase its presence
in the market, while maintaining its strategic ties with Honda.
(From an article in the Nikkan Jidosha Shimbun on Aug. 30, 2007)
R&D
FY2007 | FY2006 | FY2005 | |
R&D expense (in million JPY) | 7,313 | 6,870 | 6,367 |
The number of staff | N.A | N.A | 451 |
R&D Structure
The Company worked on R&D activities that enables it to build a global production structure. In this effort, the Company focused on development of basic brake systems and automatic mechatronics control systems, creating design technologies for reducing weight mainly by using aluminum products, and developing materials and manufacturing methods in order to reduce the weight of motorcycles and automobiles as well as to improve the safety and comfort of vehicles. It also carried out development activities on full brake systems under joint cooperation with automakers.
Major R&D achievements in automobile parts
<Development of an automatic control mechatronics system>
- The NK21V, a small and lightweight VSA (Vehicle Stability Assist) system that the Company recently developed, is being equipped on four vehicle models. The NK21V offers greater riding comfort and enhances vehicle safety. One of the vehicles models also is being equipped with a HSA (Hill Start Assist) system, which helps drivers when vehicles start to climb hills.
<Development of a full brake system>
The Company developed a full brake system for one vehicle that is equipped with the NK21V, a new VSA (Vehicle Stability Assist) system that the company recently developed. In addition, the Company developed a caliper with a ball lamp parking mechanism and it is being equipped on three vehicle models.
<Basic brake development>
-The Company developed a caliper with a ball lamp parking mechanism. This caliper, which is being featured on two vehicle models, improves the performance of the parking brake. Not only does it improve performance but also reduces vehicle weight, being lighter than conventional calipers.
<Development of weight reduction technology>
-The Company developed 38 types of aluminum engine mounting brackets that lighten the weight of vehicles. These brackets are being equipped on five vehicle models.
-The Company developed an aluminum rear knuckle, which currently is being equipped on one vehicle model.
Investment Activities
Capital investment in FY 2007 (ended Mar. 2008) was 20,423 million JPY.
Overseas Investments
<India>
In Apr. 2007, the Company announced that it will establish a company to produce brake components and aluminum parts, to cope with rapid expansion of motorcycle and vehicle markets in India. The new company, Nissin Brake India Private Limited which is scheduled to start operations in October 2008, will be located near Delhi, India. The plant will have an area of 120,000 square meters and a floor space of 5,000 square m. Total investment will be 1.6 billion yen. The company plans to employ about 60 people at first in 2008 and target about two billion yen in sales in 2010. (From a story in the Nikkan Jidosha Shimbun on Apr. 25, 2007)
<Thailand>
In May 2007, the Company announced that it will enhance its production capability in Thailand. Recently in April 2007, a construction of a new stamping parts plant was completed. The Company is now ready to begin a full-fledged production of mastervacs and drum brake panels, and also to fully consolidate production lines of stamped parts and brakes. In the future, it will explore the possibility of launching a cast iron production to further expand its local capability in the material production area. (From a story in the Nikkan Jidosha Shimbun on May 11, 2007)
Plans to add new facilities for automotive parts (As of end of March 2008)
Business segment and main products | Type of facility | Planned total investment (million JPY) | Starting month | Planned completion |
Ueda Plant (Nagano Pref., Japan) | Production facility | 1,065 | May, 2007 | Mar., 2009 |
Tobu Plant (Nagano Pref., Japan) | Production facility | 490 | Feb. 2008 | Mar., 2009 |
Naoetsu Plant (Niigata Pref., Japan) | Production facility | 679 | Jun. 2007 | Feb., 2009 |
Nissin Brake Ohio Inc.(Ohio, USA) | Production facility | 2,890 | Oct. 2007 | Mar., 2009 |
Nissin Brake Georgia, Inc.(Georgia, USA) | Production facility | 1,568 | Jul., 2007 | Mar., 2009 |
Nissin Brake (Thailand) Co., Ltd. (Nakornratchasrima, Thailand) | Production facility | 3,623 | Oct. 2007 | Dec., 2008 |
P.T. Chemco Harapan Nusantara
(Jawa Barat Indonesia) |
Production facility | 1,220 | Jan., 2008 | Dec., 2008 |
Zhongshan Nissin Industry Co.,
Ltd.(Guangdong, China) |
Production facility | 1,219 | Oct., 2007 | Dec., 2008 |
Nissin Brake Vietnam Co., Ltd.(Vinh Phuc, Vietnam) | Production facility | 586 | Jul., 2007 | Dec., 2008 |
Nissin Brake Do Brasil Ltda. (Amazon, Brazil) |
Production facility | 2,906 | Oct., 2007 | Dec. 2008 |