Nissin Kogyo Co., Ltd. Business Report FY ended Mar. 2013

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 Rate of Change (%) Factors
Sales 174,252 159,098 9.5 1)
Operating income 8,762 9,474 (7.5) -
Ordinary income 10,568 8,717 21.2 -
Current net income 4,929 4,278 15.1 -

1) Sales
-Sales recovered, after having fallen because of the slowdown that was triggered by the Great East Japan Earthquake and the flooding in Thailand. Nevertheless, sales fell after the eco-car sales incentives ended.  Also impacting sales were the costs involved with readjusting the product lineup of automotive parts. For the year, sales were 44,481 million yen, a year-on-year decrease of 1.7%.

<North America>
-Sales were 44,746 million yen, a 37.0% year-on-year increase, thanks to the strong automotive market; the recovery in sales, which had previously fallen because of the slowdown that was triggered by the Great East Japan Earthquake and the flooding in Thailand; and favorable currency translation due to the low valuation of the yen.

-Sales were 71,018 million yen, a 9.1% year-on-year increase. The following factors contributed to the growth in sales: a recovery in sales, which had previously fallen because of the slowdown that was triggered by the Great East Japan Earthquake and the flooding in Thailand, and the volume of new business won that overcame the movement in China to not buy Japanese products.

<South America, Europe>
-Sales fell 13.2% year-on-year, to 14,007 million yen because of a slowdown in the motorcycle market in Brazil and negative currency translation due to the high evaluation of the yen. This was in spite of the automobile market growing in Brazil, and the Company's winning a huge volume of new orders in Europe.

Recent Development Outside Japan

Reorganizing Production Operations for Brake Parts
- The Company is going to revamp its product line at its U.S. facilities by transferring production of some brake parts to its new Mexican Plant, which is coming into commercial operations in January next year. Shifting production to Mexico will allow the company to take advantage of lower production costs in Mexico as well as limited delivery expenses to the U.S. based on the Free Trade Agreement. The Company intends to improve its price competitiveness in the market by making the most of such advantages. Due to strong sales of new vehicles in the U.S., operating rate at the Company's U.S. facilities have remained high. “Demand for brake parts will definitely be on the rise in the country, where automakers are planning new model releases”, says Eiji Okawara, president of the Company. By establishing a cooperative framework between the new Mexican Plant and the existing U.S. operations, the Group aims to cater to the growing demand in both countries and substantially improve the profitability of its U.S. business. (From an article in the Nikkan Jidosha Shimbun on Jan. 22, 2013)

New Subsidiary to Manufacture and Supply Auto Parts
- The Company announced that it will establish a new production subsidiary “Nissin Brake de Mexico, S.A. de C.V.” in Irapuato city of Guanajuato in Mexico next month. The new company will be capitalized at 4.3 million Mexican pesos (approx.2.5 billion yen), funded all by the Company. The subsidiary will produce and supply products for four-wheel vehicles taking advantage of the Free Trade Agreement, aiming to enhance Nissin group's product competitiveness in the region. In addition, the plant will be built at the site of around 100,000 square meters, at which the Company looks to begin mass production in January 2014. About 300 employees are to be hired by FY 2016. (From an article in the Nikkan Jidosha Shimbun on Oct. 30, 2012)


-The Company received its first contract for supplying its aluminum knuckles to Suzuki Motor Corp. The knuckles will be fitted on the two-wheel-drive model of the partially remodeled Alto ECO mini-car, which will go on sale on March 4. Switching from conventional steel knuckles to lighter aluminum knuckles has been increasing primarily on non-mini vehicles, but the Alto ECO will become the first mini vehicle model to shift to aluminum. The revamped Alto ECO model features the best fuel efficiency of any gasoline-powered cars, which was achieved through various weight reduction measures, including use of aluminum knuckles. The Company is poised to step up marketing activities targeted at mini vehicle manufacturers as well. (From an article in the Nikkan Jidosha Shimbun on Feb. 28, 2013) 

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

Outlook for FY ending Mar. 31, 2014

(in million JPY)
  FY ending Mar. 31, 2014
FY ended Mar. 31, 2013
(Actual Result)
Rate of
Change (%)
Sales 214,000 174,250 22.8
Operating income 18,000 8,760 105.4
Ordinary income 19,500 10,570 84.5
Net income 10,500 4,920 113.4


R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 6,853 6,283 6,165

R&D Structure

-R&D facilities: Tochigi R&D Center (Nasukarasuyama City, Tochigi Pref.), Nagano R&D Center (Tomi City, Nagano Pref.)

-With a global perspective in mind, the Company is developing products, materials, and manufacturing methods in the pursuit of making its products designed mainly for two- and four-wheel vehicles lighter, smaller, more fuel efficient, safer and more comfortable. These include basic brake systems, mechatronics-based automatic control-systems, and aluminum products, which form the backbone of its product range.
-The Company is working to develop products, materials, and manufacturing methods that contribute to reducing CO2 emissions.
-The Company announced that for development of brake systems used in automobiles and motorcycles, it has begun to construct a new test track, which will extend over Asahikasa City and Kamikawa District, Hokkaido, Japan. The new track will cover approximately 480,000 square meters. The company is investing some 700 million yen in the first phase. Construction began in September 2012 and is expected to be completed in November 2014. (From a press release on October 11, 2012)

<North America>
-The Company focused on developing products that meet the market needs in North America, such as basic braking systems, mechatronic automatic control systems, and aluminum products.

Major R&D Achievements in Automobile Parts

Development of an automatic control mechatronics system
-The new VSA (vehicle stability assist) mechanism the Company developed, which is more compact and lighter in weight than conventional ones, is being equipped on four vehicle models.
-The electric, turbo type regenerative braking system for EVs and hybrid vehicles, which advanced regenerative braking systems even further, is being equipped on two vehicle models.
-The 4WS actuator, which independently controls the rear two wheels to achieve a high level of revolution performance and stable control under a wide range of driving conditions by optimally controlling the rear toe angle, is being equipped on one vehicle model.

Foundation brake development
-To respond to the requirement for lower fuel consumption, the Company optimized and expanded the development of products for brakes, such as a plunger master cylinder that is more compact, lighter in weight, and has less drag torque. Also, the Company is lowering costs and producing more products locally at its global sites.
-The Company further developed its series of new-design, low-drag, front disk brake systems, which it started to commercially produce during the last fiscal year, and launched commercial production of a different sized one for one model vehicle at its North American plant.
-The Company is making preparations to launch production of a plunger-type master cylinder in Thailand, India, Brazil, and Indonesia, following the launch of commercial production in the U.S.A and China.
-In a business sector new to the Company, it launched production in Japan of a nozzle-bracket assembly with a washing function. This new assembly, which is designed for onboard monitors, is being equipped on two model vehicles.

Development of weight reduction technology
-The Company's new, aluminum-made, lighter weight engine-mounting bracket is being equipped on six vehicle models. Its cast-aluminum rear knuckle is being equipped on five model vehicles. In addition, its cast-aluminum knuckle for compact cars, which is 45% lighter than cast-iron products, is being equipped on two vehicle models.

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Japan 1,683 1,530 1,188
North America 1,962 3,112 2,584
Asia 7,541 5,606 2,775
South America/Europe 456 755 646
Adjustment (210) (132) (317)
Total 11,431 10,872 6,876

-The Company will make a capital investment of 12 billon yen in fiscal 2012, an increase of 1.1 billion over the previous year, 7.3 billion of which will be invested in Asia, ASEAN countries in particular. The amount for Asia will represent an increase of 30 percent over the previous year in response to changeovers to new models and increasing product lineups by local automakers. During its current 11th mid-term business plan from fiscal 2011 through 2013, the Company planned capital investment totaling 30 billion yen, but is set to continue to make a high level of investment even after 2013 focused on Asia abounding in a potential for growth in sales, with total amount projected to rise much higher than originally planned. In the previous fiscal year, the Company invested around 10.9 billion yen, which includes 1.5 billion yen in Japan, 3 billion yen in North America and 5.6 billion yen in Asia, in enlarging its production capacity to meet demand for new models in North America and China, as well as increased supplies in Thailand and Indonesia. A total investment in the Asian region doubled from a year earlier. (From an article in the Nikkan Jidosha Shimbun on May 11, 2012)

Planned Capital Expenditure

(As of Mar. 31, 2013)
Company or Office Name Facility type Estimated
amount of
(in millions JPY)
Start Scheduled Completion
Ueda Plant
(Ueda City, Nagano Pref.)
Production facilities 826 Apr.
Tobu Plant
(Tomi City, Nagano Pref.)
Production facilities 373 Jun.
Naoetsu Plant
(Joetsu City, Niigata Pref.)
Production facilities 343 Dec.
Nagano Development Center
(Tomi City, Nagano Pref.)
R&D facilities 1,328 Oct.
Nissin Brake Ohio Inc.
(Ohio, USA)
Production facilities 2,427 Oct.
Nissin Brake Georgia Inc.
(Georgia, USA)
Production facilities 1,671 Oct.
Nissin Brake (Thailand) Co., Ltd.
(Nakornratchasrima, Thailand)
Production facilities 3,245 Oct.
P.T. Chemco Harapan Nusantara
(Cikarang, Indonesia)
Production facilities 1,654 Jul.
Shandong Nissin Industry Co., Ltd.
(Shandong, China)
Production facilities 146 Oct.
Zhongshan Nissin Industry Co., Ltd.
(Guangdong, China)
Production facilities 3,472 Oct.
Nissin Brake Vietnam Co., Ltd.
(Vinh Phuc, Vietnam)
Production facilities 195 Jan.
Nissin Brake India Pvt. Ltd.
(Rajasthan, India)
Production facilities 485 Apr.
Nissin Brake Do Brasil Ltda.
(Manaus-Am, Brazil)
Production facilities 1,757 Oct.