NHK Spring Co., Ltd. Business Report FY ended Mar. 2013
|(in millions of JPY)|
|FY ended Mar. 31, 2013||FY ended Mar. 31, 2012||Rate of Change (%)||Factors|
|Suspension Springs Division|
|Sales||103,213||90,334||14.3||-New-vehicle production increased both in and outside Japan.|
|Sales||208,773||175,714||18.8||-New-vehicle production increased both in and outside Japan.|
|Precision Parts Division|
|Sales||123,373||99,961||23.4||-New-vehicle production increased both in and outside Japan.|
|Operating income||2,919||3,508||(16.8)||-Production of HDDs decreased.|
-The Company, Faurecia of France and Krishna Group of India have set up a joint venture and a plant to produce automotive seats near Chennai, South India. The plant will commence production in December 2013. This is the first automotive seat production plant for NHK Spring in India. The joint venture, NHK F. Krishna India Automotive Seating Private Limited, is 51% funded by NHK Spring, 30% by Indian auto parts manufacturer Krishna Group, and 19% by Faurecia. The plant will be located in the Oragadam Industrial Estate, near Chennai, having a total floor space of 3,500 square meters on an 8,000-square-meter land. NHK Spring has tied up with Faurecia in supplying seats to Nissan Motor. The joint venture will also supply seats to Nissan Motor in India. (From an article in the Nikkan Jidosha Shimbun on Mar. 14, 2013)
-The Thai subsidiary of the Company and Grupo Antolin-Irausa, S.A., have signed an agreement to establish a joint venture to produce automotive headliners in Thailand. The new company, called NHK Antolin Thailand Co. Ltd., will be located in Bangkok and produce components for the main car manufacturers in the country: Ford, Nissan, Honda, GM, Isuzu and Mitsubishi. It will employ almost 100 people and is expected to generate a turnover of 23 million euros in 2014. (From a press release on November 5, 2012)
-The Company was awarded a contract for supplying suspension springs to Volkswagen of Germany. The products will be delivered to VW's Tennessee plant in the U.S., starting January 2013. This is the first time for the Japanese spring manufacturer to do business with a European company in the area of seating and suspension springs business, and its coil springs will be used in the current Volkswagen "Passat". In addition to serving Japanese auto manufacturers, the company has also been dealing with General Motors and Ford Motor of the U.S. in the suspension spring business. The springs for VW will be produced at NHK's existing plant in Kentucky, U.S.A. By taking advantage of this first order in the U.S., the Company is going to boost sales activities targeting Volkswagen, looking to expand its supply area. (From an article in the Nikkan Jidosha Shimbun on Nov. 21, 2012)
Recent Development Outside JapanStepping up its seat business in emerging countries
-The Company is going to step up its seat business in emerging countries. The Company will establish new seat production facilities in India and Indonesia through a joint investment with Faurecia, its partner company based in France. The seats produced at the new plants will be used in low-priced vehicles Nissan is assembling in emerging markets. NHK Spring, known as a leading suspension spring supplier, is positioning the seat products as an equally important product line. The Company aims to win more programs from Japanese automakers, including its major customer Nissan, which are boosting production and sales in developing countries. (From an article in the Nikkan Jidosha Shimbun on Nov. 26, 2012)
-The Company will transfer production of suspension springs for Toyota Motor East Japan, Inc. (headquarters: Miyagi Prefecture) from Yokohama Plant to Tohoku Nippatsu (headquarters: Iwate Prefecture), its production subsidiary in the Tohoku region (northeast Japan). Based on this plan, a dedicated, compact production line newly developed by NHK Spring will be introduced to the Iwate facility with a plan to start product delivery in October 2013. Toyota Motor East Japan previously announced its intention to develop a strong procurement network in the Tohoku region for improving its cost competitiveness in the compact car segment. In response to such initiatives, NHK Spring is shifting to local production by installing the space-saving production line requiring minimum investment. Using the new cold forming line, Tohoku Nippatsu will be able to produce 140,000 suspension springs a month, which covers almost all the volume currently supplied from the Yokohama Plant in the Kanto region. (From an article in the Nikkan Jidosha Shimbun on Jan. 16, 2013)
Outlook for FY ending Mar. 31, 2014
|(in millions of JPY)|
|FY ending Mar. 31, 2014
|FY ended Mar. 31, 2013
|Rate of Change
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income, etc.)
|(in millions of JPY)|
|FY ended Mar. 31, 2013||FY ended Mar. 31, 2012||FY ended Mar. 31, 2012|
|Ratio of R&D expenses to sales (%)||2.3||2.3||2.1|
R&D Structure-R&D activities at the Company are conducted by the following functions: Headquarters R&D Center, Technical Development Center, each of the production and business divisions' R&D functions, design functions, and R&D functions at each subsidiary.
-As of March 2013, the Company had 852 staff working in R&D, which is 5.5% of the workforce.
R&D ActivitiesSuspension Spring Division
-R&D Expenses: 1,687 million yen
-Major issues: Making coil-springs and stabilizers less costly, stronger, and more tapered; making leaf-springs less costly and stronger.
-Major achievements: The Company succeeded in improving durability, ensuring quality, and further reducing prices.
-Future areas of R&D activities: Development of strong, light-weight, and inexpensive materials; as well as development of processes that reduce costs.
-R&D Expenses: 4,375 million yen
-Major R&D Activities: In reducing product weight, the Company researched a new structural design for seat frames, applied high-tensile steel, and switched from steel to new materials. It also improved structural parts. In addition, it conducted R&D activities to reduce seating fatigue and improve riding comfort, designs, overall seat performance, product appeal and competitiveness. Especially, in working to quantify the evaluation of riding comfort, the Company studied ways to measure performance and develop streamlined performance in regard to the stability of the dynamic posture of occupants while they are riding. In working to reduce costs, the Company improved and developed new ways of soldering, studied new ways to automate, and improved productivity.
-Major achievement: Established a production method that combines thin sheet metal and CFRP materials, wining new orders for standard seat frames and fully assembled automotive seat systems.
Precision Parts Division
-R&D Expenses: 3,165 million yen
-The Company developed precision springs for automotive engines and transmissions. In working on next-generation products, it developed motor cores by using technology on high-precision stamping processes; parts for fuel cells, and weight-reduction technology that works to improve fuel efficiency.