Fuji Kiko Co., Ltd. Business report FY2006
Business Highlights
Financial overview
Factors
1) Overall:
The Company's capital and business alliances with JTEKT in the steering parts business and with Tachi-S in the seat parts business, as well as full commercial production at subsidiaries overseas, contributed to an increase in consolidated sales by 13.7%.
On the other hand, operating income and ordinary income were both down, affected by a rise in costs to prepare production for new orders. The drop in operating and ordinary income was also impacted by sluggish sales of steering parts at a subsidiary in North America and increased costs to strengthen quality control.
2) Steering parts business:
Despite the negative impact caused by decreased production volume of existing vehicle models at its major customers, sales of new vehicle models grew in and outside Japan, thanks to the synergy effects resulting from its alliance with JTEKT and full commercial production at its subsidiaries overseas, which led to favorable results.
3) Seat parts business
Despite the negative impact caused by decreased production volume of existing vehicle models by its major customers, sales of new vehicle models grew in and outside Japan, thanks to the synergy effects resulting from its alliance with JTEKT and full commercial production at its subsidiaries overseas that were added into the consolidated results, contributing to the favorable performance.
4) Shifter parts business
The positive effect from the launch of new vehicle models in and outside Japan was partially offset by decreased production volume of existing vehicle models by its its major customers, leading to a decrease in overall sales. In spite of the decline in sales, the operating loss improved.
5) Engine parts business
The positive effect from the launch of new vehicle models was offset by a decrease in production volume of existing vehicle models by its major customers, leading to decreased sales and profit.
6) Large-vehicle parts business
The Company recorded decreases in both sales and profit due to sluggish demand by consumers to purchase new vehicles that comply with the Automobile NOx and PM Law.
| (in millions of JPY) | FY2006 | FY2005 |
Rate of Change(%) |
Factors |
| Overall | ||||
| Sales | 106,366 | 93,514 | 16.3 | see note 1) below |
| Operating income | (206) | (411) | - | |
| Ordinary income | (691) | (447) | - | |
| Current net income | 274 | (667) | - | |
| Steering parts business | ||||
| Sales | 48,889 | 43,341 | 29.2 | see note 2) below |
| Operating income | (906) | (509) | - | |
| Seat parts business | ||||
| Sales | 31,295 | 26,011 | 16.5 | see note 3) below |
| Operating income | 154 | 264 | (41.8) | |
| Shifter parts business | ||||
| Sales | 9,898 | 11,026 | 10.5 | see note 4) below |
| Operating income | (17) | (485) | - | |
| Engine parts business | ||||
| Sales | 5,979 | 6,228 | 1.2 | see note 5) below |
| Operating income | 165 | 178 | 143.4 | |
| Parts for large vehicles business | ||||
| Sales | 1,592 | 1,627 | (5.3) | see note 6) below |
| Operating income | 76 | 84 | (35.0) | |
| Other automotive components business | ||||
| Sales | 1,454 | 1,890 | (28.7) | - |
| Operating income | 100 | 48 | (50.9) | |
Factors
1) Overall:
The Company's capital and business alliances with JTEKT in the steering parts business and with Tachi-S in the seat parts business, as well as full commercial production at subsidiaries overseas, contributed to an increase in consolidated sales by 13.7%.
On the other hand, operating income and ordinary income were both down, affected by a rise in costs to prepare production for new orders. The drop in operating and ordinary income was also impacted by sluggish sales of steering parts at a subsidiary in North America and increased costs to strengthen quality control.
2) Steering parts business:
Despite the negative impact caused by decreased production volume of existing vehicle models at its major customers, sales of new vehicle models grew in and outside Japan, thanks to the synergy effects resulting from its alliance with JTEKT and full commercial production at its subsidiaries overseas, which led to favorable results.
3) Seat parts business
Despite the negative impact caused by decreased production volume of existing vehicle models by its major customers, sales of new vehicle models grew in and outside Japan, thanks to the synergy effects resulting from its alliance with JTEKT and full commercial production at its subsidiaries overseas that were added into the consolidated results, contributing to the favorable performance.
4) Shifter parts business
The positive effect from the launch of new vehicle models in and outside Japan was partially offset by decreased production volume of existing vehicle models by its its major customers, leading to a decrease in overall sales. In spite of the decline in sales, the operating loss improved.
5) Engine parts business
The positive effect from the launch of new vehicle models was offset by a decrease in production volume of existing vehicle models by its major customers, leading to decreased sales and profit.
6) Large-vehicle parts business
The Company recorded decreases in both sales and profit due to sluggish demand by consumers to purchase new vehicles that comply with the Automobile NOx and PM Law.
Joint Venture
The Company agreed on August 11, 2006 with Summit Auto Body Industries
and Kurata Sangyo Co., Ltd. to establish a joint venture company
in Thailand. The joint venture company, Summit Fujikiko Kurata Manufacturing
Co., Ltd., will produce steering columns. By setting up a production
base in Thailand the supplier will cater to a growing demand from
Japanese automakers located in the ASEAN region and prepare for
its future plan to export automobile parts to North America. The
new company is capitalized at 120, 000, 000 TBH (approximately 360,
000, 000 yen, with 51% by Fuji Kiko Co., Ltd., 45% by Summit Group,
and 4% by Kurata Sangyo Co., Ltd.) (From a press release by the
company in Aug, 2006)
R&D
R&D
Expenditure
R&D Section
-A total of 376 staff members conducted R&D; some of these staff members are engaged in trial manufacturing and experiments. Of this, 361 staff members worked in the automotive parts business.
-The total number of R&D industrial property rights was 136. (All in the automotive parts business.)
R&D Activities for FY2006
Steering Parts
-The Company achieved the needed functions and performance requirements for steering columns through establishing a very rational mechanism and architecture. The Company also is working on reducing costs by raising the level of technology on processing (against deforming) and lightening weight, in addition to improving safety and marketability.
-The Company worked to strengthen its tri-regional R&D structure (Japan, the U.S.A. and Europe) in order to respond to increasing globalization activities by its customers. In addition, it is committed to strengthening its competitiveness and reinforcing its product line-up, especially taking into consideration its customers located in the U.S.A. and Europe.
- The Company started expanding its business into India in 2006.
- Jointly with automakers and systems makers, the Company engages in developing future technologies and products to improve running performance.
Seat Parts
-Develop the core, functioning parts for seats such as seat recliners, height adjusters and seat slides, as well as develop functional systems.
-Currently working on making produces more compact, lighter in weight and higher in strength and functions, plus reducing costs.
-In order to improve rider usability, developing RV vehicle seats whereby the positions can be changed.
Shifter Parts
- By rationalizing its organizational structure to reduce costs, the Company is working on commercializing transmission shifters and developing automatic transmission shifters that are lighter in weight, hoping to enhance its competitive edge.
- The Company is continuously improving its products to enhance their operating performance such as in terms of feel or sound.
- The Company is conducting development activities to make products more compact.
Engine Parts
-The Company worked on developing engine parts such as various forms of pulleys and drive plates etc., which respond to market needs, by utilizing its proprietary plastic forming technology, analysis technology, and know-how as typified by a thick-forming method for plate materials and a slit-forming method.
Parts for large vehicles
- Mainly developing manual transmission and automatic transmission control parts
Technical Transfer Agreements (Inward) (as of March 2007)
Technical Licensing Agreements (Outward) (as of March 2007)
| (in millions of JPY) | FY2006 | FY2005 | FY2004 |
| Overall | 1,394 | 1,460 | 1,994 |
| Automotive Parts Division | 1,371 | 1,406 | 1,972 |
| -Steering parts business | 498 | 491 | 986 |
| -Seat parts business | 525 | 515 | 538 |
| -Shifter parts business | 168 | 191 | 189 |
| -Engine parts business | 116 | 132 | 152 |
| -Parts for large vehicles business | 32 | 35 | 42 |
| -Other Automotive Parts | 29 | 40 | 63 |
R&D Section
-A total of 376 staff members conducted R&D; some of these staff members are engaged in trial manufacturing and experiments. Of this, 361 staff members worked in the automotive parts business.
-The total number of R&D industrial property rights was 136. (All in the automotive parts business.)
R&D Activities for FY2006
Steering Parts
-The Company achieved the needed functions and performance requirements for steering columns through establishing a very rational mechanism and architecture. The Company also is working on reducing costs by raising the level of technology on processing (against deforming) and lightening weight, in addition to improving safety and marketability.
-The Company worked to strengthen its tri-regional R&D structure (Japan, the U.S.A. and Europe) in order to respond to increasing globalization activities by its customers. In addition, it is committed to strengthening its competitiveness and reinforcing its product line-up, especially taking into consideration its customers located in the U.S.A. and Europe.
- The Company started expanding its business into India in 2006.
- Jointly with automakers and systems makers, the Company engages in developing future technologies and products to improve running performance.
Seat Parts
-Develop the core, functioning parts for seats such as seat recliners, height adjusters and seat slides, as well as develop functional systems.
-Currently working on making produces more compact, lighter in weight and higher in strength and functions, plus reducing costs.
-In order to improve rider usability, developing RV vehicle seats whereby the positions can be changed.
Shifter Parts
- By rationalizing its organizational structure to reduce costs, the Company is working on commercializing transmission shifters and developing automatic transmission shifters that are lighter in weight, hoping to enhance its competitive edge.
- The Company is continuously improving its products to enhance their operating performance such as in terms of feel or sound.
- The Company is conducting development activities to make products more compact.
Engine Parts
-The Company worked on developing engine parts such as various forms of pulleys and drive plates etc., which respond to market needs, by utilizing its proprietary plastic forming technology, analysis technology, and know-how as typified by a thick-forming method for plate materials and a slit-forming method.
Parts for large vehicles
- Mainly developing manual transmission and automatic transmission control parts
Technical Transfer Agreements (Inward) (as of March 2007)
| Country | Licensor | Content | Period |
| German | Keiper GmbH&Co. | Production technology for seat reclining mechanism and head-rest adjusters |
1987.09.25 -
2007.04.11 (automatic renewal) |
| Patent license for wedge-type seat reclining mechanism |
1997.04.18 -
2008.03.31 (automatic renewal) |
||
| Germany | Dr.Ing.h.c.f.Porsche AG | Patent license for automatic transmission control devices | 1995.11.30 - 2008.03.09 |
| Germany | Winkelman Pannhoff GmbH | Production technology for one piece drive-plates |
1996.01.29 -
2008.01.28 (automatic renewal) |
Technical Licensing Agreements (Outward) (as of March 2007)
| Country | Licensee | Content | Period |
| Taiwan | Taiwan Atsugi Co., Ltd. | Production technology for steering column |
1992.10.06 - 2007.10.05 (automatic renewal) |
| Thailand | Srithai Auto Seats Industry | Production technology for seat reclining device | 5 years from 1996.07.04 or the date of the production life of the specified model (whichever is longer) |
| Taiwan | Joyu-Fuji Machinery Co., Ltd. | Production technology for A/T device, M/T linkage and pulley |
1996.10.08 - 2007.10.07 (automatic renewal) |
| Thailand | Thai Steel Cable Co., Ltd. | Production technology for window regulator | Ten years from 2000.01.12 |
| Malaysia | Auto Parts Manufacturers Co. SDN BHD |
Production technology for seat reclining devices and sheet lifters |
5 years from 2003.03.25 (automatic renewal) |
| China | Shye Fu Koyo (Xiamen) Mechanical Industry Co., Ltd. | Production technology for steering columns |
From 2005.12.1 (automatic renewal) |
| USA | Douglas Autotech Corporation | Production technology for steering columns and automatic transmission devices | Five years from April 1, 2006 or the production life of the specific vehicle models |
| USA | Fuji Autotech U.S.A L.L.C. | Production technology for seat reclining devices, seat lifters, and seat sliding mechanisms | Five years from April 1, 2006 or the production life of the specific vehicle models |
| Czech | Fuji koyo Czech s.r.o. | Production technology for steering columns and intermediate shafts | Five years from April 1, 2006 or the production life of the specific vehicle models |
| France | Fuji Autotech France S.A.S. | Production technology for seat reclining devices, seat lifters, and seat sliding mechanisms | Five years from April 1, 2006 or the production life of the specific vehicle models |
| Indonesia | PT. Autotech Indonesia | Production technology for steering columns and intermediate shafts | Five years from April 1, 2006 or the production life of the specific vehicle models |
| China |
Fuji Autotech Guangzhou Co., Ltd. |
Production technology for seat reclining devices, seat lifters, and seat sliding mechanisms | Ten years from April 1, 2006 |
Basic Partnership Agreement (as of March 2007)
| Country | Partner | Overview | Signed |
| Japan | TACHI-S CO., LTD. | To form a business and capital alliance on automotive seats in a wide range of fields from development to sales. | 1999.08.30 |
Investment Activities
Capital
Expenditure
Facility upgrade (automotive parts production facilities)
| (in millions of JPY) | FY2006 | FY2005 | FY2004 | |
| Overall | 7,165 | 6,940 | 4,826 | |
|
Automotive Parts Division |
Steering parts | 3,303 | 4,100 | 1,956 |
| Seat parts | 3,234 | 2,164 | 2,515 | |
| Shifter parts | 245 | 298 | 350 | |
| Engine parts | - | 8 | 5 | |
| Parts for large vehicles | - | - | - | |
| Other Automotive Parts | 382 | - | - | |
- In the auto parts business dealing in the steering business, seat business and shifter business, the Company made capital investments mainly for improving its production structure to manufacture new products in response to new orders and model changes
Restructuring Production Structure
The Company will restructure its production system in its Arai Factory
in Hamana-gun, Shizuoka Prefecture. The 1st and 2nd plants in Arai
Factory will specialize in stamping parts, implementing a layout
change. The company aims to enhance production capacity and efficiency
in response to the brisk orders received from automakers. Fuji Kiko
established the 3rd plant within the premises of Arai Factory, which
manufactures steering components, in December 2005. The assembly
work of steering columns currently performed at the 1st plant will
be consolidated to the 3rd plant. (From a story in the Nikkan Jidosha
Shimbun on Jun 12, 2006)
New facilities (automotive parts production facilities)
| Business | Planned
investment (million JPY) |
Start | Completion | Production capacity increase on completion |
| Fuji Kiko Co., Ltd. Washizu Plant (Shizuoka Pref., Japan) | ||||
| Seat parts Engine parts |
2,530 | 2006.6 | 2008.3 | Approx. 10% capacity increase |
| Fuji Kiko Co., Ltd. Nii Plant (Shizuoka Pref., Japan) | ||||
| Steering wheel parts | 2,555 | 2007.1 | 2008.3 | Approx. 10% capacity increase |
| Fuji Kiko Co., Ltd. Honjo Plant (Saitama Pref., Japan) | ||||
| Shifter parts Parts for large vehicles |
1,773 | 2007.1 | 2008.3 | No change made |
| Fuji Autotech France S.A.S. (Beaulieu, France) | ||||
| Steering wheel parts | 1,396 | 2007.1 | 2007.12 | New facilities introduction |
| Fuji Koyo Czech s. r. o. (Plzen, Czech) | ||||
| Steering parts | 1,061 | 2007.1 | 2007.12 | Approx. 70% capacity increase |
| Douglas Autotech Corporation Hopkinsville Plant (Kentucky, USA) | ||||
| Steering wheel parts Shifter parts |
663 | 2007.1 | 2007.12 | No change made |
Facility upgrade (automotive parts production facilities)
| Business | Planned
investment (million JPY) |
Start | Completion | Production capacity increase on completion |
| Fuji Kiko Co., Ltd. Washizu Plant (Shizuoka Pref., Japan) | ||||
| Seat parts Engine parts |
61 | 2007.3 | 2008.3 | No change made |
| Fuji Kiko Co., Ltd. Nii Plant (Shizuoka Pref., Japan) | ||||
| Steering wheel parts | 138 | 2007.4 | 2008.3 | No change made |
| Fuji Kiko Co., Ltd. Honjo Plant (Saitama Pref., Japan) | ||||
| Shifter parts Parts for large vehicles |
68 | 2007.3 | 2008.3 | No change made |