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5. Denso Group (China) Business Report FY ended Dec. 2015

Denso Group (China) Business Report FY ended Dec. 2015

New Plant

-Denso Corporation announced that it has established a 50-50 joint venture with Kingtec Technologies (Heyuan) Co., Ltd., a Chinese refrigerator systems manufacturer, in Heyuan, Guangdong Province, China. The new company, Guangdong KINGTEC DENSO Refrigeration Equipment Co., Ltd., will develop, manufacture, and sell refrigerator systems for trucks and other applications. Production is scheduled to start in May 2016. The new company is capitalized at CNY 30 million (approximately USD 4.8 million), of which 50% was provided by Denso’s regional headquarters in China, Denso (China) Investment Co., Ltd., and 50% was provided by Kingtec. It will have a workforce of approximately 140 employees at the start of operations. (From a press release on March 25, 2016)

Recent Development

-Guangzhou Denso Co., Ltd, the joint venture of Guangzhou Automobile Group Component Co., Ltd. and Denso (China) Investment Co., Ltd. held opening ceremony for its new plant in Zengcheng. The new plant came into operation on the same day in Feb. 2014. The first year annual output value is expected to 4 billion yuan after the plant coming into operation. (From news releases issued by multiple sources on Feb. 26, 2014)

-Denso Corporation plans to expand its lineup of automotive aftermarket parts by procuring low-cost components from China and Southeast Asian countries. In its mid-term business plan covering from FY 2012 through FY 2015, Denso set a new standard for selling under its own brand low-cost, shorter lifetime components that meet the company's quality standard. The low cost products will be procured from local suppliers mainly in emerging countries. The initiative is likely to be implemented to products such as oil filters, air cleaners, and cabin air filters. The company plans to introduce the new product lineup in the Japanese market by March 2016. (From multiple source of news on May 25, 2015)

Acquisition

-Denso Group (China) announced that the company and Hefei dyne Automotive Air Conditioning Co., Ltd. signed a memorandum of understanding under which Denso will invest CNY 50 million to acquire a 34 percent shareholding in Hefei dyne Automotive Air Conditioning. Hefei dyne Automotive Air Conditioning will thereafter step up sales of air conditioner compressors by capitalizing on Denso’s global sales network. Hefei dyne Automotive Air Conditioning was established in 2012. During 2013, it produced over 380,000 compressors and generated CNY 160 million in sales. (From a press release on April 22, 2014)

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