TACHI-S Co., Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of Change (%) Factors
Sales 192,172 221,498 (13.2) -Although sales of car seats have somewhat recovered both in and outside Japan, overall revenue decreased from the previous year's result due to weak sales in the first half of the year.
Operating income 6,051 623 871.3 -
Ordinary income 7,938 (291) - -
Net income 3,786 (3,704) - -
Automotive seat
Sales 191,578 220,893 (13.3) -
Operating income 6,651 1,225 442.9 -

Joint Venture

-The Company announced that it will start production in Thailand and India, jointly with Lear Corp., U.S.A. They will establish new companies in both countries early next month to start mass-producing seats for the Nissan's ultra mini V-platform vehicle in 2010, Their joint ventures, named TACLE Seating, have successfully supplied seats to Nissan's overseas plants from Tennessee, U.S.A. and Tyne and Wear County, U.K. The two new plants will bring the total TACLE Seating joint ventures to four. TACLE Seating Thailand Co., Ltd., Rayong, will be capitalized at approx. 470 million yen, 51% held by Lear Corporation (Mauritius) Ltd. and 49% held by the Company. The total investment by the Company will be 230 million yen. Production is scheduled to start in Feb. 2010. (From an article in the Nikkan Jidosha Shimbun on Jul. 27, 2009)

Business Restructuring

-The Company has closed three plants in North America. Following the withdrawal from school bus seat manufacturing in the U.S., it will cut production of seats and seat covers in Canada and Mexico. Three plants in Saltillo, Mexico of Techno Trim, Inc., its joint venture with Johnson Controls, Inc. (JCI), U.S.A. for seat cover production, have been consolidated into two. Production bases of Techno Trim have therefore been reduced to four including its two plants in the U.S. In Canada, the Company has closed a plant of SETEX Canada GP, Ontario, another joint venture with JCI for Honda vehicles' seats. Production will continue at JCI's idle facilities near by and the corporate organization will survive. (From an article in the Nikkan Jidosha Shimbun on June 8, 2009)

-The Company announced that it has shut down the No.2 Plant at its Suzuka facility (Suzuka City, Mie Prefecture), which had been supplying seats to Honda and other automakers. The majority of its manufacturing equipment and workforce will be transferred to the No.1 Plant. This is the second plant closure at its domestic facility ever since the economic crisis began affecting car production severely. In Dec. 2008, the Company closed down its Oppama Plant (Yokosuka City, Kanagawa Pref.), as it discontinued production of some product items. Shutdown of the two plants is expected to contribute to a 2.9 billion yen reduction in fixed and variable expenses per year, starting 2009 fiscal year. (From an article in the Nikkan Jidosha Shimbun on July 13, 2009)

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

Outlook for FY2010

(in millions of JPY)
Year-on-year Fluctuation
Sales 186,000 192,200 (6,200)
Operating income 58 61 (3)
Ordinary income 71 79 (8)
Net income 36 38 (2)
R&D Expenditure 3,731 1,072 2,659
Investment Expenditure 2,932 2,482 450

Sales by Customer

(in millions of JPY)
Sales Percentage Sales Percentage
Honda Group 70,100 38% 74,400 39%
Nissan Group 72,300 39% 67,600 35%
Toyota Group 23,100 12% 26,300 14%
Mitsubishi Group 16,400 9% 15,600 8%
Others 4,100 2% 8,200 4%

Sales by Location

(in millions of JPY)
Sales Percentage Sales Percentage
Japan 100,000 54% 109,500 57%
USA 37,400 20% 39,100 20%
Canada 9,300 5% 11,000 6%
Mexico 21,800 12% 18,500 10%
China 15,600 8% 13,400 7%
France 1,900 1% 700 -

Long-term vision "Challenge-15"

1. Key markets
The Company intends to move its focus from Japan, Europe and the U.S.A. to emerging countries by further developing the Asian market, especially China.

2. Improving product value
-The Company is strengthening the product value of its technologies (environmental technology, safety technology, and weight-reduction and downsizing technology).
-The Company developed the C-15 seat frame system, which is a next-generation seating system offering 360-degree protection against collisions and featuring environmentally friendly components.

3. 'Monozukuri' (product manufacturing)
Production operations conducted at multiple countries will be controlled comprehensively at the planned 'Monozukuri' Center in Japan.
-The Company is integrating 'monozukuri' (product manufacturing) functions into its Monozukuri Center, which is scheduled to be completed at the end of December 2012.
The new facility will establish and standardize core technologies and transfer the know-how to its global operations.

4. Business tools
Using standard seat frames
-The Company is ensuring a stable production volume by supplying seats based on a common frame to a number of customers.

Trim covers
-The Company will increase the percentage of sewn trim covers produced in China in order to reduce production costs. It is planning to establish a second plant at its Guangzhou facility, positioning it as a supply hub for trim covers to Japan. After the new plant starts production, the ratio of trim covers sewn in China is expected to increase to 70 percent out of the entire amount produced in fiscal year 2012, from the current 25 percent produced in China in fiscal year 2009.

5. Enhancing global procurement system
-The Company will migrate from using parts manufactured in Japan to those made by parts suppliers locally in countries where it operates.
-The Company will increase the volume of components it procures from China and other leading cost-competitive (LCC) countries.


R&D Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 2,482 3,575 4,528

R&D Facilities

Tachi-S Technology Center
Oume City, Tokyo
Tachi-S Technology Center Aichi Anjo City, Aichi Pref.
Tachi-S Engineering U.S.A. Inc. Michigan, USA
Tachi-S Engineering Europe S.A.R.L. France
Tachi-S Engineering China Fuzhou, China

R&D Activities

-The Company conducted development of new products and basic development of technologies, mainly at its technical center in Japan.
-The Company collects information on advanced technologies and peripheral technologies through its facilities in the U.S.A. and Europe as well as technological tie-up partner companies at home and abroad.

Seats and original mechanical parts
Development of car and other vehicle seats, seat reclining devices, slide rails, heavy-duty lifters, under floor storage devices, long-slide rails and accessories for RVs, rotating units, egress-ingress support systems, etc.

Safety improvement technologies

Development of seats with three-point seat belts, seats with side airbags, seats for smart air bags which can detect passengers, alleviation system against cervical injury systems, safety seats which protect the passengers when the vehicle is collided on the front/back/side

Environmental technologies
Study of easy-to-scrap seats and development of ultra-light seats made of new materials for Improvement in car fuel consumption, utilizing new structural technologies.

Developed products used on vehicles for physically challenged
Developed a helper seat that is easily operated and makes its easier to get in and out of vehicles.

Low-cost products
Standardized and interchangeable Next-generation, low-cost seats in order to shorten development period.

Development of 1) improved technologies for bonding forming seats 2)technologies for one-piece foam molding of headrest and armrest 3) technologies for labor-saving and automatic seat assembly 4) pattern making technology using CAD/CAM etc. Recently, the Company developed a multi-product production line which is capable of producing a wide variety of products in small lots.

Research on seats
Evaluation on seating comfort and in house-research on the design structure of seat construction.
Reduction of time needed for developing new products, and cost-cutting measures through CAE analysis.

Licensing of Technology from Other Companies

(As of Mar. 31, 2010)

Partner Country Contract Contract period
Isringhausen GmbH & Co. KG Germany -Licensing-in of manufacturing technology and distributorship for suspension systems.
-Sharing and licensing of manufacturing technology and sales know-how for seats (patented items are excluded)
Nov. 1985
for an indefinite period
(Subject to expiration with a prior notice of 6 months)

Licensing of Technology to Other Companies

(As of Mar. 31, 2010)

Partner Country Contract Contract period
Auto Parts Manufacturers Co., Sdn. Bhd. Malaysia -Licensing-out of manufacturing know-how for agreed items
-Technological assistance on manufacturing equipment for agreed items (specific agreement is required) etc.
Mar. 2000 - Mar. 2015

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 1,072 2,839 5,609

-The Company invested in the installation of new facilities to respond to new orders and remodeling.

Planned Capital Investments

(As of Mar. 31, 2010)

Investment targets Estimated amount of investment (million JPY) From To
Monozukuri Center
Sales, procurement, designing, development, prototype production, and all technical fields including testing. 2,392 May, 2010 Dec. 2011
Aichi Plant Equipment for manufacturing automotive seats 653 May, 2010 Dec. 2011
Tochigi Plant Equipment for manufacturing automotive seats 550 Apr. 2010 Dec. 2010
Ohme Plant Equipment for manufacturing automotive seats 331 June, 2010 Sep. 2010
Industria de Asiento
Superior, S. A. de C. V.
Headquarter Plant
Equipment for manufacturing automotive seats 291 Mar. 2010 Dec. 2010
Tacle Guangzhou Automotive Seat Co., Ltd.
Headquarter Plant
Equipment for manufacturing automotive seats 279 Dec. 2009 Aug. 2010
Technology Center Upgraded technical information system
194 Apr. 2010 Jan. 2011
Musashi Plant Equipment for manufacturing automotive seats 99 Apr. 2010 Aug. 2010
Hiratsuka Plant Equipment for manufacturing automotive seats 78 May, 2010 Dec. 2010