TACHI-S Co., Ltd. Business Report FY2010
|(in millions of JPY)|
|FY2010||FY2009||Rate of Change (%)||Factors|
-For the year as a whole, the Company had a strong backlog of orders for automotive seats from both in and outside Japan, although it was negatively affected by the reduction in the production volumes at its major car-maker customers after the Great East Japan Earthquake.
-For the entire year, the Company experienced strong sales of automotive seats, recording sales of 114 billion, 818 million yen for the year, a 4.9% year-on-year increase. It business operating profit increased 60.9% year-on-year, reaching 4 billion, 53 million yen. This was due to the good performance posted for the first-half of the year, when economic stimulus programs were in effect and there was a last-minute sales rush by consumers to take advantage of eco-car sales incentives that were coming to an end. However, the Company was negatively impacted during the second-half of the year, when demand for autos waned in the wake of the sales incentives coming to an end, and the negative effects of the Great East Japan Earthquake were felt.
-Due to the recovery in demand for automobiles, sales reached 42 billion, 540 million yen for the year, which was an 8.8% increase year-on-year. The business operating profit was 2 billion, 884 million yen, or a 58% year-on-year increase.
-Sales in Canada were 14 billion, 49 million yen, a year-on-year increase of 27.4%, thanks to the recovery in demand in North America for automobiles, and to the benefits that resulted from more aggressive sales promotions conducted by its major automotive customers. Business operating profit was 726 million yen, a year-on-year increase of 565.7%.
-Thanks to the recovery in demand in North America for automobiles, sales grew 27.5% year-on-year, to 25 billion, 395 million yen; and business operating profit rose by 238.9%, to 1 billion, 613 million yen.
-As a result of increased sales of auto parts, total sales for the year reached 1 billion, 619 million yen, a 131.1% year-on-year increase. Business operating profit grew 134.6% year-on-year, to 45 million yen.
-Due to the continued high demand for automobiles in China, sales reached 20 billion, 385 million yen, a 52.0% year-on-year increase; and business operating profit grew 103.5% year-on-year, to 2 billion, 213 million yen.
Business Partnership-Johnson Controls, Inc. a major U.S. supplier of automotive interiors, said it will form a strategic comprehensive partnership with Tachi-S Co., Ltd. on development and manufacture of automotive seating systems with the aim of winning the business from Japanese automakers. Johnson Controls will acquire a 5 percent equity stake in Tachi-S for about 1.7 billion yen, becoming the largest shareholder. Tachi-S will use the fund to construct a new technical center. The two companies have been maintaining cooperative relationship since 1980s in North America, Japan and China. While the U.S. supplier has been intending to expand the transaction with Japanese automobile manufacturers by offering products to meet their needs, the Japanese counterpart has been aiming to further enhance its competitive edge in the global market. These motives have coincided on both sides leading to the conclusion of the comprehensive alliance. (From an article in the Nikkan Jidosha Shimbun on Apr. 26，2010)
Recent Developments Outside Japan
-The Company will strengthen its technical proposal activities targeted at Chinese automakers. The company has won a program to supply seats to Geely Automobile of China, starting in May this year. Leveraging this business, Tachi-S is going to set a cost benchmark for developing and manufacturing products for the Chinese market, enhancing its capabilities to propose new technologies in the country. By widely introducing new measures that contribute to a significant reduction in cost when compared with seats supplied to Japanese automakers, the company aims to win new business from non-Japanese affiliated car manufacturers. (From an article in the Nikkan Jidosha Shimbun on March 8, 2011)
-The Company is considering making inroads into Indonesia for local production. In Indonesia where plants of its leading customers of automobile manufacturers are clustered, the seating supplier envisions manufacture at one plant of various types of seats for multiple automakers. By making a flexible response to each automaker’s demand from a single plant, Tachi-S aims to cut capital investment and fixed costs to establish production structure focused on efficiency. (From an article in the Nikkan Jidosha Shimbun on February 22, 2011)
-Fuji Kiko Co., Ltd., jointly with Hsin Chong International Investment Ltd. of Taiwan and Tachi-S Co., Ltd. of Japan, will establish a new company in China in January 2011. The new entity, which will be named Zhejiang Fu Chong Tai Automotive Parts Co., Ltd., will develop and manufacture automotive seat structure components in Jiashan, Zhejiang Province. The joint-venture company will start assembly operations for seat structure parts in November 2011, intending to produce each components in-house as well in the future. The 12 million USD venture will be 51.0 percent owned by Fuji Kiko, 40.0 percent by Hsin Chong International Investment, and 9.0 percent by Tachi-S. (From a press release on December 3, 2010)
-The Company announced that it will establish a new company, Shanghai Tachi-S Automotive Parts Co., Ltd., in China in October 2010. The Chinese subsidiary will manufacture vehicle seat structural parts, starting in March 2011. By 2015, Shanghai Tachi-S is expected to produce enough seats to equip around 1 million vehicles per year, generating approximately 9.5 billion yen in sales. Shanghai Tachi-S will be capitalized at 5.4 million yuan (approximately 700 million yen), which will be fully funded by Tachi-S. (From a press release on September 24, 2010)
-The Company will establish a new company in China in mid-September 2010, as a joint venture with Zhejiang Jujin Automotive Parts Co., Ltd. in Taizhou, Zhejiang Province and Zhejiang Geely Group Holding Co., Ltd. in Hangzhou, Zhejiang Province, to produce automotive seats and seat components for Geely. The new entity "Zhejiang Gee Ju Tai Automotive Seat Co., Ltd.", headquartered in Cixi, Zhejiang Province, will be capitalized at 38 million Chinese yuan (approximately 500 million yen). TACHI-S will hold a 40% stake while 51% interest will be held by Zhejiang Jujin Automotive Parts and 9% by Zhejiang Geely. The start of production is slated for January 2011. Its production capacity is expected to be 100,000 units per year. An investment of 200 million yen is planned for the initial fiscal year and the revenues of about 4.9 billion yen are targeted for FY2011. TACHI-S has been manufacturing automotive seats primarily for Japanese OEMs in the Chinese market. With the establishment of a new company to produce seats for the Chinese vehicle manufacturer Geely, the Company aims to further strengthen its Chinese operations. (From a press release on July 30, 2010)
>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)
Outlook for FY2011
|(in millions of JPY)|
|(in millions of JPY)|
|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 Structure-R&D activities in the area of fundamental technology to develop new products and new technologies are mainly carried out by the Company’s R&D functions located in Japan, who work in collaboration with the R&D functions in North America, Europe, and China. In addition, with the R&D Center in Japan focusing on fundamental development activities to achieve effective results, the Company actively collects information on advanced technology and peripheral technology through working together with the R&D functions in the U.S.A. and Europe, as well as with corporations both in and outside Japan, with which the Company has technical partnerships.
-The Company formed two commercial alliances, the first one with Fuji Kiko (in August 1999) and the second with Kasai Kogyo (in November 2006). These alliances are designed to improve its R&D capabilities in the areas of structural products and plastic molded parts, with the idea of jointly using each other’s R&D functions outside Japan.
-The Company set up its Tachi-S R&D Center in Ome, Tokyo that functions as its main R&D center in Japan, consolidating the R&D functions in the Kanto Region into one location. It is responsible for R&D activities aimed at responding to new product development and new technology development. The Company set up its Tachi-S R&D Center Aichi, which is located in Anjo, Aichi Prefecture.,
Developing Seats and Proprietary Structural Parts
-The Company develops the following products as seat-systems: seats for cars and other types of vehicles, recliner devices, slide rails, large-size moveable lifters, underfloor storage devices, long slide-rails for RVs (and related peripheral parts), rotary units, and other items. It is working to win customers.
Developing Enhanced Safety Technology
-As a means to enhancing occupant safety, the Company develops the following items as seat systems, which are already being installed: seats with three seatbelts, seats with side airbags, occupant sensing seats with smart airbags, and seats that mitigate neck injuries. In addition, the Company conducts R&D activities on the structural nature of safety seats in terms of their responding to front, rear, or lateral collisions.
Developing Environmentally Compliant Technology
-In the area of developing technology that complies with environmental concerns, the Company develops new materials that improve fuel efficiency and comply with the total phase-out of environmentally harmful substances; and develops ultra-lightweight seats that incorporate the latest structural technology. It is making sales presentations to customers, who are using these products.
Developing Products for Adapted Vehicles
-The Company develops special seats designed for vehicles adapted for use by the physically challenged. These seats offer excellent assistance in terms of their easy operation and their ease of letting occupants get in and out of vehicles. It is making sales presentations to customers, who are using these products.
Developing Lower-cost Products
-The Company develops low-cost, next-generation seats made possible through standardization, which are already being equipped by customers in and outside Japan.
Developing Production Technology
-The Company develops technology that improves the adhesion and molding of seats, technology that can foam mold single-unit headrests and armrests, and technology that reduces work and increases automation in the seat-assembly processes. It works on mold-making and die-making based on CAD and CAM. In addition, the Company has constructed a mixed production-line that can handle small lots of numerous product items, enabling it to respond to the increasing number of both vehicle models and product items.
-Under the aim of creating more comfortable seats, the Company is continuing its efforts at evaluating the level of “seating comfort”, doing its own research into seat structures and designs in terms of how seats should be. In addition, in order to find the perfect design in a short period of time, i.e., a design that balances performance, quality/quantity, and costs, the Company conducts CAE analysis in reducing development time and costs.
-The Company is developing designs on its own that are connected to all the sectors that the Company is engaged in such as seats. This includes working on future seat concepts and developing new product designs and corporate designs. The Company had made presentations to customers, who are currently using these products.
-The Company established Tachi-S Engineering U.S.A., Inc. in 1986 in Michigan. Needing to further strengthen it R&D capabilities, it completed its new R&D facility in June 1986. Mainly, this facility works independently to respond to new product developments by the auto makers doing business in the U.S.A., contributing to commercial production being carried out in the U.S.A. and Mexico.
-In 2004, the Company set up Tachi-S Engineering Europe S.A.R.L. in Velizy-Villacoublay, France. It is responsible for overseeing the joint-venture company, responsible as the European sales and R&D office, working to enhance the organization.
-In August 2008, the Company established Tachi-S Engineering China Co., Ltd. in Fuzhou, Fujian Province, China. It completed a new building in 2010. This facility serves as a fully operating R&D function in China, grasping the local needs, developing locally, and building the framework enabling it to make product presentations to customers in the country. It essentially is responsible for responding to minor model changes in vehicles being produced in China, working to respond to customer demands from auto manufacturers in the country.
Licensing of Technology from Other Companies
(As of Mar. 31, 2011)
|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)
for an indefinite period
(Subject to expiration with a prior notice of 6 months)
Licensing of Technology to Other Companies
(As of Mar. 31, 2011)
|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|
|(in millions of JPY)|
-The Company mainly invested to respond to model changes and to new products in connection with new program business by enhancing its production facilities.
-The Company invested a total of 1 billion, 258 million yen mainly in production facilities, in order to respond to model changes.
-The Company invested a total of 99 million yen mainly to renew production facilities.
-The Company invested a total of 2 million yen mainly in production facilities, in order to respond to model changes.
-The Company invested 12 million yen in its production facilities to respond to model changes and to new products in connection with new program business.
-The Company invested 302 million yen in its production facilities to expand its plant and respond to new products in connection with new program business.
Planned Capital Investments
(As of Mar. 31, 2011)
|Investment targets||Estimated amount of investment (million JPY)||From||To|
||Sales, procurement, designing, development, prototype production, and all technical fields including testing.||2,160||May, 2011||Mar. 2012|
|Suzuka Plant||Equipment for manufacturing automotive seats||794||July, 2011||Feb. 2012|
|Industria de Asiento
Superior, S. A. de C. V.
|Equipment for manufacturing automotive seats||628||Jan. 2011||Dec. 2011|
|Tochigi Plant||Equipment for manufacturing automotive seats||661||June, 2011||Feb. 2013|
|Aichi Plant||Equipment for manufacturing automotive seats||608||Apr. 2011||Apr. 2012|
|Equipment for manufacturing automotive seats||552||July. 2011||Mar. 2012|
|Ohme Plant||Equipment for manufacturing automotive seats||368||June, 2010||Aug. 2012|
|Tacle Guangzhou Automotive Seat Co., Ltd.
|Equipment for manufacturing automotive seats||146||Jan. 2011||Dec. 2011|