TACHI-S Co., Ltd. Business Report FY ended Mar. 2019
Financial Overview |
(in millions of JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | Rate of Change (%) | Factors | |
| Sales | 300,530 | 295,470 | 1.7 | -Sales were impacted by the various sales situations in regions around the world, and by negative currency translation. |
| Operating income | 5,411 | 8,663 | (37.5) | - |
| Ordinary income | 7,049 | 11,934 | (40.9) | - |
| Net income | 1,951 | 8,174 | (76.1) | - |
Factors by Region
-Japan: Sales were strong, increasing 5.9% year-over-year (y/y). However, operating profit (JPY 968 million) fell 24.8% y/y because of changes made to the Company's product lineup.
-North America: Sales decreased 2.9% y/y because of the shrinking sedan market. An operating loss of JPY 370 million yen was recorded because of changes made to the product lineup.
-Central/South America: Sales decreased 7.6% y/y due to production stoppages at some OEMs because of flooding. In addition to lower sales, changes to the Company's product lineup and negative currency translation created an operating loss of JPY 1,364 million.
-Europe: Sales increased 44.2% y/y. Operating profit was JPY 32 million, thanks to effective initiatives to improve profitability.
-China: Sales were strong, increasing 3.8% y/y. Operating profit increased 2.2% y/y to JPY 6,160 million.
-Southeast Asia: Sales increased 24.7% y/y. Operating profit was JPY 169 million.
Mid-term Management Plan: Global Teamwork 2020
-Objectives are listed below.
- Number 1 Quality
- Operating margin: 7%
- Global manufacturing share: 7%
-In the 2018 fiscal year that ended in March 2019, the Company's worldwide market share was 5.2%.
＜Enhancing competitive advantages in manufacturing frames＞
-JTEKT Corporation and Tachi-S agreed for Fuji Kiko’s seat business to be transferred to Tachi-S. This resulted in setting up a subsidiary company TF-Metal. They also agreed that Tachi-S would apply for a tender offer being conducted by JTEKT in order to complete turning Fuji Kiko into a subsidiary. The objective is for JTEKT to strengthen its steering-systems business and for Tachi-S to strengthen its seat business. In 2020, laser welding will be used to improve mechanical parts and further reduce costs. The Company plans to develop the next-generation TTK-X front frame by 2022.
Recent Business Developments
＜Central/South America＞
-The Company received orders from a new customer in Central/South America to produce seats and sew trim-covers.
＜USA＞
-TACHI-S Engineering U.S.A. won business to develop, design, and test a prototype seat for electric vehicles, from a new customer.
Installed collision testing-equipment in Mexico and China
-The Company is speeding up product development to match market needs. By 2018 the Company had installed collision testing-equipment in three global regions, Japan, Mexico, and China, to develop and test automotive seats. Based on this, the Company is making efforts to timely respond to OEMs' needs outside Japan such as in China and other countries, where they have further localized their own development and production functions. The Company is hoping this will lead to winning new orders and increasing the types of models on which it delivers products. It set up the testing equipment in Mexico in 2017 and in China in 2018, creating a global testing framework. Originally, collision-testing of seats that were developed outside Japan was done either in Japan or by external organizations. Naturally, the Company is timely responding to the needs and demands from OEMs in major markets not only in Japan, of course, but also the world's two largest markets, the USA and China, hoping that this will reduce development lead-time and costs involved with development activities such as transportation costs. (From an article in the February 19, 2019 Nikkan Jidosha Shimbun)
Product Orders
| Region | OEM | Model |
| Japan | Honda | Vezel、N-VAN、Jade |
| Toyota | RAV4 | |
| Nissan | Fairlady Z、Skyline | |
| USA | Honda | MDX、ACCORD、ACCORD FHEV |
| Nissan |
Leaf、Maxima、Murano |
|
| Mexico | Honda | HR-V |
| Nissan | KICKS(USA)、KICKS(MEXICO)、Versa、March | |
| China | Honda | Vezel |
| Nissan | TERRA、X-Trail、Ruiqi6、Sylphy EV、Venucia T60、Qashqai | |
| Geely | Emgrand PHEV、New Emgrand、Emgrand EV | |
| Chery |
Karry KX63 | |
| ASEAN | Nissan | Terra |
-Seat for the Zhengzhou Nissan Ruiqi 6
Production Plant: Zhengzhou Taixin Interia Co., Ltd.
- Equipped with the region's lowest priced frame containing locally procured mechanical components for the standard front-seat frame (TTK)
- Reproduced the design of the Nissan Navara, achieving the same level of sitting comfort as the original.
-Dongfeng Nissan: Seat for the X-TRAIL
Production Plant: Tachi-S Lear DFM Automotive Seating (Xiangyang) Co. Ltd.
- Delivered the rear back-frame that is based as much as possible on the frame mechanism on the standardized Nissan rear seats.
- Large-size arm rest, three-person headrest, and rear seat that fully incorporates the ISOFIX anchor.
Awards
<Awarded the Top Appreciation Award, Development Award, from Honda＞
-Seat for the Honda N-VAN (driver and passenger seats)
＜Awarded the IAUD International Design Award, 2018 Gold Medal>
-Jointly developed with Clarion: InfoSeat
＜Awarded the 2018 J.D. Power 2018 U.S. Seat Quality and Satisfaction Study Award＞
・Mass-market compact SUV and MPV segment: No. 1 among 27 models
Mitsubishi Outlander Sport (RVR in Japan) (Aichi Plant in Japan)
・Mass-market mid-sized and full-sized segment: No. 1 among 20 models
Honda CLARITY（Musashi Plant, Japan)
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
| Overall | 4,583 | 4,647 | 4,130 |
R&D Facilities
| Tachi-S Technical Monozukuri Center | Ome City, Tokyo |
| Advanced Technology Center | Ome City, Tokyo |
| Tachi-S Technical Center Aichi | Anjo City, Aichi Pref. |
| Tachi-S Engineering U.S.A. Inc. | Michigan, USA |
| TF-METAL Americas Corporation | Michigan, USA |
| Tachi-S Engineering Latin America S.A. de C.V. | Aguascalientes, Mexico |
| Tachi-S Engineering Europe S.A.R.L. | Velizy-Villacoublay, France |
| Tachi-S Engineering China Co., Ltd. | Fuzhou, China |
| TACHI-S Engineering Zhengzhou Co., Ltd. | Henan, China |
| Tachi-S Engineering Vietnam Co., Ltd. | Ho Chi Minh, Vietnam |
R&D Structure
-The Technology and Product-Development Center in Japan conducts fundamental R&D activities, developing new products and new technologies. In addition, business operations in the USA and Europe, along with companies both in and outside Japan partnering in technological innovations, are engaged in gathering information on advanced technologies and peripheral technologies.
R&D Activities
Development of seats and proprietary mechanical parts
-The Company is creating developments in the seat-system segment, which includes automotive seats, reclining devices, slide-rails, lifters, power-seat devices, seat-positioning devices, long slide-rails, and their peripheral mechanisms, making proposals and delivering them to OEMs.
Development of technology to improve safety
-The Company is developing the following as seat systems to improve safety: seats equipped with side-airbags, seats compatible with smart airbags with occupant detection feature, and systems to reduce neck injuries, delivering them to OEMs. Also, the Company is conducting R&D activities on seat safety so as to enable seats to respond to frontal, rear, and lateral collisions.
Development of environmentally friendly technology
-The Company is developing materials that will totally eliminate environmentally harmful impact and substances while improving fuel efficiency; and ultra lightweight seats loaded with new technological mechanisms. The Company is making product presentations to OEMs.
Development of products for special needs vehicles for social work
-The Company is developing seats for physically challenged occupants in terms of making them super easy to operate and get in and out of; for special needs vehicles. The Company is making product presentations to OEMs.
Development of low-cost products
-The Company is developing low-cost, next-generation seats based on standardizing and using common parts, making presentations to OEMs both in and outside Japan.
Development of production technology
-The Company is developing technology to improve adhesion-molded seats, technology to foam-mold single-unit headrests and arm rests, technology to automate and reduce energy and labor involved with assembling seats, and technology to manufacture and form-mold based on CAD and CAM; working to increase the models its delivers products to and its product lineup.
Research on seats
-Under the aim of developing seats that are even more comfortable, the Company evaluates "seating comfort" and conducts its own research on what seat architecture and design should be, studying seat mechanisms. In addition, the Company is using CAE in order to shorten development time and reduce costs so as to design seats in less amount of time, which are balanced in terms of performance, quality, and cost.
Development of seat designs
-The Company is working independently to develop designs for various fields in which the Company is engaged, such as future seat concepts, new-product designs, and corporate designs. The Company is making product presentations to OEMs as well as delivering them.
Standard frame
-TACHI-S is developing, along with proposing and delivering to OEMs, proprietary standardized seats that are designed for general use and which are lighter weight and lower in cost, enabling them to be used as standardized seats compatible with all types of vehicle models.
Capital Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
| Overall | 5,268 | 4,644 | 5,064 |
-Contents of the investment by region for FY ended Mar. 2019 are as follows:
| Region | Major items | Investment amount (in millions of JPY) |
| Japan | -Preparing production equipment to deal with new orders and model changes. -Change of IT system |
2,594 |
| North America | -Preparing production equipment to deal with model changes. | 392 |
| Central and South America | -Investment in new plant as well as production equipment to deal with new orders and model changes. | 1,815 |
| Europe | -Preparing production equipment to deal with new orders. | 10 |
| China | -Preparing production equipment to deal with new orders. | 284 |
| Southeast Asia | -Renewal production equipment | 172 |
-TACHI-S Engineering Zhengzhou Co., Ltd., a local corporate entity in China, installed collision testing-equipment. The Company announced that it held an opening ceremony in Zhengzhou, Henan Province to commemorate the commissioning of the new equipment. This is the third location in the Group conducting collision testing, following Japan and Mexico. By having three testing locations, the Company has developed a global and on-demand R&D structure that responds to customer needs in a timely manner. (From a Company press release on July 13, 2018)
Planned Capital Investment |
(As of Mar. 31, 2019) |
| Company/plant | Facilities & Activities | Total investment (millions of JPY) |
Start date | Completion |
| Aichi Plant | Equipment for manufacturing automotive seats | 2,014 | Apr. 2019 | Mar. 2020 |
| Hiratsuka Plant | Equipment for manufacturing automotive seats | 1,067 | Apr. 2019 | Mar. 2020 |
| Tochigi Plant | Equipment for manufacturing automotive seats | 547 | Apr. 2019 | Mar. 2020 |
| TF-METAL Co., Ltd. | Equipment for manufacturing automotive seats components | 1,472 | Apr. 2019 | Mar. 2020 |
| Industria de Asiento Superior S.A. de C.V. | Equipment for manufacturing automotive seats | 1,530 | Apr. 2019 | Mar. 2020 |
Investment outside Japan
＜Mexico＞
Tachi-S announced it will invest USD 4 million to start up a new production facility on March 1 in Aguascalientes, Mexico and hire 600 employees. The new recruits will add to the workforce of 4,760 that make Tachi-S on of the largest employers in the state of Aguascalientes with six production facilities located in Zacatecas, Saltillo, Cuernavaca, Guadalajara, and now the city of Aguascalientes. Company officials cited by the media said that the plant will feature an output capacity of 356,000 seat covers per year, of which 230,000 will be delivered to Toyota for its next Corolla program while the remaining 126,000 will be for the new Mazda 3 whose production will begin in the near future at the automaker’s assembly plant in Salamanca. Other customers Tachi-S include Nissan, Infiniti and Honda. (From Mexico-Now article on February 11, 2019)
＜China＞
Tachi-S Co., Ltd. (Tachi-S) announced that its Chinese subsidiary, Tachi-S China Co., Ltd., has acquired a 51% stake in Hunan Changfeng Namba Automotive Components Co., Ltd., an automotive seat maker and a fully-owned subsidiary of Hunan Changfeng Automobile Sofa Co., Ltd, to make the company its subsidiary. The new subsidiary has at the same time changed its name to Hunan Tachi-S Automotive Seating Co., Ltd. Tachi-S has not disclosed the acquisition value. Through the acquisition of the new subsidiary, whose main customer is GAC Mitsubishi Motors Co., Ltd., a joint venture between Mitsubishi Motors Corporation, Mitsubishi Corporation, and Guangzhou Automotive Group, Tachi-S aims to strengthen its Mitsubishi business in the Chinese market. The new subsidiary, which was originally established in July 2012, has an annual production capacity of 300,000 automotive seats. It has sales of about CNY 500 million (JPY 8 billion) in the fiscal year that ended in March 2019. Hunan Changfeng Automobile SOFA will continue to hold a 49% share in the new company. (From an article in the Nikkan Jidosha Shimbun on April 22, 2019)