Supply Agreements

-The Company supplies center cylinders for AHCS (Active Height Control Suspension) systems being equipped on the Toyota Landcruiser.

-The Company supplies newly designed electric power steering systems being equipped on Fuji Heavy Industries' Legacy.

-The Company supplies electric motor-driven actuators used in rear-wheel steering systems being equipped on the Nissan Infiniti FX.

>>> See R&D for more details

Recent developments outside Japan

-USA

The Company reduced the amount of money it will invest to increase its production capacity at KYB Manufacturing North America, Inc. by 500 million yen. Initially, the investment was to be made during FY2007, which ended in March 2008, but was cut back because the company stopped receiving increases in orders from major Japanese automakers and the Big Three of North America. KYB Manufacturing North America, Inc. manufactures shock absorbers. 

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-Europe

The Company will reorganize shock absorber production operations in Europe. While its high-value added shock absorbers, for both OEM and the aftermarket, will be consolidated to its plant in Spain, whose labor cost is sharply rising, its Czech plant, of the lower labor cost, will exclusively manufacture mass production models. Focusing on logistics efficiency and other factors, each plant's operation has been high-mix low-volume, which has resulted in low productivity. The Company will, therefore, seek for volume efficiency by sorting out low-priced models from high-value added ones. KYB Suspensions Europe, S,A. Navarra, Spain (KYBSE) and KYB Manufacturing Czech, s.r.o., Pardubice, Czech Republic (SYBCZ) are the two target plants in Europe. KYBSE mainly supplies shock absorbers to Nissan and Renault as well as to the aftermarket in Europe, including quite a few mass production models. Over 90 percent of KYBCZ's output is for OEM for Toyota, Renault and Magyar Suzuki Corporation. (From an article in the Nikkan Jidosha Shimbun on Nov. 20, 2007)

Business plan

-Business objective for FY2010, which ends March 2011

Consolidated return on equity (ROE): 11% or more
Consolidated operating income margin: 6% or more
Consolidated net sales: 440 billion yen or more

-Facilities outside Japan

In 2004 the Company established a technical center in Thailand, which is positioned as its development center.

R&D Expense

R&D activities (FY2007)

Hydraulic snubbers

-The Company developed (and currently is supplying) center cylinders for AHCS (Active Height Control Suspension) systems being equipped on the Toyota Landcruiser. These cylinders reduce fluctuations in the level of ground contact load and of rolling and pitching of the body, by connecting the front and rear shock absorbers together with  X-shaped piping. This then improves the vehicle ride, because these suspension systems can absorb the torsion generated when the vehicle is being driven. These air suspension systems also improve steering and vehicle maneuverability. In addition, they require less space  to be installed. 

-In the area of product technology, the Company moved the vane pump production line that was operating at its Gifu-kita Plant to KYB Kanayama Co., Ltd., making the latter a plant dedicated to vane pumps by integrating all vane pump operations there. The Company also constructed an additional production line for strut shock absorbers at KYB Manufacturing North America, Inc.

-In the area of production engineering, the Company is working on fundamental technology that can be used  to develop a Green Technological Damper which uses non-mineral biodegradable oil, glycol solution, and inactive gas. 

Hydraulic equipment

-The Company developed (and currently is supplying) newly designed electric power steering systems that drive pinions by using powerful brushless motors on horizontally-opposed engines mounted on small and mid size vehicles such as Fuji Heavy Industries' Legacy.

-The Company developed (and currently is supplying) electric motor driven actuators used in vehicles with rear wheel steering. The weight of these actuators (which are being installed on the Nissan Infiniti FX) were reduced from 7kg to 4kg.

-In the area of production engineering, the Company succeeded in manufacturing reduction gears in-house. These gears are important components in the electric power steering systems mentioned above and make it possible to fine tune steering performance. The Company was able to make a smooth commercial production launch of these gears. 

Other equipment

-In the area of electronic devices, the Company developed a new DRE-120 which adds functions compatible with EMSs (Ecodrive Management Systems) supported by the Ministry of Land, Infrastructure, Transport and Tourism to promote ecological driving. This DRE-120 is used in drive recorders, which are devices that graphically record conditions before and after accidents occur and help in analyzing the causes of accidents, and thus lead to safer driving.

Fundamental technology

-The Company conducted joint-research activities with Tokyo University and Toyota Motor Corporation on the control of four-wheel suspension systems by using electromagnetic power and taking into consideration a balance of energy.

Automobile-related licensing agreements (as of Mar. 31, 2008)

In FY2007 (which ended in March 2008) in its hydraulic products business, the Company mainly invested in KYB Suspensions Europe, S.A. in Spain; KYB Manufacturing Czech s.r.o. in the Czech Republic; and KYB Manufacturing North America, Inc. in the U.S.A.

The Company, which is working on an expansion project at KYB Manufacturing North America Inc., will scale down its original plan by reducing the amount it will spend in this project by 500 million yen. Based on its revised plan, it will construct four new lines including parts production lines and the final assembly line, instead of adding eight as originally planned. As demand from both the Big 3 and major Japanese automakers, the Company's largest customers, showing signs of leveling off in the slowing economy due to surging oil prices and the subprime loan crisis, the company decided to scale down its project. KYB Manufacturing North America Inc. manufactures shock absorbers in Indiana, U.S.A. The subsidiary was ready to invest 3.1 billion yen to set up an additional building and production lines by the end of this fiscal year. The new building, worth 2.2 billion yen, has already been completed, but the company will reduce by half the number of production and assembly lines it will build there by March 2008. Further construction work will be confined to three production lines and an assembly line, costing 400 million yen. When these lines are fully operated, the U.S. plant, which is capable of producing 6.6 million shock absorbers per year today, will increase its capacity by 33 percent to 8.8 million. The Group initially intended to double the annual capacity to 9.8 million. (From an article in the Nikkan Jidosha Shimbun on Nov. 27, 2007)

Capital investment plan (FY2008)

The total capital investment in establishing new facilities and renovating existing facilities planned for fiscal year 2008, which ends March 2009, is 25 billion JPY, out of which 24.3  billion JPY is planned to be invested in the hydraulic products business.