Kasai Kogyo Co., Ltd. Business Report FY ended Mar. 2016

Financial Overview

(in million JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 Rate of
Change (%)
Sales 237,992 214,884 10.8 Sales increased due to the following factors:
-strong vehicle sales at the Company's major customers
-increased die sales as well as gains on currency translations in North America
Operating income 16,373 11,651 40.5 -
Ordinary income 16,116 11,759 37.0 -
Net income 8,543 6,572 30.0 -

Recent Development Outside Japan

-The Company has established Dongfeng Kasai (Wuhan) Roof Trim Systems Co., Ltd. to produce and sell interior parts in Wuhan City, Hubei Province. The new company will begin producing roof trims from July 2017. The annual sales target for fiscal year 2018 (ends in March 2019) will be CNY 88 million (approximately JPY 1.5 billion). This is the first time the Company will produce roof trims in China. The new company is capitalized at CNY 15 million (approximately JPY 250 million). It is a wholly-owned subsidiary of Dongfeng Kasai (Dalian) Automotive Trim Systems Co., Ltd., a 50-50 joint venture of Kasai Kogyo and the Dongfeng Motor Group parts maker Dongfeng Visteon. The new company will initially produce roof trims and supply them to Dongfeng Honda, a joint venture of Honda Motor Co., Ltd., and Dongfeng Motor Corporation. (From an article in the Nikkan Jidosha Shimbun on July 7, 2016)

-The Company is poised to increase supply to Honda Motor Co., Ltd. in the U.S. The Company plans to expand and add production equipment to its plant in Alabama in order to convert it into a dedicated plant for Honda. Honda is the Company's second largest customer behind Nissan Motor Co., Ltd. The Company 's sales have increased, as both automakers are currently boosting their production and sales volumes in the growing U.S. market. The Company intends to establish an efficient production structure in the U.S. by dedicating two plants to Nissan and two others to Honda. This will allow the Company to further improve the profitability of its North American division. (From an article in the Nikkan Jidosha Shimbun on July 10, 2015)

-The Company will expand its supply capacity in Europe for the Renault Group and Nissan Motor Co., Ltd., in cooperation with a French interior parts supplier, Eurostyle Systems. The Company decided to create a new alliance with the local supplier, as it has won orders for interior parts of Nissan cars that are scheduled to be built at Renault's Flins plant in France. The ordered interior parts include door trims for the next-generation compact car that Nissan plans to release for the European market in 2016 or later. Eurostyle Systems has a technical center and production bases in France. It also has plants in Spain and Eastern Europe. Starting with the cooperation in France, the Company will consider other joint business opportunities, including parts supply from Kasai Kogyo's plants in the areas where Eurostyle Systems does not have its own plants. (From an article in the Nikkan Jidosha Shimbun on May 27, 2015)


-The Company has received its first order from Daimler for its trunk interior parts. In 2019, the Company will begin supplying the parts for use in a new premium compact car that Daimler plans to produce in Mexico. While the first order will not make up a large proportion of its sales, the Company's view is that the first order from Daimler will be an impetus that leads to expanded future orders from the German OEM. The Company will step up the promotion of its products to Daimler in an effort to receive more orders for head lining parts, which it is focusing its efforts on, as well as its mainstay door trims. Daimler and Nissan are jointly developing a next-generation premium compact car. They will produce multiple models at a joint venture plant that is under construction in Aguascalientes, Central Mexico. The Company will produce trunk interior parts at its plant in Mexico and supply them to Daimler. The Company has received orders for various interior parts used in Nissan models under joint development. At the same time, the Company experienced difficulties promoting its products to Daimler in the present case because the companies have not had any business dealings previously, and ended up receiving only the order for trunk parts. The Company is aiming to receive orders for more items from Daimler and increase the locations it supplies its products to by showcasing the benefits of its manufacturing capabilities, like quality, productivity, and cost competitiveness, through actual supply of parts to the OEM. (From an article in the Nikkan Jidosha Shimbun on May 17, 2016)

-The Company became one of the suppliers for Land Rover brand models of Jaguar Land Rover in the U.K. The Company has received its first order from the U.K. company for soft trunk trims for one model in 2015 and for another model in 2016. The supply will start in the middle of 2015. The Company 's plants in the U.K. currently supply door trims and other car interior components to Japanese automakers' car assembly plants in the U.K. The new business with the local automaker will allow the company to strengthen its business in Europe. (From an article in the Nikkan Jidosha Shimbun on July 1, 2015)

-The Company has been awarded a contract from Toyota Motor Corporation to supply headliners and sun visors for the new Corolla that will be released in the U.S. and Mexico in 2019. The Company has served as a Tier 2 supplier to Toyota, but this is the first time that it delivers its products directly to the automaker. The Company has been chosen for its existing capacity to produce interior products in both markets. In order to cater to the new demand and hold down delivery costs for headliners, which are large and incur considerable costs to transport, the Company has decided to establish a third plant in Mexico. The new plant is likely to be constructed near Toyota's plant and Mazda Motor's plant, to where the Company already supplies its headliners. The Company plans to spend JPY 2 to 2.5 billion on this project, including investments in land, building and equipment. (From an article in the Nikkan Jidosha Shimbun on December 21, 2015)

-The Company was awarded a new contract to supply its products to Fuji Heavy Industries' new model that will be built in the U.S. The Company will produce these products, starting in 2018.

Outlook for FY ending Mar. 31, 2017

(in million JPY)
FY ending Mar. 31, 2017
FY ending Mar. 31, 2016
(Actual Results)
Rate of
Change (%)
Sales 220,000 220,000 (7.6)
Operating income 13,000 12,000 (20.6)
Ordinary income 12,700 11,800 (21.2)
Net income 6,800 6,600 (20.4)

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

-Increase sales to Renault/Nissan: The Company is aiming to receive new contracts for Renault's vehicles built in emerging markets, and is considering establishing a new supply base in Europe.

-Increase sales to companies outside the Nissan Group: Annual sales to companies other than the Nissan Group grew by 19% on an average (April 2011-March 2016). The Company is aiming to establish a more stable profit structure by enhancing its customer portfolio.

-Grow its headliner business, expecting it to become the second largest business next to the door trim business: sales at the headliner business currently account for 13% of the Company's overall sales (FY ended March 2016). The Company is considering supplying its products to Europe.

  • Mexico: Expanding capacity to meet growing demand. Already acquired land as a construction site for third plant (FY ended March 2016). Currently preparing for plant construction, aiming to begin production in the second half of 2018.
  • China: Established a new company in Wuhan to supply parts based on a new contract. The new operations are scheduled to begin in 2017.

-Kasai Tech's (subsidiary for die production) new second plant began operating in January 2016. The plant is capable of producing large dies (3,000 ton level).

-Kasai NA's new headquarters building: operations scheduled to begin in September 2016

R&D Expenditure

(in million JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 1,339 1,211 1,128

R&D Structure

-The Company's R&D activities are mainly conducted at the Advanced Product Development Division in Japan that works in collaboration with the Company's development operations overseas. All R&D costs are included in expenses for Japan.
-R&D facilities outside Japan: U.S. (Michigan, Dublin, Tennessee), Mexico, Europe, China (Guangzhou), and Thailand.
-New R&D facility at the headquarters: operations scheduled to begin in July 2017

R&D Activities

High quality
-Began mass-producing door trim products with cloth stitch designs for sports vehicles. At the 2016 JSAE Automotive Engineering Exposition, the Company exhibited door trims for the Subaru "WRX S4 SporVita" that feature first application of design stitching.

Weight reduction
-Door trims made using foam injection molding that offer high-quality surface without painting
-Nano-composite plastic products that are lightweight and resistant to scratch
-High strength and thin wall products made by press forming recycled materials
-Ultra-lightweight urethane headliner

-Injection molded resin products used on production vehicles: based on a proprietary structural design, the Company has succeeded in developing injection-molded impact-absorbing products that offer greater safety to vehicle occupants during lateral collisions. These products, which are lower in price compared to conventional products, still offer a high level of performance.
-More advanced technology for injection molded resin products: analysis of side collision using CAE tools to accelerate application development and increase cost efficiency.

Cabin-interior comfort
-Insulating headliner: started mass production of this headliner that contributes to reducing energy consumption of air conditioners.
-Kasai Press Mold (KPM): olefin thermoplastic elastomer (TPO), PP foam, and PP substrate foaming are molded simultaneously, eliminating the need to use any adhesives.
-Hi-papia (Recycle PP & PET): made from 100% recycled materials
-Plant-based resins (polylactic acid) as alternatives for plastics
-Materials recycling with use of recycled plastics and other recycling methods
-Zero organic solvents: shifting to water-soluble adhesives and hot-melting processes
-Paint-less technology: eliminated painting process by mixing coloring agents directly into plastics instead of relying on paint, and by using high-brightness metallic-colored resin injection molding technology

Product appeal
-Interior illumination: Practical application of optical simulation technology in digital development
-Interior User Interface (IUI) concept: designed to serve as an interface between the vehicle and passengers, and targeted at next-generation vehicle, including autonomous vehicles.

Capital Expenditure

(in million JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Japan 5,513 3,981 3,440
North America 4,059 5,801 6,052
Europe 839 375 1,027
Asia 2,352 4,277 2,773
Total 12,765 14,435 13,294

-In FY ended March 2016, the Company invested mainly in new facilities to deal with model changes. In Japan, investment focus was set on the construction of Kasai Tech's second plant.

-Planned amount of investment for FY March 2017 is JPY 16,710 million. It will be used mainly for installing and revamping major new facilities.

Planned Capital Investment

(As of Mar. 31, 2016)
Company name
Site name
Type of facility Planned investment
(in million JPY)
Start Planned completion
Headquarters Plant
(Kanagawa Pref., Japan)
Office building, facilities to assemble automotive interior parts, dies, tools, and other items 4,577 Apr.
Mie Kasai Co., Ltd.
(Mie Pref., Japan)
Facilities to assemble automotive interior parts, tools and other items 78 Apr.
Gunma Kasai Co., Ltd.
(Gunma Pref., Japan)
Facilities to assemble automotive interior parts, tools and other items 856 Apr.
Kyushu Kasai Co., Ltd.
(Oita Pref., Japan)
Facilities to assemble automotive interior parts, tools and other items 313 Apr.
Kasai-TEC Co., Ltd.
(Shizuoka Pref., Japan)
Dies to make automotive interior parts 28 Apr.
M-TEK Inc. Office building, Facilities to assemble automotive interior parts, tools and other items 5,760 Apr.
Kasai Mexicana S.A. de C. V. Facilities to assemble automotive interior parts, tools and other items 2,141 Apr.
R-TEK Ltd. Facilities to assemble automotive interior parts, tools and other items 598 Apr.
Guangzhou Kasai Automotive Interior Trim Parts Co., Ltd. Facilities to assemble automotive interior parts, tools and other items 846 Apr.
Kasai Teck See Co., Ltd. Facilities to assemble automotive interior parts, tools and other items 479 Apr.
PT. Kasai Teck See Indonesia Facilities to assemble automotive interior parts, tools and other items 375 Apr.
Kasai India (Chennai) Private Ltd. Facilities to assemble automotive interior parts, tools and other items 126 Apr.

Business Plan

-The Company mapped out a new long-term management plan, KR10 (Kasai Realize 10), which covers the period between 2014 and 2023. Plans are to offer excellent quality to global customers by standardizing manufacturing methods and processes, to create its "only one" technology and develop it into a "number one" technology, and to generate new business targeted at the automotive industry. Following are financial targets for the final year of the plan:

  • Sales: JPY 300 billion
  • Operating profit margin: 8%
  • Global market share (interior trim): 10%

-The Company will lower the sales ratio to Nissan Motor in its consolidated net sales to below 60% by the fiscal year ending March 2020 (FY2019). While continuing business with Nissan, the Company intends to win more orders from other Japanese automakers including Honda and foreign OEMs with the aim of lowering dependency on Nissan. In its long-term vision to fiscal 2023, the Company has set a goal to expand its net sales up by 67% from FY2013 to JPY 300 billion. The Company is eyeing growth of business scale while maintaining stability by expanding its customer base. To attain its long-term vision, the Company will bolster sales of door trims, its major product, headliners, sun visors and resin parts, while at the same time increasing the number of customers. Sales to Honda, the second largest customer after Nissan, will be increased to 25% in FY2019 from current 20% and sales to other carmakers in and outside Japan will also be expanded. (From an article in the Nikkan Jidosha Shimbun on November 29, 2014)