Yorozu Corp. Business Report FY ended Mar. 2018
Financial Overview |
(in millions of JPY) |
FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | Rate of change (%) | Factors | |
Sales | 171,536 | 167,723 | 2.3 | -Rose year over year because the increased sales of new products for new model vehicles in Japan, increased sales of dies and equipment, and increased production volumes in China offset the decreases in production volumes in the USA, Mexico, Thailand, and Indonesia. |
Operating Profit | 6,029 | 6,327 | (4.7) | -Profit fell because of initial expenses incurred to start production at the new plant in Alabama, higher depreciation costs in Mexico, and the worsening profitability in Brazil and Indonesia, despite the benefits that resulted from profit-improvement initiatives at the plant in Tennessee in the USA. |
Ordinary profit | 5,648 | 6,265 | (9.9) | |
Net income attributable to owners of the parent | 2,717 | 3,980 | (31.7) | -Profit fell because of the consequence of the tax effect in line with the decision to lower corporate tax rates in the USA. |
New Mid-term Management Plan: Yorozu Spiral-up Plan 2020
-The Company in May 2018 announced it had established its new mid-term management plan that covers the fiscal year ending in March 2019 to the fiscal year ending in March 2021 as the second phase of Yorozu Spiral-up Plan 2017.
-The Company aims to achieve sales of JPY 180 billion and a consolidated operating profit margin of 5%.
1) Strengthen profitability
- Recover capital investments spent at its production plants, namely Yorozu Automotive Alabama (YAA) and at the production plant in Mexico, working to enhance the evaluation of investment profitability and cash-flow management.
- Strengthen the administration of management as well as the management of project profitability centered on function and line of business.
- Make use of the new “product-creation technology” being used at YAA, at other production plants. This includes fully automated, unmanned assembly lines and self-driving transport vehicles.
- Reduce production costs of new vehicles and capital investments by synchronizing activities, included those from the first stages of development, at Yorozu Global Technology Center (YGTC) that is the function responsible for creating products, and at Yorozu Engineering (YE) that is the production company responsible production equipment and dies.
2) Improve product appeal and development capabilities
- To create ultra-lightweight products, develop technology that makes use of ultra-high-tensile steel plates, plastic materials, carbon-fiber plastics, and aluminum alloys.
- To enhance capabilities within the entire Yorozu Group, expand and improve the capabilities of Yorozu Engineering (Japan) and Yorozu Engineering Systems Thailand.
- To expand sales of products that were developed based on customer needs, focus on under three core concepts: customers, products, and regions.
3) Boost Corporate Strength
- Focus on three core areas: human-resources development, organizational revision, and ESG-based management.
Major Contracts
-Major contracts concluded in FY ended March 2018
Customer | Location | Model | Components |
Nissan | Japan | "Leaf" | Rear axle beam |
Mexico | "QX50" | Front members, rear members, rear suspension links | |
China | "Navara" | Front upper links, Front lower links | |
Renault | Brazil | "Kwid" | Front members, Rear axle beam, transverse links |
"Duster" | Rear axle beam | ||
Honda | Japan | "N-BOX" | Rear axle beam, Front Arm |
U.S. | "Odessey" | Rear sub-frames, Arm |
Awards
-Major awards received in FY ended Mar. 2018
Awarding Company | Facility Awarded | Name of Award |
Toyota Motors East Japan | Yorozu Home Office | Quality Award |
North American Nissan | YMEX | Regional Quality Award |
Dongfeng Nissan | G-YBM | Regional Quality Award |
Nissan Shatai | Yorozu Home Office | Contribution to Development Award |
Honda Brazil | YAB | Excellence in New-Vehicle Development Award |
Isuzu | Yorozu Home Office | Quality Contribution Award |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
Overall | 9,435 | 8,677 | 6,163 |
R&D Facilities
-Under the Company’s mid-term management plan, the Company is working on developing new products at the Yorozu Global Technical Center (YGTC) in Oyama City, Tochigi Prefecture, as a means to further strengthen its product appeal and development capabilities.
Product Development
Developed lightweight suspension
-Reduced the weight of the rear-suspension for the Honda N-Box by reducing the plate thickness, changing from a 440MPa material to a 590M material based on using a plasma-tailored method.
Developed lightweight suspension link
-Reduced the weight of the suspension-link delivered to Renault. The previously used suspension-link, which consisted of three parts welded together, weighed 1.65kg. The weight of this latest link was reduced to 1.4kg based on integrating the former three parts to only a single part. Preparations are being made to commercially produce this suspension-link which has already been developed.
Technology Licensing Agreements |
(As of Mar. 31, 2018) |
Licensee | Country | Products | Contract period |
Auto Chassis International S.N.C. (ACI) | France | Suspension parts | The contract became effective on May 1, 2005 and shall remain in effect until the production of the relevant passenger car is ceased. |
DK Austech Co., Ltd | Korea | Suspension parts | The contract became effective on Dec. 1, 2012 and shall remain in effect until the production of the relevant components is ceased. |
JBM Auto Limited (JBM) | India | Suspension parts | The contract became effective on Sep. 1, 2012 and shall remain in effect for seven years. |
JBM Auto Limited (JBM) | India | Suspension parts | The contract became effective on Jul. 22, 2013 and shall remain in effect for seven years. |
JBM Auto Limited (JBM) | India | Suspension parts | The contract became effective on Apr. 2, 2014 and shall remain in effect for seven years. |
Jay Bharat Maruti Ltd. (JBML) | India | Suspension parts | The contract became effective on Sep. 1, 2015 and shall remain in effect for seven years. |
DK Austech Co., Ltd | Korea | Suspension parts | The contract became effective on Jan. 1, 2016 and shall remain in effect until the production of the relevant components is ceased. |
JBM Auto Limited (JBM) | India | Suspension parts | The contract became effective on Apr. 1, 2016 and shall remain in effect for seven years. |
Capital Investment |
(in millions of JPY) |
FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
Overall | 20,013 | 24,643 | 15,500 |
Capital investment in the FY ended March 2018
- Japan (JPY 4,939 million) for responding to new vehicle models, expanding YE, and enhancing facilities and equipment for dies.
- Americas (JPY 8,138 million) for responding to new vehicle models, investing in a new production plant at YAA, and augmenting production facilities at YMEX.
- Asia (JPY 6,936 million) for responding to new vehicle models and augmenting production facilities at W-YBM.
-JPY 20,100 million are planned to be spent in the fiscal year ending in March 2019.
Investments Outside Japan
-The Company announced that it marked the grand opening of its USD 110 million manufacturing plant in Jasper, Alabama. Yorozu produces stamped metal suspension components for automakers including Honda, Toyota and Nissan. The new facility is expected to have 300 employees by 2020, when full production capacity is achieved. The city of Jasper is continuing preparation of other potential manufacturing sites for suppliers to the nearby USD 1.6 billion Mazda Toyota Manufacturing USA assembly plant being built in Huntsville, Alabama. (Alabama Department of Commerce release on March 28, 2018)
ーThe Company will start the full-scale introduction of automated lines at its plant in the U.S. in August. The company will install automated guided vehicles (AGVs) and robots in parts feeding and painting processes at the plant to reduce manpower and improve production efficiency. In the U.S., labor costs are rising and the economy is robust. As a result, it is difficult to secure workers. Yorozu will actively introduce automated facilities in an effort to automate roughly 50% of all the processes at its U.S. plants in the future. Yorozu Automotive Alabama, Inc., a U.S. manufacturing subsidiary of Yorozu, started production of stamped parts in 2017, more than one year ahead of schedule. Yorozu will actively install the latest automated facilities at the plant. (From an article in the Nikkan Jidosha Shimbun on February 9, 2018)
Planned Capital Investment |
(As of Mar. 31, 2018) |
The Company and its subsidiaries | Details | Planned investment amount (in millions of JPY) |
Start of investment | Planned completion |
Lend-lease contract (Yorozu Tochigi Corp.) | Facilities for new vehicle models | 188 | Feb. 2018 | Nov. 2018 |
Lend-lease contract (Yorozu Oita Corp.) | Facilities for new vehicle models | 822 | Aug. 2016 | Jan. 2019 |
Lend-lease contract (Syonai Yorozu Corp., YOROZU engineering Corp.) | Facilities for new vehicle models | 145 | May. 2018 | Jan. 2020 |
Yorozu Oita Corporation | Plant buildings | 1,370 | Jun. 2017 | Sep. 2018 |
Stamping machines and other production equipment | 1,596 | Jun. 2017 | Sep. 2018 | |
Yorozu Automotive Tennessee, Inc. | Facilities for new vehicle models | 1,117 | May. 2018 | Aug. 2018 |
Yorozu Automotive Alabama, Inc. | Facilities for new vehicle models | 2,553 | Aug. 2017 | Feb. 2020 |
Yorozu Mexicana S.A. de C.V. | Augmenting existing production facilities | 174 | Dec. 2018 | Feb. 2020 |
Facilities for new vehicle models | 949 | Sep. 2018 | Apr. 2019 | |
Yorozu Automotive do Brasil Ltda. | Facilities for new vehicle models | 568 | Sep. 2017 | Aug. 2018 |
Yorozu (Thailand) Co.,Ltd. | Facilities for new vehicle models | 282 | Jan. 2018 | Dec. 2018 |
Yorozu Bao Mit Automotive Co.,Ltd. | Facilities for new vehicle models | 2,229 | May. 2017 | Dec. 2018 |
Wuhan Yorozu Bao Mit Automotive Co., Ltd. | Stamping foundations | 278 | May. 2016 | Oct. 2018 |
Facilities for new vehicle models | 4,242 | Dec. 2016 | Dec. 2018 | |
Yorozu JBM Automotive Tamil Nadu Pvt Ltd. | Facilities for new vehicle models | 244 | Apr. 2018 | Jan. 2019 |