The ‘old guard’ in Japanese automaking tries to keep up
Nov 19 2009 , OSAKA, JAPAN
‘‘If old-guard companies like us just continue along the same beaten path, things will become difficult,’’ said the company’s chairman, Yasunobu Suzuki.
‘‘I told our engineers to try everything.’’ As Nissan and General Motors prepare to introduce battery-powered cars next year, traditional auto suppliers like NTN, which is based in Osaka, are trying to adapt by creating new lines of business.
Engine components account for as much as 40 percent of a typical car’s parts, so some suppliers are scrambling to come up with new products.
While internal-combustion engines currently power more than 99 percent of cars built globally, their share can only fall as electric cars enter the market, said Takeshi Miyao, an analyst based in Tokyo for the car consultant Carnorama.
That will intensify price competition and lower profits for manufacturers.
‘‘If you’re a parts maker that can’t expand market share, then you can’t grow without entering new businesses,’’ he said.
Tsubakimoto Chain, an Osaka-based maker of chains that link engine components, is also shut out of the market for electric cars. About 30 percent of Tsubakimoto’s ¥142 billion, or $1.6 billion, in sales last fiscal year was in auto parts, all for gasoline engines.
‘‘It’s a crisislike situation,’’ said Toru Fujiwara, head of Tsubakimoto’s autoparts division. ‘‘With electric cars, there’s no way we can apply our current technology.’’ Tsubakimoto is exploring making parts for battery-powered vehicles and talking with its customers, which include Nissan, Mr. Fujiwara said. The company plans to spend ¥3.5 billion on research in the fiscal year ending in March.
‘‘We have to come up with completely new technology,’’ he said, declining to name possible products.
NTN, which makes bearings for gasoline engines, said in September that it would raise as much as ¥23.8 billion from selling new shares and invest the proceeds in research and development and in affiliates.
About 60 percent of its sales are in auto components, the company said.
NTN spends about 3 percent of sales, expected to be ¥472 billion this fiscal year, on research, it said. The company is seeking patents on products related to electric cars.
The new market is also luring companies to the automobile business for the first time.
Daikin Industries, one of the biggest makers of air-conditioners in the world, is applying its expertise in fluorine, now used in batteries for personal computers and mobile phones, to make electric car batteries safer and longer lasting.
Daikin, based in Osaka, expects battery- related sales of fluorine to increase more than tenfold by 2017 to ¥10 billion, said Guntaro Kawamura, executive vice president.
Motor makers like Nidec Corp. of Kyoto may be the biggest winners, Mr.
Miyao said. Cars typically have about 100 motors that power windshield wipers, air-conditioners, door mirrors and other equipment.
Overflow energy from a gasolinepowered engine helps power heaters and fans, so there is a need for twice as many motors in electric vehicles, he said.
‘‘We are definitely developing motors for electric cars,’’ said Norio Tamura, a spokesman for Nidec, theworld’s biggest maker of motors for hard-disk drives.
The company’s president, Shigenobu Nagamori, is aiming for revenue to rise to ¥1 trillion by fiscal year 2012 from¥570 billion this fiscal year, with ¥350 billion coming from car-related motor sales.
The company is opening its biggest research and development facility in Shiga Prefecture, in western Japan, on Tuesday, Mr. Tamura said.
He declined to say whether the company already made parts for Nissan’s Leaf. Nissan does not disclose most suppliers for the car. Its lithium-ion battery is made by A.E.S.C., a venture of Nissan and NEC.
The chief executive of Nissan, Carlos Ghosn, said electric cars would make up at least 10 percent of global demand by 2020, assuming oil costs more than $70 a barrel.
General Motors plans to build as many as 60,000 Chevrolet Volt plug-in electric cars annually, starting in November 2010. Toyota Motor, the biggest carmaker in the world, plans to build a plug-in model for retail buyers in 2012.
This is not the first time automakers have introduced electric cars. Toyota’s previous attempt ended with just 1,900 sales of its electric RAV4 sport-utility vehicles in the United States and Japan between 1997 and 2003.
Honda Motor sold about 320 EV Plus battery-powered models on leases in the two countries between 1997 and 2000.
This time, ‘‘government emissions regulations are forcing carmakers who want to continue selling large-engine models to introduce battery-powered cars,’’ Mr. Miyao said. ‘‘We should see much bigger numbers.’’ President Barack Obama is aiming for one million plug-in cars on U.S. roads by 2015 to curb emissions and dependence on foreign oil. The prime minister of Japan, Yukio Hatoyama, has pledged to cut emissions 25 percent by 2020 from 1990 levels.
‘‘The shift to electric cars may be more dramatic than people think,’’ Mr.
Kawamura of Daikin said. ‘‘The auto industry will need to shoulder much of that cut.’’ Traditional suppliers must balance innovations with meeting their customers’ immediate demands, as improving fuel efficiency is a top priority of the industry, according to Mr. Fujiwara of Tsubakimoto.
Still, suppliers should not delay expanding to meet the potential rise in demand for electric cars, said Hisataka Nobumoto, chairman of the Japan Auto Parts Industries Association, which includes NTN. ‘‘As current technologies and businesses are reassessed, decisions on where and howto pursue new areas must be made as early as possible.
By doing so, survival may be possible.’’



















