Asia Report

Japanese domestic coil spring manufacturers manage to keep busy despite the shift to outsourcing parts.

Faced again with a rising yen, putting pressure on automakers to shift more production overseas, Japanese producers of suspension parts have managed to hold on to their domestic business.

Since the beginning of the decade, NHK Spring Co. and Chuo Spring, the nation’s top producers of springs and stabilizers, have actually seen sales and profits grow. In fiscal 2004 ending March 31, NHK is projected to report net income of $78.1 million (¥8.2 billion) on sales of $3.1 billion (¥327 billion) while Chuo, which is one-fourth the size of Yokohama-based rival, is on target to register sales and earnings of $761.9 million (¥80 billion) and $10 million (¥1.05 billion) respectively.

Overall, spring production has held steady around 42 million per year reflecting vehicle output of 10.5 million units. Within that number, the share held by coil springs has increased (currently around 90 percent of output) while the torsion and leaf spring segments have declined.

Makers attribute this decline to expanded usage of coil springs by small cars, including minis, and to a shift of pickup truck assembly to Thailand since the start of the decade the associated buildup of spring production there. NHK, for instance, currently supplies 100 percent of its Thai market requirements through its Samutpakam-based subsidiary, NHK Spring (Thailand) Co.

In 2004, Isuzu Motors produced 168,400 pickup trucks in Thailand, 2.5 times more than years before; Isuzu ceased production of pickup trucks at its Fujisawa plant in June 2003. Meanwhile, Toyota Motor and Mitsubishi Motors each produced around 117,000 units, up 50 percent and 38 percent from 2000 levels. Toyota stopped domestic production of the Hilux truck last July.

Mazda Motor produced 37,850 units last year, up from 28,400 five years earlier, while Nissan’s Thai output fell to 15,120 units, down from 32,300 in 2000. Mazda discontinued domestic production of its Proceed pickup truck in 1999. Nissan Motor still produces limited volumes of pickup trucks in Japan.

NHK supplies coil springs to a range of vehicles including the Toyota Camry and Vitz, Nissan Teana, Honda Civic and Accord, and Mazda Demio, Axela and Atenza.

The company says its share with Mazda increased with the introduction of the automaker’s new B, C and CD platforms. Based in Nagoya, Chuo Spring has a nearly 60 percent share of Toyota’s coil spring business. The company supplies such models as the Celsior, Aristo, Harrier, Land Cruiser and Prius. In addition, it supplies Daihatsu Motor’s Hijet and Move.

Meanwhile, Japanese companies produced an estimated 14 million stabilizer bars last year. NHK, with output of more than 8 million units, claimed a nearly 60 percent share. NHK was followed by Chuo Spring at 30-35 percent and Mitsubishi Steel Manufacturing Co. at 5- 10 percent. Mitsubishi Steel, the main supplier of coil and leaf springs to Mitsubishi Motors, is expected to report a $11.4 million (¥1.2 million) profit in fiscal 2004 on sales of $914 million (¥97 billion).

Against this backdrop, nearly one-fourth of stabilizer bars produced in Japan are now tubular or hollow. By 2010, suppliers estimate this share will grow from 35 to 40 percent (see table).

Japan’s two leading suppliers of shock absorbers are Kayaba Industry Co. Ltd. and Tokico Ltd., which have a combined market share of more than 65 ¥97 billion.

This article was provided exclusively to Automotive Industries by J•REPORTS, a new information service offering in-depth coverage of automotive technology based in Tokyo. For additional information about this and other studies and prices, contact JRepts@aol.com.