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No. 365, February 2000

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Japanese Companies in the US


TRANSPORTATION EQUIPMENT

Just 18 months after all-terrain vehicles started coming off the assembly line at HONDA OF SOUTH CAROLINA MANUFACTURING, INC. in Timmonsville, South Carolina, the company broke ground for a $20 million adjacent engine plant. At start-up this fall, the facility, which will perform engine machining, die-casting and assembly, will begin to replace ATV engines made by HONDA MOTOR CO., LTD. in Kumamoto prefecture. When the engine plant reaches capacity in 2001, HSC will be able to turn out 150,000 ATVs and engines a year. At that time, approximately 625 people will be employed by the factory, or some 200 more than now. HSC currently manufactures five ATV models. About 20 percent of its output is exported. Honda spent $50 million-plus to launch ATV output at HSC.

The runner-up to HONDA MOTOR CO., LTD. in the American ATV market also is planning to expand onshore production. YAMAHA MOTOR CO., LTD.'s subsidiary in Newnan, Georgia has its sights set on producing 63,000 ATVs in 2000. If achieved, that volume would represent a 50 percent-plus jump on 1999 output. Three of the 13 ATV models that Yamaha sells in the United States are built by YAMAHA MOTOR MANUFACTURING CORP. OF AMERICA. They include an ATV with a 250-cubic- centimeter engine and two that are powered by 400cc engines. YMMC has been in business since 1988. It got its start making golf carts and personal watercraft — products that are still made today. .....Not to be outdone, KAWASAKI HEAVY INDUSTRIES, LTD. reportedly plans to expand production of ATVs at its Lincoln, Nebraska subsidiary. The target for 2000 is a volume of 105,000 units, or about 15 percent more than last year.

Operations have started at TOCHIGI FUJI INDUSTRIAL CO., LTD.'s engine and powertrain components factory in Bowling Green, Ohio. The plant's 25 employees initially are making a pair of powertrain parts for FORD MOTOR CO., but the company is actively soliciting business from other automotive manufacturers, including, presumably, NISSAN MOTOR CO., LTD.'s Smyrna, Tennessee complex. At home, that company is Tochigi Fuji Industrial's main customer. The parts maker anticipates a rapid expansion of U.S. production, with sales jumping from roughly $2.6 million this year to $30 million in 2001. The company also hopes to improve its future chances of winning contracts by adding design and development capabilities at some point.

Having spent $28.6 million between 1997 and 1999 to expand window regulator capacity at its HI-LEX CONTROLS, INC. subsidiary in Litchfield, Michigan, NIPPON CABLE SYSTEM INC. expects a fairly quick payoff in terms of higher sales. In fact, in the near term, it projects, annual revenues will hit $200 million, double the FY 1998 total. More than half of the company's output of window regulators goes to GENERAL MOTORS CORP. (see Japan-U.S. Business Report No. 359, June 1999, p. 12). FORD MOTOR CO. and HONDA MOTOR CO., LTD.'s two plants in Ohio are Hi-Lex Controls' other customers.

What GENERAL MOTORS CORP. dubs e-vehi-cles — cars and trucks equipped with Internet access — will be developed in part with input from SONY CORP. The world's largest automotive company will use the consumer electronics giant's flash memory-based Memory Stick storage media for the PCs that will be built into these next-generation vehicles, which could be on the market as soon as a year from now. The thrust of GM's e- vehicle initiative is to link a driver's home, office and vehicle. One expected use of Sony's Memory Stick technology is to download audio and video from various sources for later use in the e-vehicle's computer.

An exchange rate of ¥105=$1.00 was used in this report.aaaaaa

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