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No. 360, September 1999

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Japanese Companies in the US


TRANSPORTATION EQUIPMENT

NISSAN MOTOR CO., LTD. could be the first automotive manufacturer to meet the California Air Resources Board's stringent super low emission vehicle standards for gasoline-powered vehicles. Its candidate is a 1.8-liter version of the 2000-model-year Sentra compact sedan. Nissan expects the SULEV Sentra to emit about one-fourth of the unburned hydrocarbons and one-tenth of the nitrogen oxides of the cleanest gasoline-powered car now sold in California. Moreover, the vehicle's fuel system will emit no raw hydrocarbon gasoline vapors, a first. Production of the SULEV Sentra will begin in February 2000.

Commercial production of 3.0-liter V6 engines has begun at TOYOTA MOTOR MANUFACTURING WEST VIRGINIA, INC. in Buffalo. They will go into the redesigned Avalon sedans built by TOYOTA MOTOR MANUFACTURING KENTUCKY, INC. in Georgetown. Late last year, TMMWV launched production of four-cylinder engines for North American-assembled Corollas. At full capacity, the factory will be able to produce 300,000 four-cylinder engines and 200,000 V6 engines a year. The beginning of official V6 output coincided with the start of construction of TMMWV's automatic transmission plant (see Japan-U.S. Business Report No. 349, October 1998, p. 9). Production of these parts, destined for Kentucky-built Camrys, is scheduled for early 2001 at an eventual rate of 360,000 units a year. When Toyota West Virginia is fully operational, it will employ 800 people and represent an investment on the order of $900 million.

The 20-year-plus technical tie-up between MEIJI RUBBER & CHEMICAL CO., LTD. and Germany's FREUDENBERG & CO. on automotive brake hose has led to a joint venture in the United States. An on-the-move FREUDENBERG-NOK, a Plymouth, Michigan-headquartered supplier of automotive sealing products that recently announced its intention to move into the North American brake hose market, has joined with MMU AUTO COMPONENTS, INC. of Normal, Illinois to form FLEXITECH, INC. Freudenberg-NOK owns 51 percent of that company. Meiji Rubber and MITSUBISHI CORP., which formed automotive hose maker MMU in 1989 on a 60 percent/40 percent basis, have shares of 29.4 percent and 19.6 percent, respectively, in Flexitech. The joint venture imports hose from Japan and France and turns it into brake hose assemblies as well as power steering, vacuum, oil cooler and automatic transmission hose assemblies at Flexitech's Normal factory. Customers include three Japanese vehicle transplants. Freudenberg-NOK, in which seal supplier NOK CORP. is a minority partner, provided Flexitech's engineering, sales and marketing resources.

With output increasing at HONDA MOTOR CO., LTD.'s North American operations, more of the company's parts suppliers are announcing expansion plans. For instance, F.C.C. CO., LTD. has earmarked $10.6 million so that its JAYTEC, INC. subsidiary can turn out 20 percent more segmented clutch friction disks for automatic transmissions. When the new capacity comes on stream in May 2000, the Portland, Indiana factory will be able to produce 1.2 million of these parts monthly for HONDA TRANSMISSION MANUFACTURING OF AMERICA, INC. in Marysville, Ohio. This investment was disclosed just as Jaytec was getting ready to raise output of automatic transmission clutches for Honda Transmission (see Japan-U.S. Business Report No. 354, March 1999, p. 11).

Japanese automotive parts makers might have set up shop in the United States to supply their traditional customers, but a number of them are finding new business opportunities in Detroit. For starters, the now all-Japanese client list for SW MANUFACTURING, INC.'s window regulators, seat adjusters/recliners and hinges soon will indirectly include FORD MOTOR CO. The Smithville, Tennessee subsidiary of SHIROKI CORP. has a contract to supply hinges to LEAR CORP., which will design, engineer and manufacture the fold-down rear seat for the 2001-model-year F-150 SuperCrew, Ford's all-new, full-size pickup featuring four doors and seating for six adults. SuperCrew production will start in December at Ford's Kansas City, Missouri plant. Lear will open a plant in nearby Liberty, Missouri to assemble F-150 seats. SW Manufacturing opened in 1989.

At least three Japanese parts transplants have benefited recently from the trend toward greater outsourcing by GENERAL MOTORS CORP. Twelve-year-old JIDECO OF BARDSTOWN, INC., a JIDOSHA DENKI KOGYO CO., LTD. company, has won not only its first GM contract but also its first order for an integrated windshield washer system. The Bardstown, Kentucky producer will supply as many as 530,000 combination wiper blade/arm/motor/washer nozzle units annually to GM for its code- named Epsilon car project. Shipments will start in early 2000. Jideco of Bardstown now makes power window motors, ABS (antilock braking system) motors and wiper motors.

Although much of its substantial North American business is generated by TOYOTA MOTOR CORP. assembly plants in the United States and Canada (see Japan-U.S. Business Report No. 359, August 1999, p. 12), AISIN SEIKI CO., LTD. has succeeded in winning a second contract from GENERAL MOTORS CORP. Since June, AISIN DRIVETRAIN, INC. of Crothersville, Indiana has been shipping electronically controlled torque converters for the automatic transmissions of an unidentified GM pickup. The order covers 120,000 units a year. Its sibling, Seymour, Indiana-based AISIN U.S.A. MANUFACTURING, INC., already builds door frames for certain GM vehicles.

Production of ball joints for the suspensions of full-size GENERAL MOTORS CORP. sport-utility vehicles will begin in January 2000 at BIG BEND TECHNOLOGY, INC. In operation for just over two years, the Sparta, Tennessee manufacturer, majority-owned by RHYTHM CORP., has gotten off to an unusually fast start. Although set up to supply the nearby NISSAN MOTOR CO., LTD. factory, BBT also has a contract with a FORD MOTOR CO. supplier for SUV suspension ball joints (see Japan-U.S. Business Report No. 349, October 1998, p. 9). With the GM contract in hand, the company projects that sales will reach $44.2 million in FY 2000 from $21.2 million in FY 1998.

Seat-belt manufacturer ASHIMORI INDUSTRY CO., LTD. has forged a technical alliance with DELPHI AUTOMOTIVE SYSTEMS CORP. The world's largest automotive parts maker will draw on the Osaka prefecture company's technology to make seat belts mainly for sale to American and European vehicle builders. Delphi, however, is expected to go after the seat-belt business of Japanese automotive makers that are not customers of Ashimori Industry, which ranks fourth among producers of seat belts in Japan. In time, the technical tie-up could lead to a joint production and marketing venture, possibly in Southeast Asia.

An exchange rate of ¥113=$1.00 was used in this report.aaaaaa

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