THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY JAPAN Fact Pack

1
THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT
INDUSTRYJAPANFact Pack

• Swedish Trade Council in Japan
• 2006

2
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Japanese Construction Equipment Industry
• Recommendations
• References
• Executive Summary

3
THE MANUFACTURING INDUSTRY IN JAPAN IS 13 TIMES
AS LARGE AS THE SWEDISH MANUFACTURING INDUSTRY-
automobile manufacturing is a core industry in
Japan

• The total turnover of the Japanese manufacturing
  industry is SEK 17,800 billion
• the Swedish manufacturing industrys turnover is
  SEK 1,357 billion
• There are approximately 500,000 factories within
  the manufacturing industry in Japan
• 8.6 million employees
• Automobile manufacturing is a core industry in
  Japan and imports and exports are both increasing
  
• The average wage for a industry worker in Japan
  is SEK 160 per hour

5 largest manufacturing industries in Japan
Billion SEK
The automotive industry amount 16 of the total
manufacturing industry
Source Japan Automobile Manufacturers
Association, Inc.
4
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Passenger cars and Motorcycles
• Commercial vehicles
• Construction Equipment
• Japanese Construction Equipment Industry
• Recommendations
• References

5
THE JAPANESE PRODUCTION OF CARS AND COMMERCIAL
VEHICLES TOTALS SEK 2,863 BILLION- the industry
is steadily growing
Production cars and commercial vehicles industry
in Japan
billion SEK
Growth due to higher export demand
Source Japan Automobile Manufacturers
Association, Inc.
6
12.6 MILLION VEHICLES ARE PRODUCED IN JAPAN- 9.0
million passenger cars and almost 1.8 million
commercial vehicles
VEHICLE MANUFACTURERS
COMMERCIAL VEHICLES (1,782,924 vehicles)
LIGHT TRUCKS (982,948 vehicles)
BUSSES (76,313 vehicles)
HEAVY TRUCKS (723,663 vehicles)
PASSENGER CARS (9,016,735 vehicles)
Motorcycle (1,791,585 vehicles)
(Max truckload lt 4.0 t )

• 5 manufacturers
• HINO
• NISSAN DIESEL
• MITSUBISHI FUSO
• TOYOTA
• ISUZU

• 6 manufacturers
• HINO
• NISSAN DIESEL
• MITSUBISHI FUSO
• TOYOTA
• MAZDA
• ISUZU
• Trailer manufacturers
• HINO
• NISSAN DIESEL
• ISUZU

• 8 manufacturers
• TOYOTA
• NISSAN
• HONDA
• SUBARU
• MITSUBISHI MORTORS
• MAZDA
• DAIHATSU
• SUZUKI

• 4 manufacturers
• HONDA
• YAMAHA MOTOR
• SUZUKI
• KAWASAKI MOTORS

• 8 manufacturers
• HINO
• NISSAN DIESEL
• MITSUBISHI FUSO
• TOYOTA
• SUBARU
• MAZDA
• ISUZU

Source The Motor Industry of JAPAN 2006
7
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Source HP of each maker
8
TOYOTA PRODUCES THE LARGEST NUMBER OF CARS IN
JAPAN
(Data April, 2005 March,2006)
9
TOYOTA PRODUCES THE LARGEST NUMBER OF CARS IN
JAPAN
(Data April, 2005 March,2006)
10
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Passenger cars, Motorcycles
• Commercial vehicles
• Construction Equipment
• Japanese Construction Equipment Industry
• Recommendations
• References

11
THE PASSENGER CAR PRODUCTION IN JAPAN SLIGHTLY
INCREASES- Export demand covers the slight drop
of domestic sales
Passenger Car Production in Japan
Development in the last 5 years

• Stagnant domestic sales but booming overseas
  production
• Economy and industry have recovered from the long
  slump but the personal buying intention is still
  dull.
• Abnormal increase of raw materials (steel and
  other metals) pushed up the end user prices.
• Mini-cars (with lt 700 cc engine displacement)
  increases 2.6, but normal passenger cars showed
  0.4 drop in 2005.
• Passenger car export showed average 2 increase
  over 2002-5 and is expected to continue
• Japanese overseas production is booming, shows an
  increase of about 1 million cars during the 5
  years
• Product development is all done in Japan

Vehicles
12
THERE ARE 33 MANUFACTURING PLANTS FOR PASSEGER
CARS IN JAPAN
13
4 MAKERS MANUFACTURE TWO-WHEELED MOTOR VEHICLE
AT 5 PLANTS IN JAPAN
(Data April, 2005 March,2006)

• Toyokawa

• Kumamoto

• Akashi

• Iwata daiichi

• Hamamatsu

Source Interview
14
PRODUCTION GROWING IN OVERSEAS, EDGING UP IN
DOMESTIC - Increasing export and overseas
production by Japanese OEMs
Trends within the Japanese passenger car industry
Source STC Tokyo
15
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Passenger cars and Motor cycles
• Commercial Vehicles
• Suppliers
• Japanese Construction Equipment Industry
• Recommendations
• References

16
COMMERCIAL VEHICLE PRODUCTION IS SLIGHTLY
DECREASING- Special demand for vehicles meeting
the emission regulation in major cities has been
fading out
Status in the last 5 years

• Commercial vehicle production showed continuous
  drops since 1997 due to economical and industrial
  slump caused by the burst of the bubble economy
• Commercial vehicle industry once showed an
  increase in 2003 but is gradually dropping again
• In 2003, Tokyo metropolitan government enforced a
  strict regulation to ban an entry of commercial
  vehicles into urban area, that exceeds certain
  amount of particles in emission gas. This
  regulation created a special demand in big cities
  all over Japan for new commercial vehicles
  meeting the regulation. But the demand is calming
  down now
• Japanese commercial vehicle industry has
  traditional unbalance between the number of OEMs
  and domestic demand. Too many OEMS toward the
  shrinking domestic demand
• OEMs try to expand in overseas market but the
  result has not been so positive due to the
  different conditions and requirement in each
  market which is difficult for Japanese OEMS to
  fulfill for its relatively weak management
  foundation

Vehicles
17
6 MAKERS MANUFACTURE COMMERCIAL VEHICLE AT 13
PLANTS IN JAPAN
(Data April, 2005 March,2006)
Source Interview
18
CONTINUOUSLY SLUGGISH COMMERCIAL VEHICLES
MARKET- No major improvement observed in
domestic market
Trends within the Japanese commercial vehicle
industry
Source STC Tokyo
19
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Passenger cars and Motor cycles
• Commercial Vehicles
• Suppliers
• Japanese Construction Equipment Industry
• Recommendations
• References

20
THERE ARE ABOUT 500 AUTOMOTIVE SUPPLIERS IN
JAPAN- 21 of the top 100 automotive suppliers
worldwide are Japanese
Geographical concentration of automotive
suppliers
Japanese automotive suppliers

• There are approx. 500 suppliers for the
  automotive industry in Japan
• 21 of the 100 largest automotive suppliers in the
  world (if you look at the turnover) are Japanese
• There is a very high concentration of automotive
  suppliers in the center area of Japan (along the
  railway line accross the main island)
• Many of the companies are large with number of
  production plants
• Traditionally there is no weak segments in Japan

21
TOP 50 T1 SUPPLIERS BY SALES RANKING
- Denso is the second largest Automotive
supplier in the world

• Cables, bus systems, embedded systems
• Denso
• Yazaki
• Mitsubishi Electric
• Calsonic Kansei
• Sumitomo Denko
• Hitachi
• Tokai Rika
• Bosch Japan
• Panasonic Automotive Systems

• Power train, exhaust systems, engines
• Denso
• Aishin Seiki
• Toyota Industries
• Mitsubishi Electric
• Aishin AW
• Calsonic Kansei
• JTEKT
• JATCO
• NOK
• Sumitomo Metal
• NTN
• Hitachi
• Futaba Sangyo
• NGK Spark Plug
• Asmo
• Daido Special Steel
• Aichi Seiko
• Aishin Takaoka

• Cockpit, seats, dash-board, air conditioning
• Denso
• Aishin Seiki
• Aishin AW
• Calsonic Kansei
• Takata
• Toyota Bosyoku
• Toyota Gosei
• NHK Spring
• Pioneer
• Tokai Rika
• Keihin
• Alpine
• Fujitsu Ten
• Inoac
• Panasonic Automotive Systems
• Tachi-S
• Clarion

• Body, roof, glass, doors, lighting etc.
• Denso
• Toyota Body
• Calsonic Kansei
• Kanto Auto Works
• Nissan Auto Body
• Koito
• Stanley
• Asahi Glass
• Yachiyo Industry
• Bridgestone
• Tokai Rubber

• Suspension, brakes, axles, steering, tires
• Denso
• Aishin Seiki
• JTEKT
• SRI
• Toyota Gosei
• Yokohama Rubber
• Hitachi
• NHK Spring
• Tokai Rika
• Bosch Japan
• KYB
• Bridgestone
• Toyo Rubber
• Advics
• Showa
• Aishin Takaoka
• Hitachi Metal

There are approx. 500 automotive component
suppliers in Japan.
Companies in bold are the Top 20 by sales ranking
Source STC Tokyo
22
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Top 20 T1 Suppliers (1/2)
() total number of employees for all the firms
adopting consolidated accounting
Source Internet, STC Tokyo
23
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Top 20 T1 Suppliers (2/2)
() total number of employees for all the firms
adopting consolidated accounting
Source Internet, STC Tokyo
24
THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE
OEMs (1/4)- Parts suppliers distribute all over
Japan
Source Internet, STC Tokyo
25
THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE
OEMs (2/4)- Aichi is the parts base for Toyota
and Mitsubishi
Aichi Prefecture
Source Internet, STC Tokyo
26
THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE
OEMs (3/4)- Shizuoka is the parts base for
Toyota and Nissan
Shizuoka Prefecture
Source Internet, STC Tokyo
27
THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE
OEMs (4/4)- Kanagawa is the parts base for
Nissan
Kanagawa Prefecture
Source Internet, STC Tokyo
28
THERE ARE MORE THAN 300 T2 SUPPLIERS LOCATED IN
JAPAN- companies use only Japanese suppliers
T2 SUPPLIERS
Interior equipment
Propulsion
Body
Running gear

• Power train, exhaust systems, engines
• Denso
• Aishin seiki
• Mitsubishi Electric
• JTEK
• NOK
• Sumitomo Metal
• Hitachi
• NTN
• NGK
• Asmo
• Aichi Seiko
• Tokai Rubber
• Aishin Takaoka
• Yutaka Giken
• AIsan
• Exedy
• Aichi Kikai
• Fuji Kiko

• Cockpit, seats, dash-board, air conditioning
• Denso
• Aishin Seiki
• Calsonic Kansei
• Toyota Boshoku
• Toyota Gosei
• NHK Spring
• Tokai Rika
• Keihin
• Inoac
• Shiroki Kogyo
• Valeo Thermal Systems
• Nihon Plast
• Fuji Kiko
• Imasen
• Mikuni
• Howa Seni

• Body, roof, glass, doors, lighting etc.
• Denso
• Calsonic Kansei
• Koito
• Stanley Electroc
• Bridgestone
• Tokai Rubber
• Ichiko
• Imasen

• Suspension, brakes, axles, steering, tires
• Denso
• JTEKT
• Toyota Gosei
• Hitachi
• NHK Spring
• Tokai Rika
• KYB
• AIshin Takaoka
• Hitachi Metal
• Topy
• Chuo Hatsujyo
• Nisshinbo

Companies in bold are the Top 20 by sales ranking
Source Internet, STC Tokyo
29
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Top 20 T2 Suppliers (1/2)
() total number of employees for all the firms
adopting consolidated accounting
Source Internet, STC Tokyo
30
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Top 20 T2 Suppliers (2/2)
() total number of employees for all the firms
adopting consolidated accounting
Source Internet, STC Tokyo
31
THE T2 SUPPLIERS ARE LOCATED NEAR THE VEHICLE
OEMS- Many T1 suppliers are also T2 suppliers
Denso Aishin Seiki Yazaki Mitsubishi
Electric Calsonic Kansei JTEKT Toyota
Boshoku Toyota Gosei NOK Sumitomo
Metal NTN Hitachi Koito
NHK Spring Tokai Rika Stanley KYB NGK Keihin
Bridgestone
32
JAPANESE AUTOMOTIVE PARTS INDUSTRY IS BOOMING -
Increasing export and overseas production by
Japanese parts suppliers
Trends within the Japanese Automotive supplier
industry
Source STC Tokyo
33
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Japanese Construction Equipment Industry
• Manufacturers
• Suppliers
• Recommendations
• References

34
THE JAPANESE PRODUCTION OF CONSTRUCTION EQUIPMENT
TOTALS ABOUT SEK 117.8 BILLION- the industry
grew nearly 15 in 2005
Other Machines SEK 12.9 billion
Construction machines and construction vehicles
in Japan
billion SEK
Concrete SEK 1.4 billion
Underground SEK 1.9 billion
Road SEK 3.2 billion
Lifting SEK 26 billion
Earth Moving SEK 71 billion
Earth Moving machine leads the industry by
sharing more than 60 of production
Source German Automotive Association
35
514,000 CONSTRUCTION EQUIPMENT ARE PRODUCED IN
JAPAN
FOUNDATION WORK EQUIPMENT (1,192 vehicles)
Ground engineering

• 23 manufacturer
• IHI
• Kato
• Kobelco
• Hitachi Kenki
• Hitachi Sumitomo
• Maeda
• Aichi
• Tadano
• Komatsu
• Kyokuto
• ShinMaywa
• Taikyoku
• Toyota Industries
• Nagano Industry
• Meiwa
• Furukawa
• Nichiyu
• Sumitomo Nacco

• 15 manufacturers
• Atlas Copco
• Koken Boring
• TCM
• Furukawa
• IHI
• Kawasaki H. I.
• Komatsu
• Sanwa Kizai
• JFE Engineering
• Toho Chika Koki
• Geotec Machinery
• Hitachi Kenki
• Maeda
• Maruzen Kogyo
• MHI

• 14 manufacturer
• Kato
• Komatsu
• CAT-M
• Kawasaki H. I.
• Sakai H. I.
• Sumitomo Kenki
• Taikyoku
• Hitachi Kenki
• Furukawa
• Bomag
• Mikasa
• Meiwa
• Kanto
• Hanta Kikai

• 14 manufacturer
• Atlas Copco
• Avolon
• IHI
• Kato
• Sanwa Kiko
• Sanwa Kizai
• Chowa Kogyo
• Daiwa
• Toho Chika Koki
• Nippon Sharyo
• Hitachi Kenki
• Hitachi Sumitomo
• Maruzen Kogyo
• MHI

• 12 manufacturer
• IHI
• Kyokuto
• Symtec
• ShinMaywa
• Daiichi Tecno
• Kitagawa
• Kurihara
• Sanwa Kizai
• Nihon Kenki
• Nakayama Iron
• Avolon
• Exen

• 21 manufacturer
• Komatsu
• Denyo
• Hokuetsu Kogyo
• Kubota
• CAT-M
• Chikusui Canycom
• Hitachi Kenki
• Morooka
• Yanmar
• Okada Aiyon
• Kobelco
• Kurihara
• Sumitomo Kenki
• Teisaku
• Taguchi
• Toyo Kuki
• Nakayama Iron
• NPK

• 18 manufacturers
• Komatsu
• CAT-M
• Furukawa
• Kawasaki
• Kobelco
• Kubota
• Sakai H.I.
• TCM
• Takeuchi
• Toyota Industries
• Hitachi Kenki
• MHI
• Yanmar
• IHI
• Kato
• Sumitomo Kenki
• Nagano Industry
• Hokuetsu Kogyo

THERE ARE 74 MANUFACTURERS IN JAPAN
Source Japan Construction Equipment
Manufacturers Association Japan Industrial
Vehicles Association
36
ALL PURCHASE DECISIONS ARE MADE IN JAPAN- CAT-M
makes the purchasing decisions for the models
produced in Japan
Construction equipment (1/5)
() total number of employees for all the firms
adopting consolidated accounting
Source STC Tokyo
37
ALL PURCHASE DECISIONS ARE MADE IN JAPAN-
Designers and Purchasers are located in the
production plants
Construction equipment (2/5)
() total number of employees for all the firms
adopting consolidated accounting
Source STC Tokyo
38
ALL PURCHASE DECISIONS ARE MADE IN JAPAN- Koken
Boring and others start web-based purchasing
Construction equipment (3/5)
() total number of employees for all the firms
adopting consolidated accounting
Source STC Tokyo
39
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Construction equipment (4/5)
() total number of employees for all the firms
adopting consolidated accounting
Source STC Tokyo
40
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Construction equipment (5/5)
() total number of employees for all the firms
adopting consolidated accounting
Source STC Tokyo
41
Production plants (1/4)
EARTH MOVING EQUIPMENT MAKERS
?
?
?
?
?
?
Source Internet, STC Tokyo
Source Internet, STC Tokyo
42
LIFTING EQUIPMENT / ROAD EQUIPMENT MAKERS
Production plants (2/4)
Source Internet, STC Tokyo
43
UNDERGROUND / CONCRETE EQUIPMENT MAKERS (3/4)
Production plants (3/4)
Source Internet, STC Tokyo
44
FOUNDATION WORK EQUIPMENT / OTHER MACHINES
MAKERS (4/4)
Production plants (4/4)
Source Internet, STC Tokyo
45
PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS
(1/5)
http//www.khi.co.jp/
http//www.kobelco-kenki.co.jp/
http//www.kenki.kubota.co.jp/
http//www.kenki.kubota.co.jp/
http//www.tcm.co.jp/
http//www.takeuchi-mfg.co.jp/
http//www.toyota-shokki.co.jp/
http//www.mhi.co.jp/fla.html
Production volume per plant is not available in
Japan
Source STC Tokyo
46
PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS
(2/5)
Production volume per plant is not available in
Japan
Source STC Tokyo
47
PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS
(3/5)
Production volume per plant is not available in
Japan
Source STC Tokyo
48
PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS
(4/5)
Production volume per plant is not available in
Japan
Source STC Tokyo
49
PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS
(5/5)
Production volume per plant is not available in
Japan
Source STC Tokyo
50
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Japanese Construction Equipment Industry
• Manufacturers
• Suppliers
• Recommendations
• References

51
MOST OF T1 SUPPLIERS ARE COMMON TO AUTOMOTIVE
SECTOR
Propulsion and Running Gear
Companies in bold are the Top 20 by sales ranking
Suppliers who are T2 as well
Source Internet, STC Tokyo
52
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Top 20 T1 Suppliers (1/2)
() total number of employees for all the firms
adopting consolidated accounting
Source Internet, STC Tokyo
53
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Top 20 T1 Suppliers (2/2)
() total number of employees for all the firms
adopting consolidated accounting
Source Internet, STC Tokyo
54
THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE
OEMS
Denso Isuzu Toyota Industries Hino
Motors Mitsubishi Fuso Kubota Hitachi
Kenki JTEKT Sumitomo Rubber Nissan Diesel
Toyota Gosei Yokohama Rubber NOK Sumitomo
Metal NTNHitachi
Koito NHK Spring Tokai Rika Stanley Electric
Source Internet, STC Tokyo
55
THERE ARE ABOUT 150 T2 SUPPLIERS LOCATED IN
JAPAN- Most of the suppliers are common to
automotive sector
T2 SUPPLIERS
Companies in bold are the Top 20 by sales ranking
Source Internet, STC Tokyo
56
THE T2 SUPPLIERS ARE LOCATED NEAR THE VEHICLE
OEMS- Many T1 suppliers are also T2 suppliers
Denso JTEKT Toyota Gosei NOK Sumitomo
Metal NTN Hitachi Koito NHK Spring Tokai
Rika Stanley KYB Bridgestone
Asmo Aichi Seiko Tokai Rubber Aishin
Takaoka Topy Exedy Toshiba Machine
57
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Top 20 T2 Suppliers (1/2)
() total number of employees for all the firms
adopting consolidated accounting
Source Internet, STC Tokyo
58
ALL PURCHASE DECISIONS ARE MADE IN JAPAN
Top 20 T2 Suppliers
() total number of employees for all the firms
adopting consolidated accounting
Source Internet, STC Tokyo
59
THE CONSTRUCTION EQUIPMENT INDUSTRY IS BOOMING -
Japanese OEMs mostly use Japanese parts
Trends within the Japanese construction equipment
industry
Source STC Tokyo
60
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Japanese Construction Equipment Industry
• Recommendations
• References

61
RECOMMENDATIONS FOR MAKING BUSINESS WITH THE
JAPANESE AUTOMOTIVE CONSTRUCTION EQUIPMENT
INDUSTRY- Japan is a competitive market but a
break through in Japan ensures your success in
global market
62
CONTENT

• Overview Japanese Manufacturing Industry
• Japanese Automotive industry
• Japanese Construction Equipment Industry
• Recommendations
• References

63
STC PROVIDES SUPPORTS IN ALL BUSINESS DEVELOPMENT
PROCESS
Country specific
64
STC TOKYO HAS HELPED NUMEROUS SWEDISH COMPANIES
TO DO BUSINESS WITH THE JAPANESE AUTOMOTIVE AND
CONSTRUCTION EQUIPMENT INDUSTRY
65
STC CARRIED OUT AN MARKET ANALYSIS AND AN
IN-DEPTH CUSTOMER ACQUISITION AND LEADS
GENERATION FOR KARLSSON
Step3 Sample delivery

• At the kick- off the team from the STC Tokyo was
  educated and the project outline was discussed
• At workshop 1 the STC presented the results from
  step 1 and gave recommendation for how to
  approach the Japanese market
• STC Tokyo interacts between Karlsson and
  potential customers for business and technical
  subjects

66
STC CARRIED OUT A NUMBER OF MARKET DEVELOPMENT
ACTIVITIES FOR CUPROBRAZE PROCESS OF LUVATA AB,
OVER 6 YEARS IN JAPAN
Outline of project