Japanese supplier Yachiyo seeks to end dependence on Honda

By Hans Greimel
AUTOMOTIVE NEWS

Published: January 28, 2013 12:53 pm ET
Updated: January 28, 2013 12:56 pm ET

Related to this story

Topics Automotive, Blow Molding
Companies & Associations Honda Motor Co. Ltd.

SAYAMA, JAPAN -- Honda-affiliated supplier Yachiyo Industry Co. wants to boost sales of sunroofs and plastic fuel tanks to overseas automakers as it tries to diversify away from its top customer.

Yachiyo, which has four factories in North America, wants half of its sales to come from non-Honda Motor Co. brands as early as 2020.

Honda now accounts for roughly 95 percent of Yachiyo's sales.

"We have to expand our business to other companies," said Toshiro Yoshida, general manager for corporate planning.

The Japanese parts maker, in which Honda has a 50 percent stake, also plans to introduce new products and enter new segments as it reduces its reliance on Honda, Yoshida said.

Yachiyo, of Sayama City in Saitama Prefecture, Japan, needs new revenue sources as it braces for a major shakeup of its traditional business model.

Since 1976, Yachiyo has been a contract body assembler for Honda. And since 2007 it has been the sole supplier of Honda's Japan-market minicars, a Japan-only category of vehicles that by law must have engines no larger than 660cc. Minivehicles make up more than one-third of the Japanese light-vehicle market.

But last year Honda pulled the plug on the arrangement when it decided to bring minicar production in-house. Yachiyo expects its minivehicle output to all but disappear by 2017.

That means a huge adjustment: Vehicle assembly accounted for about 41 percent of Yachiyo's revenue in the fiscal year ended March 31, 2012. That is expected to tumble to 25 percent in the current fiscal year -- and keep dropping.

To fill the gap, Yachiyo plans to bolster its parts business, focusing on its two top products: sunroofs and fuel tanks.

It already sells modest volumes of those products to Toyota Motor Corp., Suzuki Motor Corp. and Mitsubishi Motors Corp.

This year it will also start supplying plastic fuel tanks to Isuzu Motors Ltd. in Thailand and sunroofs to Geely Automobile Holdings in China.

A new Yachiyo manufacturing plant in Mexico will start making plastic fuel tanks and sunroofs for Honda this year. Yachiyo wants to supply other automakers in that country, too.

At the Guangzhou motor show in November it showed a new front-opening sunroof. Designers moved the roof opening forward to where it nearly touches the windshield, separated only by a narrow cross member. It creates a more open feeling and better visibility.

The company also is developing automated grille shutters that can open and close to improve a car's aerodynamics. That product relies on the plastic technologies used in Yachiyo's fuel tanks and the motor technologies used in its sunroofs.

Finally, Yachiyo aims to break into an entirely new nonautomotive segment: portable liquefied petroleum gas tanks, which are used throughout the developing world for cooking and heating.

But instead of offering a traditional metal tank, Yachiyo will use its plastic technology for cars to deliver a plastic LPG tank that is lighter and, the company says, safer than metal versions.


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Japanese supplier Yachiyo seeks to end dependence on Honda

By Hans Greimel
AUTOMOTIVE NEWS

Published: January 28, 2013 12:53 pm ET
Updated: January 28, 2013 12:56 pm ET

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