Japanese automotive suppliers are being forced to depend on their ingenuity to survive, reported the Nikkei business newspaper.
This includes thinking outside the box, like U-Shin which has acquired the much bigger car lock operations of Valeo.
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U-shin chairman and president Kohji Tanabe predicted the standardisation of vehicle parts would prompt suppliers to do more business with clients beyond their affiliates, which would lead to an industrial shake-up.
He believes that only three suppliers will survive for each component worldwide. The acquisition by U-shin, which will be finalised at the end of this month, will make the company the world’s top maker of car lock systems.
Japanese carmakers have been pushing for localisation while increasingly standardising parts. Toyota is relocating Corolla production overseas, and Honda will soon produce a new Fit/Jazz subcompact exclusively for the US in Mexico.
Suppliers told the Nikkei that it would become all the more important for parts makers to supply goods to production facilities spread around the globe quickly and cheaply. This will make things tougher for for smaller firms.
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