Auto News From Japan - June 2002

Daily News---June 2002

June 24, 2002

Japanese automakers show good business performance in May

On the 21st, five large Japanese automakers announced their sales, production and export figures in May. Toyota and Honda marked the highest figure ever for monthly overseas production and Nissan achieved the highest overseas production for May alone. The five automakers also expanded exports, especially to North America and Asia. All automakers, except Mazda, showed two-digit increases for domestic production.
(See details for automakers' business performance in May)

Government to promote diesel vehicles

The Ministry of Economy, Trade and Industry is scheduled to start plans to revitalize diesel vehicle sales. They plan to open symposium in cooperation with the automotive industry for general vehicle users to appeal advantages of diesel vehicles. Through the revitalizing plans, they will emphasize environmentally friendliness of diesel engines, including high fuel efficiency and low CO2 emissions. Only 5 percent of passenger cars produced in 2000 were diesel vehicles (410,000 units). However, most of them were exported overseas. Japanese automakers, fuel injection system and catalyst makers have been strengthening development for diesel engines in Europe where diesel cars account for over 30 percent of total passenger car sales. But they are having a difficult time retrieving development costs in Japan. The government thinks that revitalization of the domestic diesel vehicle market will be necessary in order to compete in the fierce global market.

Sumitomo Electric Industries and Sumitomo Wiring Systems try to achieve a 20 percent global share for wire harnesses

Sumitomo Electric Industries and Sumitomo Wiring Systems have set a global sales target of 20 percent for wire harnesses in the next five years. Their current share is 11 percent. They think that purchases of a wire harness business of Calsonic Kansei last month will help achieve a 15 percent share in 2004. In order to achieve this goal, they plan to strengthen R&D for modularization, LAN systems and EVs/HEVs. They will utilize their current 55 global production bases to expand business deals with both foreign and Japanese makers. They also plan to increase overseas production ratio to 80 percent (currently 60 percent) to cut costs. In the global market, Yazaki and Delphi are the top makers with sales shares of 25 percent. If the Sumitomo group achieves a 20 percent share, they will be the third largest.

Tyco Electronics Amp to propose a global standard for automobile connectors

Tyco Electronics Amp, a Japanese subsidiary of Tyco Electronics in the US, plans to propose their inhouse connectors as a global standard product to their group companies overseas. They also think that using the same standards globally will greatly reduce development costs for metal fittings. Tyco group is the world largest connector maker, having production bases in North America, Europe and Asia. Tyco Electronics Amp has already supplied their products to Japanese automakers, who have one of the toughest quality standards for connectors. Their multi-lock connectors for ECUs are produced in the global market and they are supplied to Ford, DaimlerChrysler, Fiat and Renault.

June 21, 2002

Mitsubishi to adopt consolidated design for passenger lineup

Mitsubishi plans to strengthen their brand image for the global market by consolidating design characteristics for passenger cars. They are scheduled to adopt a consolidated logo and body design to create a new Mitsubishi brand identity. In their "Turnaround" business restructuring plan, they will aggressively release new products ranging from sedans, minivans and SUV's to subcompacts. Over the next three years, thirty new models are expected to appear on the market.

Daihatsu develops a new processing technology without metal fittings

Daihatsu has developed a new processing technology for outer panel parts without metal fittings. The new technology, called "Hammer Hemming", uses robots with arms having hammer function and applying hemming processing. The combination of two methods creates precise forming. For models produced on a large scale, automakers usually apply press forming technology. However, metal fittings require high cost, which is hard to retrieve for small-scale production models. The new technology made it possible to cut costs for the Copen, a new convertible sports car. As a result, they could provide a reasonable price for the Copen at lower than 1,500,000 yen. Daihatsu used the method for three aluminum parts, including engine hoods, roofs and trunk lids. The new technology can also be applicable for different forming applications just by making some changes in the computer programming.

Denso supplies front-end modules for the Copen

Denso has started supplying front-end modules to Daihatsu for the Copen, a new convertible subcompact. The module consists of radiators, condensers for air conditioning systems, electronic fans and inter-coolers. These parts are combined with a newly developed front carrier, which is made by injection molded polypropylene reinforced by continuous glass fibers. They achieved a weight reduction by 30 percent of conventional systems. Denso has modified design for parts that will create high temperature such as radiators and condensers in order to increase operational efficiency while achieving weight reduction and downsizing. Denso has already completed development of cleaning modules and intake modules and cockpit modules.

Diesel engine production totals 500,000 at Isuzu Motor Polska

On the 20th, Isuzu announced that production of diesel engines at Isuzu Motor Polska (ISPOL Isuzu Poland) has reached 500,000 units. They started production of diesel engines for the Opel Astra in June 1999. They have manufactured 1.7 liter 4 cylinder direct injection diesel engines that are applied for three Opel models and Honda Civic. The engine (with specifications for marine use) is also supplied to Mercury Cruiser. Annual production is 13,000 units in 1999 and expanded to 205,000 units in 2001. In 2002, they plan to achieve a 17 percent increase (239,000 units). Isuzu plans to further strengthen diesel engine production in Europe where diesel vehicles account for 36 percent in the passenger car market in 2001.

Tokai Rubber to produce ultra-low fuel penetration hoses

Tokai Rubber is scheduled to start a large-scale production of ultra-low fuel penetration hoses in Japan and the US. The hose is designed to clear the LEV II, new US automobile emission regulations, which will take effect in 2004. The LEV II require 1/4 HC emission reduction. Their ultra-low fuel penetration hose has thin fluoric resin applied internal surface and reduce HC penetration by 99 percent. With the new method, flexibility of the hose can be maintained. They've also succeeded in achieving low penetration for filler hoses, connecting a fuel injection inlet and a tank, by modifying joint design.

Yokohama Rubber to consolidate tire specifications with Continental

Yokohama Rubber has revealed that they will integrate tire specifications with their business partner, Continental in Germany. This February, the two companies formed an alliance for global production. Through the alliance they plan to create a smooth production by consolidating specifications and utilizing their current production bases each other. Yokohama plans to use Continental's European plant and conduct OEM production of Continental's products for the Japanese market. Technology staff from both companies will soon get together and start meetings to draw up detailed schedules. The two companies have already established a joint venture for OEM business for Japanese makers.

Small cars expected to dominate the passenger car industry

Small car demand has been skyrocketing. In May, sales ratio for small cars surpassed 80 percent of total passenger car sales. In the entire automobile market, compact cars captured 64 percent. From 1995 to 2000, compact passenger cars accounted for around 75 percent. Since the latter half of 2001, price for compact cars have been gradually lowering and automakers introduced new lineup, which helped expand compact share. Popular compact lineup are the Honda Fit, Toyota Corolla, Vitz and ist and Nissan March. From this coming autumn, automakers plan to launch new models, including the new Mazda Demio, Nissan Cube and a Mitsubishi's new compact.

June 20, 2002

Daihatsu launches a new subcompact convertable sports car, the Copen

On the 19th, Daihatsu introduced a new two-seater sports open car, called the Copen (see specifications). The first subcompact with a hard top, named "Active top". The convertible hard top can be completely tucked in just 20 seconds. The chassis is equipped with a newly developed turbocharged engine and specialized suspension. The Copen has the same chassis (FF layout) with the Mira. The two models also share 40 percent of parts. The Copen has lower floorboards than the Mira (180mm) that create a sporty driving feel. The concept for its introduction as a new model is "Active-top, Compact, & Open" and will be available in eight different body colors. Testing of the car for safety and performance has cleared itself with several collision & roll-over tests, while achieving a low-emission level less than 50 percent of the latest regulated figures. Equipped with a 5 speed manual transmission, also cleared 2010 fuel economy standards thus qualifying for Green preferential taxation. The monthly sales target is 500 units with a sticker price of 1,498,000 yen. In September, they are scheduled to introduce a "Detachable Top" version.
http://www.daihatsu.co.jp/copen/index.htm

Mitsubishi to consolidate frame design of truck diesel engines

Mitsubishi has announced that they will consolidate the basic structure of diesel engines for their line of trucks. They plan to use commonrail system with an inter-cooled turbocharger for higher combustion efficiency and EGR system (Exhaust Gas Recirculation system). This is in response to strengthened emission regulations for diesel engines. They intend to reduce costs by integrating basic structure and parts of diesel engines. The government is scheduled to implement 2003 short-term emission regulations and 2005 long-term regulations to reduce hazardous substance in the air, including NOx.

Sales price for the Vitz decline

Sales of the Toyota Vitz (Yaris models in Europe) have been decreasing as the Honda Fit, its rival model, has been showing strong sales. Average price discount for Vitz lowered by 100,000 yen while average discounted price for other models is 50,000 yen at the highest. The introduction of the Nissan March also hindered sales increases of the Vitz. In addition, Toyota has recently introduced a new model in the same class, called the "ist". It is sold through the same dealer network with the Vitz. Toyota regards the ist as the model that can defeat the Honda Fit. They set a reasonable sticker price of 1,180,000 yen while it has a luxury tastes and sporty image. On the other hand, sticker price for the Vitz is 1,070,000 yen and already two and half years have passed since its introduction. Toyota has also added ULEV version to the Vitz (last December) and other special versions but sales have not increased as expected.

Mazda to adopt "Master system"

Mazda has decided to adopt "Master system" in order to train special skills for dealer staff. They will choose sales staff specialized for each model. Through the new system, "master" sales staff should gain a wide-range of knowledge from competitor models to industry trends to lead other staff. Starting with the introduction of the Atenza (Mazda6), Mazda is now trying to lure users who are very peculiar about cars, including import car owners, by strengthening uniqueness design and high level of driving performance. Prior to the introduction of the Atenza, Mazda trained their staff by conducting driving tests and adopting new training methods. These training methods, labeled "Atenza Master," are for having special knowledge about the model. Mazda plans to expand the "Master System" to provide fine-tuned service at showrooms and improve their company image.

BMW Japan to facilitate recycling

BMW Japan plans to expand network of disassembling plants certified by BMW in order to increase recycling BMW vehicles. They have so far certified four companies. BMW Japan to start recycling engines and transmissions in 1990. Since 1994, they have been accepting out of registration cars without charge. They also accept discarded vehicles taken in by local governments. As a result, total of 831 vehicles has been recycled. They expect demand for recycled parts will increase as used car sales expand. Over the next five to ten years, they plan to expand BMW certified disassembling plans across the nation.

Steel makers to request a 10 percent price increase

On the 18th, steel makers and automakers, their major clients, started negotiation to increase price for steel material. Steel makers are expected to request for bringing up the price to international levels, which is about 10 percent increase. This is in response to automakers' strong business performance in FY2001. However, automakers plan to offer a strong resistance against the request. Last year, four out of five large steel makers showed deficits. This spring, they started increasing wholesale price, and so far their effort has been showing good results. According to a leading steel maker, they think that automakers will understand their position and eventually agree to the 10 percent increase. However, if their requests are accepted, the results will affect to other industries such as chemical makers who also seek for price increases. In order to avoid this, steel makers plan to undisclosed any information through the negotiation.

June 19, 2002

Toyota starts development of hydrogen tank technology using carbon nano-tube

Toyota has started development using carbon nano-tubes for hydrogen tanks. They plan to develop light and compact hydrogen tanks for FCEVs. Characteristics of carbon nano-tubes are absorbing hydrogen at low temperature and discharging it at high temperature. In order to commercialize the product, 3 percent of stable hydrogen absorption ratio has to be achieved. Toyota is also trying to develop international standards for evaluation systems for carbon nano-tubes. Toyota thinks that carbon nano-tubes will be an important technology for FCEVs to replace gasoline vehicles. Their 2003 FCEV is scheduled to be equipped with the system.

Mitsubishi to introduce a second SUV in China

Mitsubishi has revealed that they will introduce a second SUV, following the Pajero Sports (Challenger), for the Chinese market. The major candidate for the second SUV is the Airtrek. They are currently proceeding with a plan to produce 10,000 Pajero Sports at Peking Jeep annually. By adding the new model, their annual production is expected to reach 20,000 units. Both models will be sold at Mitsubishi sales network dealers.

Mitsubishi launched all new Canter

On the 18th, Mitsubishi released the new Canter. The new Canter, the seventh generation model, conducted a full model change for the first time in 8 years and 7 months. They also plan to add a 4WD version in July and CNG/LPG versions after October. The new model is developed for the international market with a concept of "Global Fit". They achieved a roomy interior by improving front pillar angles and side tumble. They adopted instrument panel manual transmission levers for the first time in the world in order to achieve an easy operation. For high usability, it has a parking brake lever moving down to the level of front seats so that a driver can easily move to the front passenger seat. Monthly sales target is 3,700 units.

Sales of clean vehicles reach 1,540,000 units

According to the Ministry of Land, Infrastructure and Transport, 2001 clean car sales reached 1,540,000 units which is double their initial target. They think aggressive automakers efforts to increase clean models that can be profited from green preferential taxation. The government categorizes CNG vehicles, EVs, methanol vehicles and HEVs as the four major clean vehicles and they regard gasoline vehicles which qualify for green taxation as clean vehicles. Gasoline vehicles accounted for over 90 percent of the total clean vehicles sold in 2001 (1,514,339 units), followed by hybrid vehicles (24,844 units). As of the end of March, the number of clean models reached 187 (79 models in 1999). Green preferential taxation is scheduled to expire this fiscal year, but they plan to postpone the expiration date to FY2010 in order to achieve 10 million unit sales. However, the government has to clear objections from financial authorities and Ministry of Public Management, Home Affairs, Posts and Telecommunications who are worried about the loss of tax revenue.

Tyco Electronics to produce connectors in Asia

Tyco Electronics, a US maker, will soon start production of connectors at their relay plants in order to increase operation ratio of the plant. Production will be conducted in Indonesia and China. They also plan to export connectors to Japan. Their Indonesian and Chinese plants produce relays and export them to Japan. For connectors, they have plants in Japan, China and Korea. But sales from connectors have been declining due to fierce cost competition. On the other hand, demand of connectors has been stable. By starting connector production in the two plants, they plan to increase sales ratio in Asia from the current 18 percent to 25 percent. In Japan, Tyco Electronics has Japanese corporations: Tyco Electronics Amp for connectors and Tyco Electronics EC for relays.

Unisia Jecs to concentrate on electronic systems

Unisia Jecs will be a 100 percent subsidiary of Hitachi as of October 1 in order to comprehensively strengthen electronic business. Unisia Jecs belongs to the Nissan group. After October, Hitachi will be a policy leader and expand electronic system business. In the midst of fierce competition in the automotive market, parts makers, including Unisia Jecs are forced to become independent away from the Nissan group. Currently, Hitachi and Unisa Jecs are heavily dependant on Nissan with 50 and 70 percent of their respective sales gained from the group. They plan to use Hitachi's superiority in motors for hybrid vehicles and EVs and UJ's superiority in power steering systems. In order to meet automakers needs for cost reduction and fast delivery, they will expand overseas production (China and Mexico). They plan to increase overseas sales ratio from the current 40 percent to over 50 percent in 2005.

June 18, 2002

Suzuki to cooperate NEC and Fuji Heavy Industires for a secondary battery development

Suzuki has announced that they will participate in joint development of secondary batteries for hybrid vehicles between NEC and Fuji Heavy Industries. Through the joint development, they plan to accumulate know-how for next-generation compact clean vehicles. Suzuki and Fuji Heavy have already agreed on parts sharing for subcompacts and they plan to expand cooperation by taking advantage of being in the same GM group. NEC and Fuji Heavy Industries are developing lithium ion batteries using manganese instead of cobalt to reduce costs. They have also improved charging control to succeed in both high longevity and close to full-charging operation.

Mazda targets import car owners for the Atenza

Mazda plans to strengthen sales promotion for the Atenza in order to lure import car owners. Because they moved up the introduction date for the five-door type, which is popular in the European market, over 10 percent of total visitors at its roll-out are import car owners. Through sales promotion for import car owners who are usually very peculiar about specifications, they will emphasize its uniqueness and total performance equivalent to or higher than European cars. They hope it will also help improve their brand image.

Fuji Heavy Industries to reduce VOC by 30 percent

Fuji Heavy Industries has announced that by 2006 they will reduce VOC (Volatile Organic Compounds) by 30 percent from their plants. VOC is created through painting procedures and listed on PRTR laws (Pollutant Release and Transfer Register), an emission control regulation. They plan to reduce VOC volume from the current 58g/m2 to 45g/m2 and facilitate water painting development. They have already succeeded in halving VOC volume in five years since 1995 by increasing resin and pigment contents.

Register car owners to shift to subcompacts

According to a 2001 report by JAMA, 29 percent of subcompact owners are ex-owners of registered cars. In 1998, subcompact standards have been revised and they allow larger body size. Demand for subcompact cars has expanded since then and in 1999 the figure reached the highest ever of 1,999,000 units. Subcompacts have spread among rural areas by replacing bicycles and scooters in many parts of western Japan. In the report, more people use subcompacts as an easy-to-use transportation, especially among woman and elderly users. Woman users account for 62 percent and 53 percent are married women. In a 1999 report, about 65 percent of subcompact drivers used their rear seats for passengers due to their narrow space. In the 2001 report, the figure increased to 76 percent after automakers tried to create more roomy interiors. According to the 2001 report, 87 percent of respondents said they choose subcompacts because of lower taxation and 51 percent said that prices are low while fewer users attach importance to being user-friendly. Forty five percent answered that high fuel efficiency is the reason to choose subcompacts.

Nisshinbo develops a new capacitor

Nisshinbo announced on the 17th that they have developed a new capacitor for HEVs and EVs. They used ionic liquid superior in heat and electric pressure resistance, which made it possible for large charge and discharge electric flow. They are scheduled to soon start delivering samples. Their newly developed ionic liquid has high conductivity and does not vaporize at high temperature. Compared to imidazolium based ionic liquid, costs can be greatly reduced while having higher electric strength (over 140 percent). Specifications of single cell for capacitors are rated voltage of 2.5 volts, electric capacity of 2,000 farads and maximum output is 600 watts. They also developed a capacitor module consisting of 6 single cells connected in series (rated voltage of 14 volts).

Nine Toyota models get high rating in customer satisfaction ranking in the US

J.D Power Asia Pacific announced their 2002 Initial Quality Study for the US market. The study was conducted on malfunctions that occur during the first 90 days after purchase. This is their 19th IQS study and surveyed over 65,000 new model buyers. The lower the rate, higher the quality. In the study, average IWS score is 133 points, which is down 14 points. Toyota/Lexus dominates the top in nine passenger car sections: Toyota Corolla and Prius in the compact passenger section, Lexus GS300/GS430 in the mid luxury section, and Lexus LS430 in the premium luxury section. In the light truck section, they captured the top in six sections. Automakers who showed high levels of improvement include Isuzu, Mitsubishi, Toyota, GM and DaimlerChrysler. A model that showed the highest improved ratio is the Chevrolet Malibu, followed by the Buick Century and Chevrolet Corvette. The Ford Thunderbird became the top in the entry luxury section. GM captured the top in four passenger car sections and Ford got the top each in light/truck and passenger car sections.

June 17, 2002

Mitsubishi and DaimlerChrysler to develop hydrogen direct injection FCEVs

Mitsubishi has decided to develop a hydrogen direct injection type FCEV in cooperation with DaimlerChrysler. They have been jointly developing FCEVs with Mitsubishi Heavy Industries. They plan to cancel the joint development and facilitate joint development with DaimlerChrysler for the automotive field. On the other hand, DaimlerChrysler has been developing methanol reformer type FCEVs with Ford. However, commercialization of methanol FCEVs is expected to be difficult due to delays in infrastructure establishment in addition to technological problems. Mitsubishi is scheduled to send development staff to DaimlerChrysler and set up a FC development section in order to strengthen cooperation. In 2003, the government plans to start FCEV public road tests and Mitsubishi is scheduled to participate the tests as a member of the DaimlerChrysler group. In the FCEV industry, Toyota and Honda have decided to commercialize their first products in 2003.

Honda targets minus 20-degree startup for 2003 FCEV

Honda is trying to develop a FCEV that will be able to start at minus 20 degrees. This is equivalent to regular passenger cars and designed for southern part of Japan down from Kanto area. FCEVs are inferior in cold condition because water created during power generation tends to freeze inside of the powertrain. Honda plans to improve system layouts in order to increase adiathermancy. Honda has announced that they will start commercialization of FCEVs from 2003 in limited number. However, there are many problems to be solved, including high costs for precious metal used in fuel cells.

Honda to expand domestic dealer network

Honda plans to increase service staff at dealers by 1000 people by FY2004. At the same time, they plan to improve their current service system in order to achieve 1 million unit sales in FY2004. By the end of 2003, they plan to establish 312 additional shops. Honda's sales in FY2001 were 891,649 units, up 12.8 percent on year-to-year comparison.

Toyota increases production in Brazil

Toyota announced on the 14th that they will increase production capacity of their Brazilian plant, TDB, from the current 15,000 units per year to 57,000 units. They have invested about $300 million and expanded its floor area from 29,000m2 to 69,000m2. In addition, they set up new pressing facilities. As a result, they have succeeded in increasing domestic production ratio to 70 percent for the Corolla. In line with its expansion, they also hired 1,000 additional staff. Last year, TDB produced 13,000 Corollas and exported to 20 different countries located in Central and South America.

Aichi Steel to triple forged iron production in China

Aichi Steel plans to greatly expand forged iron production in China. They have received orders for engine parts from Guangzhou Honda Automobile for the Accord and for crankshafts from Toyota for the IMV (Innovated International Multipurpose Vehicle), produced in Thailand and Indonesia. This April, Aichi Steel established a joint venture with Shanghai Automotive Industry Group, called Shanghai Aichi Forged and the new company took over business of Shanghai Automotive Industry Group (crankshaft and connecting rod production) for GM, Volkswagen and Suzuki. From summer 2004, they are scheduled to supply 450,000 units in China.

Sales of handicapped vehicles slow down

Sales of vehicles for handicapped people have been decreasing. Although the figure jumped up fourfold in the past five years, a long-term unstable Japanese market has hindered users from buying them. The Social Welfare Council has also decided to reduce new purchases due to their financial difficulties. The sales were initially expected to reach 70,000 units in 2005 but they think that the figure will only reach 50,000 units. According to JAMA, 2001 sales was 33,784 units, which was up 16.5 percent due to automakers efforts to introduce subcompact types and various improved systems, such as lift-up and rotating seats. However, increasing ratio, especially compact type, was narrowed mainly due to the implementation of new nursery insurance regulations in April 2000. Recently, automakers have adopted user's requests at design stage to satisfy their needs and the government has been supporting automakers standardization of specifications in order to reduce development costs. But further efforts to implement preferential taxation and establish user friendly systems will be needed to expand sales of vehicles for handicapped people. In the next decade, elderly people will account for 20 percent of Japan's population.

June 14, 2002

Nissan develops a new processing method to make transparent steel plates

Nissan has developed a new processing method that can create transparency in steel plates using nano-technology. This is aimed at maintaining view areas of drivers. In order to increase body strength, automakers thicken pillars. However, it narrows view areas which also decreases safety and increases body weight. Nissan has succeeded in creating transparency for steel pieces and plans to apply the technology to larger parts, including pillars, to achieve both high safety levels and weight reduction.

Nissan tries to expand a new brand identity in the US

Nissan started adopting a new brand identity in the US with the Altima introduced last autumn. They have been improving showrooms, including setting up new pole signs and adopting improved customer services at 600 dealers (about half the total number). Nissan has revealed that they plan to increase US sales by 300,000 units by 2004. In order to achieve the sales target, they will soon introduce the Z, Murano, FX45 and Maxima. They also plan to expand the new brand identity in Europe and Asia to achieve a strong image in the global market.

Mazda to introduce a clean version for each model

Mazda plans to expand the number of clean models to improve their image as environmentally friendly company. They are scheduled to introduce at least one version per model that can profit by green preferential taxation. However, their new emphasis on communicating superior driving performance and exciting feeling of their vehicles to customers has made them decide to exclude sports cars from the clean version initiative. They have already adopted a newly developed clean engines (a newly developed 4 cylinder gasoline engine) to the MPV and Atenza. With the new engine, they plan to expand clean lineup that will clear both 2010 fuel economy standards and high emission standards .

Sumitomo Rubber to modify developing system

Sumitomo Rubber plans to reduce mockup production to only one and shorten development time by using Digi-tyre DRS II (Digital Rolling Simulation II), their unique simulation technology. The DRS II, using super computers, can simulate tire performance with detailed environmental conditions, including roads and vehicle specifications. They have already adopted hydroplaning simulation technology for their products with Digi-tyre DRS II. They will expand use of simulation technology to analyze driving comfort and handling operation. By expanding Digi-tyre DRS II, they plan to halve development costs in response to cost reduction requirements from automakers.

New Mercedes Benz E Class launched

DaimlerChrysler Japan announced a full model change to the Mercedes Benz E Class on June 13. They improved safety levels while minimizing additional body weight by increasing application of aluminum and magnesium. They conducted a full model change to the E Class for the first time in seven years. The basic concept of the model is "Sporty and Elegant". They adopted a combination of electronic controlled brake system and 5 speed automatic transmission. Their annual sales target is 9,000 to 10,000 units. Sticker prices are 6,050,000 yen for the E240, 7,100,000 yen for the E320 Avantgarde and 8,700,000 yen for the E500 Advantgarde. Either left or right hand steering is available for all types.

NEC to deliver a metal pressing simulation system to Kikuchi

On the 13th, NEC announced that they delivered a computer system that can simulate metal pressing procedures to Kikuchi, a pressing parts maker. The new system can process data five times shorter than the conventional system (to six hours). It consists of NEC's 32 computer servers (connecting each other in parallel) that operate "J Stamp Works", CEA software for pressing parts forming analysis. Kikuchi plans to use the system to stabilize achieving high quality and reduce costs for car bodies and transmission parts. The system can also analyze strength against collisions.

Nippon Steel and Sumitomo Metal Industries to integrate stainless business

Nippon Steel and Sumitomo Metal Industries announced on the 13th that they have reached a basic agreement to consolidate their stainless business next April. This is part of their plans arising from the comprehensive business tie-up formed this February. By the end of September, they are scheduled to finalize the agreement. In FY2001, Nippon Steel produced 980,000 tons and gained 139 billion yen sales while Sumitomo achieved 280,000 tons and 45 billion yen.

June 13, 2002

Mazda to postpone application of CVT for the Demio

Mazda has decided to cancel application of CVT for the new Demio, which will appear on the Japanese market this summer. They initially planned to adopt the CVT, which would increase fuel efficiency, in order to compete with the Honda Fit. However, they have concluded that adopting the CVT will increase costs and reduce competitiveness. Instead, they plan to concentrate on reducing engine friction to achieve high fuel economy. In the small car market, Nissan has also postponed application of CVTs for the March due to low cost performance.

Tochigi Fuji Sangyo tries to double sales

Tochigi Fuji Sangyo plans to double consolidated sales in FY2005 to 70 billion yen (up 33.4 percent) by strengthening LSD business. They intend to achieve the world top share for LSD systems and the top three for PTU systems. For LSD systems, they plan to strengthen cooperation with GKN group, a leading European parts maker. In FY2001 (starting from April 2001 and ending in March 2002), their consolidated sales reached 36 billion yen (up 5.3 percent). This increase was mainly gained from Nagoya plant (machine processing division), which they bought from Mitsubishi last autumn. In their mid-term plan, LSD sales accounted for 60 percent of their total sales. Their unit sales target for FY2005 is 2.1 million to 2.3 million (currently 1.7 million). Their forecast for LSD demand in the world market is 7.5 million units (currently 6.13 million units). Therefore, their sales share is expected to reach 30 percent (currently 27.6 percent). In the PTU market, their world sales share is 6.9 percent (the six largest) with an annual production of 55,000 units. They expect total global demand will expand to 1.24 million units due to increases of 4WD vehicle demand. They plan to achieve a 20 percent sales share with sales target of 250,000 units. In many cases, Japanese automakers produce PTU units inhouse. The top maker is Fuji Heavy Industries, followed by Toyota and Honda. Tochigi Fuji plans to expand sales to Toyota by improving their Nagoya plant where Toyota has a foothold.

Tire makers to target one-liter cars

Domestic tire makers have started concentrating on one-liter car tire development. They are now shifting their development targets to include both minivans and one-liter cars. Tire makers have greatly profited from minivan repair tires after minivans replaced sedans. According to a person in a tire company, developing tires in accordance with vehicle characteristics will lead to sales expansion. Many minivan users are willing to purchase tires by singling out a specific brand. Current one-liter car popularity, including the Toyota Vitz, Honda Fit and Nissan March, spurred tire makers to focus on compact cars. For the time being, fierce competition between tire makers in both minivan and one-liter car markets is expected to continue.

Showa to expand sales outside Honda

Showa plans to increase EPS sales by 30 percent to over 9.7 billion yen this year. In addition to Honda, their major client, they will aggressively propose their products to other automakers. Their EPS systems have applied for the Honda Civic, Accord and Mobilio, and some are exported to the UK. They regard EPS as the most important next-generation power steering system capable of replacing the hydraulic type. EPS systems are superior in reducing power loss of engines, which helps increase fuel economy and reduce weight.

Volkswagen Japan to strengthen sales network for the Phaeton

In line with the introduction of the Phaeton for the Japanese market in 2003, Volkswagen Japan will establish "Phaeton Concept", sales guidelines for dealers. The Phaeton is their first luxury vehicle and it was revealed at Geneva Motor Show this March. The first model will be equipped with W12 and V6 gasoline engines and V10 diesel engines. Maximum output of the W12 engine model will be 420PS. Combining with twin turbochargers, the V10 diesel model will create the highest torque performance of 77kg/m. Prior to the introduction in Japan, they plan to choose dealers who clear the necessary quality levels in order to meet the new modelÕs luxury image. They also plan to provide special user service at dealerships.

HEV sales slow down

Sales of HEVs in Japan have been showing declines. Sales of the Toyota Estima, the leader in the HEV market, could not reach 1,000 units in April and 500 units in May. The Civic Hybrid is also showing weak sales. On the other hand, Prius sales slightly recovered (565 units in May). The Crown Hybrid achieved the same level at 102 units. Analysts think that low cost performance and weak advertising created sluggish sales.

June 12, 2002

Nissan to adopt Renault's diesel engines for passenger cars

Nissan has announced that they will use diesel engines by Renault for their passenger cars for the European market. This is based on a business tie-up between the two companies. They are scheduled to start applying the engine (1.5 and 1.9 liters) this autumn to the Almera and Primera. The two models are currently equipped with a 2.2 liter inhouse engine. In their joint project, the two companies will share eight engines in 2010 and Nissan has already supplied V6 engine for the Renault Velsatis. Nissan plans to expand application of Renault's diesel engines, including 1.5 liter engines for the next Micra (March) which will be produced at their UK plant.

GM group companies to jointly purchase parts

On the 11th, GM, Fuji Heavy Industries, Isuzu and Suzuki revealed that they will conduct a joint purchase of parts in Asia. The four companies have set up a new system, called "Alliance Purchasing Team (APT)", to purchase parts and components for automobiles and scooters, including glass, generators, speakers, antennas and aluminum wheels. This is aiming at consolidating suppliers in order to reduce costs. They have established WWP (World Wide Purchase), but they have not be able to make good use of the system. Through APT, they plan to buy parts for 2 million vehicles, equivalent to 175 billion yen sales (12 items) by expanding procurement from countries such as China where costs are low. APT, located in Ebisu, Tokyo, consists of five people, including those in charge of purchasing at Asia Pacific division. They plan to start shift to new suppliers after they finish the current contracts.

Toyota to increase production capacity for one liter cars

In line with increasing production of the ist, Toyota plans to modify the current production system for one liter cars. In the first month, sales of the ist reached five times their initial target (4,200 units). The figure is their highest ever since they started announcement of first month sales figures in 1995. The second highest is the Crown introduced in 1995 with 35,000 units. To respond to this, they will strengthen welding facility by adding sub-lines at Takaoka plant. At the same time, they plan to move production of the Vitz and Platz to other lines and body makers. As a result,

monthly production will increase by 5,500 units to 18,500 units in July.

Sales of the ist (picture on the right) reached 42,000 units since its introduction on May 8. Toyota thinks its high cost performance contributed to its high popularity. Thirty percent of the buyers are in their 30s (20% for 20s). Woman buyers account for 40 percent and ex-owners of medium and compact sedans account for 40 percent. Most popular color is silver metallic.

Used import car sales increase in May

According to JAIA, used import car sales in May increased by 4 percent to 48,200 units. The figure increased for the second consecutive month. Mercedes Benz was the top brand with 8,006 units (up 4.5 percent), followed by BMW with 6,182 units (up 1.2 percent) and Volkswagen with 5,876 units (up 7.1 percent). Alpha Romeo, Peugeot and Opel achieved two digit increases and Audi, Chrysler and Jaguar showed increases.

Sumitomo Wiring Systems supplies flat wire harness for the Toyota Aphard

Sumitomo Wiring Systems has developed flat type wire harnesses and started supplying them for the Toyota Alphard, a luxury minivan, as a roof harness. The flat wire harness is 2/3 lighter than the conventional harnesses and its is superior in handling. It is also easy to remove which helps facilitate recycling. Sumitomo Wiring has experience in supplying flat harnesses for doors in small volume. They plan to expand sales of flat wire harnesses for other parts. They are now developing flat harnesses for seats. They are also working on commercialization of engine room flat harnesses, which they have succeeded in achieving heat resistance.

Tokai Rubber Industries to strengthen US R&D system

Tokai Rubber Industries, a leading rubber parts maker, have decided to strengthen R&D system in the US. As of April 1, they made a branch office in Michigan an independent company. They plan to double technological staff to 20 people and add new facilities for final examination and evaluation for anti-vibration products. The new company, TRI Technical Center USA, is a 100 percent subsidiary and they invested about 600 million yen for facilities. In 2003, Tokai is scheduled to supply anti-vibration rubber products to Ford.

HEV sales expected jump in 2003

According to a research by Fuji Keizai, a market research company, HEV sales will jump by 32 percent in FY2003 compared to figures in FY2001. The research was conducted from March to May and respondents include domestic cell makers, material companies and electronic companies related to HEVs and FCEVs. The report said that although automakers are putting great energy on FCEV development, delays in infrastructure establishment will slow spread of FCEVs among private users. In terms of HEVs, government efforts, including implementation of preferential taxation, are expected to help increase sales (up 16 percent to 23,200 units in FY2002 and up 32 percent in FY2003). Ninety five percent of HEVs are equipped with nickel-hydrogen batteries but they expect demand for lithium-ion and zinc batteries will increase due to superior size and cost performance.

June 11, 2002

Honda to introduce two SUVs produced in North America

Honda is scheduled to release two SUVs produced in North America for the Japanese market at the beginning of 2003. This is in response to increased luxury minivan popularity in Japan. The models will be the Acura MDX and Pilot. They will change left to right hand wheel to match Japanese specifications. Both models are equipped with a 3.5 liter V6 VTEC engine. It is produced at Honda of Canada Manufacturing. Honda has been profited from small cars, including the Fit and Stream. In the luxury minivan market, Toyota and Nissan are pulling ahead with the Alphard and Elgrand.

Honda Fit continues to sell well

Monthly sales of the Honda Fit are still at the high level of over 20,000 units. As of the end of May, about 40,000 people are on the waiting list. The Fit was introduced one year ago. Even if they increase monthly production by 5,000 units, it will take eight months to clear up all the waiting orders. In autumn, they are scheduled to introduce a 1.5 liter version and they expect sales will keep the high level after autumn. In May, they increased production to 25,000 units monthly by starting its production on the first line at Suzuka Seisakusho, which also produces the Civic. They also shifted production of the Stepwagon to Sayama plant to increase Fit production. As a result, the Fit captured the top in a monthly sales ranking in May. According to Honda, the variety of seat arrangements the Fit is capable of achieving contributed heavily to its high popularity. For the first time, Honda has adopted a new platform with the fuel tank installed under the front seat.

Used car sales in May decline

On the June 10, JADA announced that registered used car sales slightly fell by 0.3 percent to 446,722 units. Total passenger car sales increased but compact passenger car sales declined for the seventh consecutive month due to lack of trade-ins. Used car sales from January to May declined by 2.4 percent to 2,369,401 units.

Used car sales in May
-	May	Jan-May
Passenger car Standard Compact Total	152,694 (+4.3) 227,167 (-3.5) 379,861 (-0.5)	799,636 (+1.9) 1,245,408 (-5.0) 2,045,044 (-2.4)
Truck Standard Small Total	19,000 (+7.6) 32,903 (-1.5) 51,903 (+1.7)	89,203 (+6.6) 161,343 (-5.1) 250,546 (-1.3)
Bus	1,632 (+14.8)	7,342 (+3.0)
Other	13,326 (-3.9)	66,469 (-7.0)
Total	446,722 (-0.3)	2,369,401 (-2.4)

Mazda develops GPS vehicle analysis system

Mazda has succeeded in analyzing vehicle movement precisely with GPS systems. They have improved the current GPS functions to make it possible to measure complicated vehicle responses to various road conditions with a precision down to millimeters. In the new method, four GPS systems are attached on a car body and analyze up-down and right-left movement. Mazda has started using this method in development of the Atenza (Mazda6).

Hino to produce diesel engines in cooperation with Chinese maker

Hino plans to start manufacturing diesel engines in cooperation with a Chinese engine maker in 2004. In China, demand for diesel engines used in cargo vehicles and industry machines has been increasing and there are many engine manufacturers. Their diesel engines will be 4, 5 and 6 cylinder engines designed for mid-size trucks. They will import parts from Japan and assemble them in China. Japanese automakers have been experiencing difficult time with copied products in China, which hinders sales increases. Hino has decided to start with sales of diesel engines because they are difficult to copy.

Aichi Steel to expand supplies outside Toyota

Aichi Steel has started expanding business outside the Toyota group. They have received orders from Suzuki and GM (US) for crankshafts and started supplies this spring. This is first time for Aichi Steel to supply crankshafts outside Toyota. They also expect they will supply a new crankshaft, developed jointly with Toyota, to Honda in the next two years. The new crankshafts have already been adopted for Toyota's export commercial vehicles. Their major products are crankshafts, connecting rods, differentials and gears mainly delivered to Toyota group companies. At the same time, they have been trying to expand sales by setting up project teams for each automaker. Monthly production for Suzuki is 3,000 units. For GM, they will supply 600,000 units annually for crankshafts designed for V6 and V8 engines.

Nissan Shatai succeeds in cost reduction for the Elgrand

Nissan Shatai is in charge of design and production of the Elgrand introduced last month. The model is expected to play a major role in Nissan's new mid-term plan, NS-130. Nissan Shatai maintained strong body and high tranquillity of the Elgrand while increasing from four to five doors. They have spent 17.25 months for development and canceled mockup production during development stage. They also reduced facility investment by 20 percent for the Elgrand by adopting Flexible Manufacturing System. Total production for the former Elgrand, introduced in May 1997, was 235,000 units. Last year the figure was only 24,600 units but they intend to achieve a 70 percent increase this year. Production target for this month is 6,000 units.

June 7, 2002

Import car sales in May slightly increase

JAIA announced on the 6th that import car sales in May increased by 0.4 percent to 20,541 units. Import cars, excluding those made by Japanese automakers, showed a 1.8 percent increase. On the other hand, import car sales by Japanese automakers sharply declined by 20.8 percent to 959 units. Although sales of the top two brands fell (Volkswagen and Mercedes Benz), Audi, Peugeot, Alpha Romeo, Jaguar and Hyundai achieved large increases. Passenger car sales increased by 2.9 percent to 19,286 units and truck sales dropped by 40.9 percent to 295 units. Volkswagen, the top brand, sold 4,212 units (down 4.5 percent) followed by Mercedes Benz with 3,167 units (down 19.2 percent). BMW, the third largest, achieved a 1.3 percent increase to 2,747 units. Mercedes Benz experienced a severe condition for the second consecutive month. Opel, Chrylser and Ford showed large declines.
(See table for Import Car Sales in May 2002)

Sales Ranking in May 2002
-	Model	Maker	Sales	Vs.May01
1	Fit	Honda	20,378	-
2	Corolla	Toyota	14,954	-10.7
3	March	Nissan	13,888	184.0
4	ist	Toyota	10,035	-
5	Vitz	Toyota	7,871	-30.2
6	Estima	Toyota	7,478	-6.9
7	Noah	Toyota	7,452	-
8	Premio	Toyota	6,331	-
9	Mobilio	Honda	6,310	-
10	Voxy	Toyota	5,752	-
11	Crown	Toyota	5,259	-12.6
12	Allion	Toyota	4,858	-
13	MarkII	Toyota	4,588	-9.8
14	Stream	Honda	4,463	-59.0
15	Stepwagon	Honda	4,434	-51.7
16	MPV	Mazda	4,254	-8.9
17	FanCargo	Toyota	4,053	-23.1
18	Sunny	Nissan	3,907	-5.4
19	Ipsum	Toyota	3,752	-3.1
20	Serena Wagon	Nissan	3,731	0.1

Honda Fit captures the top in May

According to JADA, the Honda Fit (picture on the right) kept the top place for the second consecutive month in a registered passenger car ranking in May. Small cars and minivans dominated the top ten. Six models out of the top 10 are new vehicles introduced in the past year. The Toyota Corolla, the second best seller, showed a large sales decline of 10.7 percent. Sales of the Nissan March leaped up with a 184 percent increase.

Isuzu to develop "Multi-injection" control system

Isuzu plans to develop commonrail multi-injection control systems for diesel vehicles to clear the new long-term exhaust regulations. The new system will maintain precise injection pressure and timing control while achieving downsizing. The new regulations are scheduled to take effect in October 2005. Automakers have been working hard to develop clean, low cost systems. Isuzu has cleared the new short-term exhaust regulations with the Elf, a small truck with a commonrail diesel engine. The engine used in the Elf adopts a second stage clean control in order to achieve noise and Nox reduction. With the new multi-injection engine, they plan to increase to three to four stages to achieve further reductions.

Hino to produce mid-size trucks at Toyota's US plant

On the 6th, Hino announced that they will start production of mid-size trucks at Toyota's North American plant from 2004. By 2010, they plan to achieve unit sales of 30,000 units in North America, equivalent to 110 billion yen. The new model will be a bonnet type truck based on the Ranger Pro, a mid-size truck. They are scheduled to import parts and assemble the final product at a Toyota plant (TABC). In line with this, they plan to expand their dealer network and improve their service system. They currently import and sell cab-over type small and mid-size trucks and annual unit sales are only 2,000.

Sales of the Alphard skyrocket

Toyota announced on June 6 that sales of the Alphard reached 12,000 units in two weeks. The Alphard, a luxury minivan, was introduced on May 22 and their initial monthly sales target was 4,000 units. Main buyers are family users in their 30s and 40s. Sixty percent of buyers are ex-owners of their three-row seat minivans, including Grand Hiace and Granvia. The 4WD model accounts for 30 percent and 1/3 of the buyers chose the highest grade, the MX. The most popular color is white pearl mica (45 percent) followed by silver metallic (25 percent).

Tire makers cancel bias tire production

Tire makers have started canceling production of bias tires for trucks and buses and shifting to radius tires. Bridgestone and Toyo Rubber have already stopped manufacturing those tires. Yokohama Rubber has also announced its cancellation and Sumitomo Rubber is considering it. According to Japan Automobile Tyre Manufacturers Association, 97 percent are radial tires due to their high durability and economy.

June 6, 2002

Honda to speed up minivan HEV development

Honda plans to strengthen their HEV lineup by developing minivan HEVs. They currently have two HEVs, the Insight (a coupe) and a model based on the Civic (a four-door sedan). Although they are one step ahead of other makers in HEV development, their sales have not increased as expected in Japan due to popularity of minivans. Monthly average sales of the Insight hardly reach 100 units and the figure for the Civic Hybrid is about half of their initial target of 500 units. On the other hand, Toyota has made a large mark in the HEV market with the Estima Hybrid. Honda plans to use their current HEV system, IMA, to speed up minivan HEV development and hopes to expand its application to their entire lineup as soon as possible in order to improve their image as environmentally friendly.

Daihatsu uses limonene for PPE roof material

On the 5th, Daihatsu announced that they have developed a new recycling technology using limonene for PPE automobile roofs. Limonene is extracted from orange peel. The development was conducted in cooperation with Sony. This is in accordance with a new recycling law which is scheduled to be implemented in 2004. An automobile roof consists of several materials which make is difficult to separate for recycling. Sony has already started using the technology with limonene for coolite composed of polystyrene. Daihatsu has started using PPE roof material, which also consists of polystyrene, for some models. They plan to adopt the technology for practical use this year.

Mitsubishi to develop low-price AT with motors

Mitsubishi plans to develop a low-price automatic transmission by using motors for small trucks. With the new system, they are scheduled to help expand application of automatic transmissions for trucks. Currently, prices for small trucks equipped with automatic transmissions are about 300,000 yen higher than those with manual transmissions. Their automatic transmissions for small trucks are air controlled which require precise operation. By using motors, they can reduce prices. Automatic transmissions help reduce burden on drivers and as a result can greatly help the increasing number of woman drivers. Mitsubishi plans to focus on automatic transmission application in order to strengthen their uniqueness and increase sales in the grim truck market.

Nissan appeals their lineup at Auto China 2002

Paladin

On the 5th, Nissan announced three models at Auto China 2002 to expand sales in China. The models include the Xtrail, Paladin and Bluebird Flagship. They have introduced the Cefiro, Sunny and Bluebird light interior version for the Chinese market. The Xtrail, imported from Japan, has already been on the market since May this year. The sticker price is 340,000 to 360,000 yuan. The Paladin is equipped with a 2.4 liter and 3.3 liter V6 engine. It is produced at a joint venture, Zhenzhou Nissan Automobile and its annual production will be 12,000 units. The Bluebird is scheduled to be launched in July as a luxury model and produced at AEOLUS, a joint venture between Dongfeng Automotive Works and Taiwan Yueloong. In 2001, they sold 18,500 units for the current Bluebird. They have set the sales target for the current and new Bluebird at 35,000 units.

Clarion and Royal Philips Electronics to jointly develop DSP

Clarion announced on the 5th that they will cooperate with Royal Philips Electronics for digital signal processors (DSP) for car radios. Compared to the conventional analog processors, it can provide higher quality sound. Clarion will take charge of drawing up specifications while Philips will be responsible for IC chip development. DSP can extract signals of music and voice and supply data through amplifier circuits. Clarion has been procuring ASP IC chips from domestic semiconductor makers. They plan to expand IC chips by Philips for their car radio systems, excluding some low-price models. The two companies plan to commercialize the new DSP system and use it in Clarion's high grade car radios by 2004. They plan to use 2 million sets in 2004.

Sixty one parts makers expect two digit increases for ordinary income in FY2002

Parts makers have revealed their FY2002 business plans and total sales of 139 makers expect 1.1 percent decreases. Sumitomo Wiring System, who has been renewing their highest sales figure for three years in a row, expect a slight decline in FY2002. The top maker who forecast the largest sales increase of 59.7 percent is Tokyo Sintered Metals followed by Tochigi Fuji Sangyo with a 33.4 percent increase. Tokyo Sintered Metals is scheduled for merger with Japan Powder Metallurgy in October and Tochigi Fuji expects purchasing the mechanical processing division of Mitsubishi Motors last year will greatly contribute to sales increases. Most companies are forecasting that business restructuring, including mergers and tie-ups, will bring sales increases. Eleven companies showed two-digit increases in FY2001 while eight companies expect two-digit increases in FY2002. Companies who expect ordinary income increases are Tokyo Radiator with a 592.3 percent increase, the largest increase, and 13 other companies also forecast three-digit increases. As a result, a total of 61 companies expect increases in FY2002 (27 companies in FY 2001). However, the number of companies who expect ordinary profit ratio of over 5 percent are only 35. In term of profit per share of stock, Honda group companies dominate the top ranking. This is because many companies in the Honda group have only recently been listed on the stock market.

June 5, 2002

Toyota to expand application of lane monitor systems

Toyota has succeeded in development of low-cost lane monitor systems. A combination of car navigation systems and their high quality image recognition technology made it possible to avoid equipment of special cameras. Instead, they used rear view monitor camera with infrared night vision function. They have started adopting the new system for the Alphard, a luxury minivan, as factory installed equipment. Conventional lane monitor systems requires special camera installed on the rear view mirror, which brings up costs by 200,000 yen. Car navigation system as optional parts alone for the Alphard is 252,000 yen. They plan to expand standardization of the system with car navigation to their lineup.

Honda to export the Stream from Indonesia to AEAN nations

Honda plans to export the Stream produced in Indonesia to other ASEAN nations next year in line with tariff reductions within the area (AFTA). They started production of the Stream in Indonesia in January this year. This is because they expect its sales will increase in Indonesia since the Stream can accommodate more than 5 people. In Indonesia they are scheduled to start operation of a new plant which will have an annual production of 40,000 units. From 2003 Thailand and the Philippines are scheduled to cut tariff to 0-5 percent. Malaysia also plans to join AFTA in 2005.

Nissan to start compact FCEV public road tests in the US this year

Nissan has revealed that they will start public road tests of their C segment model, equipped with a fuel cell system in the US this year. They are targeting 2005 commercialization of the first FCEV. In the tests, they plan to achieve 200 miles per charge (320km). Nissan has been conducting FCEV tests with the Xterra, a North American 4WD vehicle since April 2001. With the Xterra, they have concluded they will soon achieve their target of the maximum speed of 120km/h and traveling distance of over 200km per charge. In the domestic market, Toyota and Honda plan to commercialize FCEVs next year. Nissan had stopped FCEV development due to business deterioration, but they restarted it last year due to the joint project with Renault. In the agreement with Renault for FCEV development, the two companies decided to invest 85 billion yen over a five year period. Nissan also plans to participate domestic tests to be jointly held by the government this year.

Calsonic Kansei tries to get new clients rather than Nissan

Calsonic Kansei plans to expand sales outside Nissan. Sales to Nissan group companies accounted for 62.3 percent in FY2001 and they plan to reduce the figure to 50 percent. Since later 1990s, their sales to other domestic makers, including Honda, Mazda, Isuzu, Mitsubishi and Suzuki have expanded. Their sales to overseas makers have also increased to Renault, GM, Ford, BMW and Peugeot. In FY2001, their air conditioning compressors to BMW reached 4 billion yen. They have recently received orders from GM and Mazda in the US for exhaust parts and they will soon start supplies. They also plan to further expand supplies to Honda in the US. Their sales to Honda reached 10.5 billion yen annually and they plan to triple the figure to 35 billion yen in 2005. Their major parts to Honda will include cockpit modules, front-end modules and air conditioning parts.

Mitsuboshi Belting to expand overseas production

Mitsuboshi Belting plans to shift their belt production overseas from the current 54 percent to 70 percent. This is in response to automakers overseas expansion. In FY2001, they earned 63 percent of total sales from belts. However, their domestic sales declined due to production decreases by automakers in addition to cost reduction measures. To increase cost competitiveness, they plan to increase production in the US, Singapore and Indonesia to speed up delivery. As a result, their domestic production is expected to decrease from the current 40 percent to 30 percent. In FY2002, they plan a facility investment of 3.2 billion yen but they have not revealed details yet.

Suzuki Lapin

Mitsubishi eK wagon

Automakers show good business performance in the subcompact market

In May, subcompact sales reached the highest ever after the implementation of the latest subcompact standards in 1998. The figure was 136,456 units, which is a 3.9 percent year-to-year comparison. The latest standards allow longer and wider bodies. This greatly contributed to quality improvement. The strong sales also resulted from many new model introductions. Mitsubishi put great energy on the introduction of the eK wagon last year and they have succeeded in sales expansion. Suzuki launched the MR wagon last December and the Alto Lapin in January this year. These models largely brought up their sales and total sales of the two models reached 13,000 units in May. Nissan entered the subcompact market this year with the MOCO, based on the MR wagon. Monthly sales of the MOCO were 3,900 units, surpassing sales of Fuji Heavy Industries. Competition between subcompact makers is expected to grow more fierce as they release new subcompacts.

June 4, 2002

Nissan Diesel develops FCEV level hybrid systems

Nissan Diesel has developed an ultra-high efficient hybrid system equivalent to FCEVs. The new system, developed for large CNG buses, achieved driving efficiency twice as much as diesel buses while having the latest clean performance. They used a capacitor and adopted a special combustion cycle system to increase kinetic energy ratio and fuel efficiency. Their new system is a series type hybrid system which starts operation with engine and drives with motors. The newly developed capacitor creates 6W/h of energy. They also used a turbocharger for a Miller cycle CNG engine in order to increase engine heat efficiency to 40 percent. In the next-generation vehicle market, hybrid vehicles are the major candidate, leaving behind FCEVs, because of problems with infrastructure.

Automobile sales in May slightly increase

Overall new car sales in May increased by 0.2 percent to 421,282 units. The figure increased for the first time in nine months. Strong sales of compact cars, including the Honda Fit and Nissan March contributed to the increase. Nissan's entry reactivated the subcompact market. However, cargo vehicle sales shrank (down 25.3 percent for registered cars and down 14.1 percent for subcompacts).

JADA announced on the 3rd that registered car sales in May declined by 1.4 percent to 284,826 units. Although small car sales increased due to introductions of the Toyota ist and Corolla, the Nissan March, and the Honda Fit, sales of trucks and sedans decreased. Honda and Nissan are the only makers showing increases while Mitsubishi experienced a two digit decline (down 33.4 percent) in May. Truck sales, which are heavily affected by economic downturn, showed a large decline of 25.3 percent, the lowest ever.

Registered car sales in May 2002

Maker	May 02	Vs. May 01	Jan-May 02	Vs.01
Daihatsu	946	47.3	7,198	49.4
Subaru	6,625	94.7	46,501	92.7
Hino	1,862	88.3	13,801	96.2
Honda	45,376	123.2	253,361	121.1
Isuzu	3,141	76.3	22,266	85.5
Mazda	16,177	80.8	93,497	80.9
Mitsubishi	8,698	66.6	77,256	70.6
Nissan	54,639	106.6	320,503	96.2
UD	731	70.8	6,523	90.6
Suzuki	3,800	90.2	20,871	84.0
Toyota	122,290	96.4	707,691	93.9
Import	20,541	100.4	110,315	98.2
Total	284,826	98.6	1,679,783	94.9

Japan Mini Vehicles Association revealed on the same day that subcompact sales in May increased by 3.9 percent to 136,456 units. The figure is the third highest ever following 1990 and 1991. Suzuki, Mitsubishi, Honda and Mazda showed increases while Daihatsu and Fuji Heavy Industries showed declines. Nissan, who entered the market in April, achieved a 23 percent increase. The top maker is Suzuki with a 32.3 percent share followed by Daihatsu with 25.8 percent, Honda with 14.4 percent, and Mitsubishi with 12.7 percent.

Subcompact sales in May 2002

Maker	May	Vs.01	Sales share
Maker	May	Vs.01	May	2002
Suzuki	44,047	103.9	32.3	31.5
Daihatsu	35,167	91.3	25.8	27.4
Mitsubishi	17,358	109.2	12.7	14.0
Subaru	11,207	89.2	8.2	7.8
Honda	19,638	109.3	14.4	15.2
Mazda	3,365	104.1	2.5	2.4
Nissan	4,866	-	3.6	1.1
Smart	155	-	0.1	0.2
Other	653	87.3	0.5	0.2
Total	136,456	103.9	100.0	100.0

Hashimoto Forming to expand sales outside the Nissan group

Hashimoto Forming, an automotive exterior maker in the Nissan group, is trying to expand sales to new clients, including Toyota. Their current sales are mainly brought in from Nissan and their group companies but they have started supplying products to Toyota in the US. In response to cost reduction requests from their current clients, they are proceeding with proposing their products, mainly plastic parts, to automakers and parts makers that they have not previously had dealings with.

Owari Precise Products to take over synchronizer ring business from Aisan Industry

Owari Precise Products will take over synchronizer ring business of Aisan Industry. In the Toyota group, Owari Precise Products supplies about 70 percent of synchronizer rings while Aisan produces 30 percent. By concentrating ring products in Owari, they intend to increase production efficiency while reducing costs. Owari will purchase facilities from Aisan at the price of 80 million yen ($645,000, $1=124 yen). In FY2001, monthly production by Owari reached 1.6 million units. After the integration of the business, their monthly figure will reach 2 million units. They expect that they will gain 150 million yen ($1.2 million) in the first half and 1 billion yen ($ 8 million) in FY2002.

Continental Teves to expand development staff for ABS

Continental Teves (CTC), a joint venture between Continental and Nisshinbo, is scheduled to increase development staff from the current 135 to 170 people by the end of 2003. This is in line with Continental's plan to speed up development of their new ABS system, called Mk70, designed for Japanese automakers. CTC currently produces electronically controlled brakes and supplies disc brakes, master cylinders and conventional brakes from Sinei Industry. In the Continental group, CTC will take charge of development of the next generation ABS systems for compact cars.

Honda tries to defeat Toyota and Nissan in the luxury minivan market

Honda plans to enter the luxury minivan market next year. Toyota, Nissan and foreign makers dominate the market. Recently, Toyota and Nissan have been creating a fierce competition with the Alphard and Elgrand. Honda has a popular minivan lineup, including the Stepwagon and Odyssey but they have failed to expand sales of Lagreat imported from their North American plant. They plan to use chassis of the Odyssey for a new luxury minivan in the hope they can shift their current users to the new model. In the Japanese market, they will soon release SUV models, the new CR-V and Pilot (made in the US).

June 3, 2002

Mazda to target woman buyers

Mazda has decided to expand their current sales strategy to include targeting woman buyers in line with the introduction of the next Demio this summer. They have recently started consolidating dealer layouts and customer service at their dealers nationwide in order to strengthen their brand image. They plan to set up a new guideline and adopt it to their dealerships. For the new Demio, they are scheduled to include new ideas for their products and their showroom layouts, which are friendly to woman users. With the new strategy, they intend to bring up woman buyers for the Demio to 60 percent of the total sales (up 15 percent). The new Demio is a sporty type and is designed for family use.

Sales of the Mazda Atenza (Mazda6) surpass their target figure

Mazda announced on May 30 that sales of the new Mazda Atenza (Mazda6) reached 4,000 units in one week, which is 60 percent higher than their initial target. Their main customers are young males in their 20s to early 30s. The new Atenza, a sporty model, is the first new model introduced by Mazda in one and a half years. On May 20 they introduced both sedan and hatchback types. The most popular type is the hatchback equipped with a 2.3 liter gasoline engine (luxury type). Popular body colors are silver for the sedan (accounting for about 50 percent) and yellow for the hatchback type (accounting for 20 percent). On June 24, they are scheduled to launch a wagon type which they hope will account for over 50 percent of overall sales of the Atenza.

Fuji Heavy Industries tries to achieve the highest sales in North America

Fuji Heavy Industries has set sales target at 193,000 units for North America, which is higher than their highest figures marked last year. In 2001, their sales reached 186,000 units due to brisk sales of the Impreza WRX. This year they plan to increase sales of the model by 14 percent to 41,000 units and introduce two new models. They are scheduled to launch the new Forester in June and a Legacy based pickup truck in September. They plan to sell 5,000 and 2,000 units monthly. For the European market, they plan to release the new Forester this autumn to achieve annual sales of 42,000 units (up 5 percent). For the Legacy alone, they hope to achieve a 38 percent sales increase of 11,000 units.

Toyota develops CNG engines for the Century

On May 31, Toyota announced that they have succeeded in developing a CNG engine system designed for the Century. The CNG engine system is developed based on a 5 liter V12 gasoline engine with modified cylinder heads, fuel line systems and other major parts for CNG. They adopted a high performance catalyst to achieve ULEV levels. They also applied a fail-safe system which enables operation on only 6 cylinders during electronic control failure. Sales of the new CNG engine system are expected to start January 2003.

Tochigi Fuji Sangyo and GKN group to reorganize production items

Tochigi Fuji Sangyo and GKN Group have started examining their product lineup and reorganizing development and production systems. This March Nissan sold a stake in Tochigi Fuji to GKN Automotive International. Tochigi Fuji plans to strengthen cooperation with GKN in a wide range from marketing to production. Through the alliance, they plan to cancel products that will overlap between two companies, starting with LSD systems, and shift development and production costs for new products. Tochigi Fuji is expected to take charge of development and production of torque sensing LSD systems. For speed sensing and active control LSD systems, most of them overlap between the two companies and they plan to soon reorganize production items.

Yokowo to set up a US combination antenna development base

Yokowo is thinking about establishing a US development base for a combination antennas, which consist of functions for digital audio broadcasting, AM/FM radio, GPS and telephone. In Japan, most antenna makers jointly develop antennas for on-board communication systems (radio, telematics and car navigation) in conjunction with tier one makers. Yokowo currently has alliances with Denso and Clarion to supply antenna sets to automakers globally. However, automakers in North America and Europe usually directly deal with antenna makers. To respond to demand overseas, Yokowo has decided to set up development facilities in the US. A major candidate for their facility site is the mid-west. The new facilities will have systems to develop mockups and total evaluation. They hope that the new facilities will be their number three mass-production base, following their Malaysia and China plants.

Hirata to export pressing parts from Thailand to Europe

Hirata, a pressing parts maker in the Honda group, will start large-scale exports from their Thailand plant, Hirata Parts Thailand (HPT), to Europe. They will shift production in Japan to Thailand in order to reduce costs. They have already started exports from HPT to Europe for the Honda Accord. HPT has also received orders from GM. They plan to expand production at HPT as their global production base.

New car released in June

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NEW CARS

June, 2002

6/3		-Special versions for the Raum, bB, Fan Cargo, Vitz, Duet and Ipsum by Toyota -Special versions for Move by Daihatsu -Jaguar Japan announced introduction of the S-type with a large scale modification on June 6.
6/4		-Minor changed Elf (clean version) by Isuzu -Minor changed Dutro (small truck) by Hino -Minor changed Alrai7 and Hijet Grancargo by Daihatsu
6/5		-Toyota announced introduction of the CNG Big Thumb (large truck) on June 6.
6/6		-Full model changed Ray by Mitsuoka -Special version for the Swift by Suzuki Mitsuoka Ray
6/8		-Opel Omega wagon sport by GM Japan -Special versions for Jeep Wrangler by DaimlerChrylser Japan
6/10		-Minor changed Opa by Toyota -Sporty type for the Airtrek (with turbocharged engine) by Mitsubishi -Special versions with a low-floor for the Samber special purpose vehicle by Fuji Heavy Industries
6/11		-Minor changed Sparky by Toyota -Special version for the MR wagon by Suzuki
6/12		-Minor changed Delta (small truck) by Daihatsu -Minor changed Atlas20 (cab over small truck) by Nissan
6/13		-All new E Class by DaimlerChrylser Japan
6/17		-Minor changed SmartK by DaimlerChrysler
6/18		-Canter/Canter Guts by Mitsubishi Canter
6/19		-New trim levles for the Peugeot 307 and 406 by Peugeot Japon -Copen by Daihatsu Copen
6/20		-Minor changed WagonR Solio by Suzuki -4WD version for the Atenza sport wagon by Mazda -Lyla E, a clean version, for the Minica Van by Mitsubishi
6/21		-Special limited-run version for the Tribute by Mazda -BMW announced introduction of the Sporty limited-run version for the 5 Series on July 6.
6/24		-Hybrid Condor, a small truck, with a capacitor by Nissan Diesel -Minor changed Premacy by Mazda
6/25		-Special version for the Escudo and Grand Escudo by Suzuki
6/26		-Special version for the Smart Coupe by DaimlerChrysler -Taxi version for the Cedric sedan and Crue by Nissan -Volvo Cars Japan announced introduction of a special version for the V70 series on July 1.
6/27		-Rosa (small bus) with CNG system by Mitsubishi -Chevrolet Corvette by GM Japan through GM AutoWorld