Saturday, July 08, 2006

Deep dive into Denso: technology drives company's growth to top levels of automotive supply chain - Auto Diesel Tech

In 1949 Nippondenso Co. Ltd. was spun off from Toyota Motor Co. Ltd. with a modest capital base of [yen] 15 million, something less than $150,000 at today's exchange rate. In late 2003, the company now known as Denso Corp. projected record sales of $22 billion for its fiscal year ending in March, putting it comfortably among the top five OE automotive suppliers in the world.

Denso's growth very much parallels Toyota's success. In the years from 1988 to 2000, Denso total sales actually doubled. Though separated from Toyota for more than 50 years, very nearly 50% of Denso's sales are still credited to Toyota.

Conversely, however, that means some $11 billion in sales is to other automakers and engine builders of the world, and Denso is certainly out to win more. It consistently wire accolades from its customers. General Motors, for example, has named Denso supplier of the year For 10 consecutive years.

Denso's engine products are its largest product sector, representing 37% of its business, with climate control at 30%, computer-related products at 14%, with information and communication systems, instruments and small motors accounting For die balance. Information Technology Systems (ITS) are expected to be the largest area of growth in years ahead. The use of pre-crash safety systems and adaptive front lighting systems are also evolving rapidly.

Japan accounts for 57% of Denso's sales volume, the Americas for 23%, Europe for 12%, with the balance going to Asia, Oceania and other lands.

Following the 2003 Tokyo Motor Show, we received an extensive tour of Denso's R&D center, several engineering and production facilities, and were able to interview key executives and engineering managers about Denso developments and directions.

Our deep dive into Denso revealed a richly textured organization of 90,000 employees all seemingly moving in the same direction to produce world class quality products at the lowest cost with the least possible environmental impact.

"Denso considers environmental protection in all of its activities," said Koichi Fukaya, president and CEO, "including planning, development design, manufacturing, marketing and services. We are developing technologies that will reduce the environmental burden of vehicles.

"We're also tackling higher fuel efficiency, exhaust gas purification and automotive air conditioning systems that have minimal impact on global warming."


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