Denso China seeks more non-Japanese customers

BEIJING -- Denso Corp.'s clients in China are predominantly Japanese automakers and their affiliates, but the company wants to attract more business from non-Japanese clients including Chinese carmakers in the coming few years.

In China, Denso currently sells about 70 percent of its products to Toyota Motor Co.'s joint ventures, and another 15 percent to the joint ventures of other Japanese automakers such as Honda Motor Co and Suzuki Motor Co.

"Globally we now sell about 50 percent of our products to Toyota. In the long term, we hope to see that the percentage of our sales to Toyota in China will be about the same, "says Ito Yoshihiko, vice president of Denso China.

"While keeping our supplies to Japanese automakers, we want to expand our businesses with U.S., European and Chinese domestic automakers as well," Ito adds.

Ito says Denso's non-Japanese customers in China include General Motors, Volkswagen AG, Ford Motor Co., Daimler AG and Hyundai Motor Co.

Denso China President Noboru Yamada says Chinese automakers are growing very fast and Denso is looking to establish close business ties with them.

But its supply to Chinese automakers will likely be limited to non-high-tech products such as air conditioning parts, compressors, alternators and starters.

Yamada says advanced products like electronic control units and fuel injection systems need to be jointly developed by suppliers and automakers at an early stage, but Chinese companies don't have the experience in this aspect.

"A precondition of working with Chinese domestic companies is that we can protect the technologies Denso has jointly developed with its Japanese, U.S. and European partners," Yamada says.

Yamada adds Denso will not supply its hybrid products like engine and battery control units to Chinese automakers because those products are the results of its joint development with Toyota.

Yamada says Denso China has supplied some parts, such as air conditioning components, to China FAW Group Corp., and it will strive to expand its businesses with FAW and Guangzhou Automobile Industry Group in the future.

Yamada also says in 2008 that Denso targets to achieve China sales of 12.5 billion yuan ($1.8 billion), which will account for about 5 percent of its global sales this year. He adds that Denso's annual sales in China will likely surpass its sales in the United States in the next 10 to 15 years. The company's sales in the U.S. market were around $55 billion yuan ($7.9 billion) in the fiscal year ended March 2008.

Denso has 24 subsidiaries and affiliates in China. Their products include diesel common rail systems, vehicle air conditioners, compressors, alternators, starters, navigation systems and fuel injection systems.