AISIN GROUP
AISIN VIEW

President Interview

President Interview

Seeking Synergies for a Top Position in the Global Market

To achieve the functions and performance sought from motor vehicles today, such as lighter weight, cleaner exhaust gas, and lower fuel consumption, requires developing technologies from a comprehensive perspective as well as individual parts. And in order to dominate the market as the world's top brand, there are many issues to be dealt with such as business scale, development and production bases, and human resources. Rather than each company resolving these issues alone, even rivals will prefer to join forces if synergies can be reliably expected. This dynamic idea led to the business integration of Aisin Seiki and Art Metal Mfg., which recently celebrated 100 years as a specialized manufacturer of pistons.

Art Metal Mfg. Co., Ltd.
Art Metal Mfg. Co., Ltd.
■Established: December 1945 (founded 1917)
■Capital: 2,397 million yen
■Sales: 24,441 million yen
■Employees: 917
■Business description: Manufacture of pistons and piston pins for various kinds of internal combustion engines

(As of March 31, 2017)

High Technology and Reliable Quality.
A Company That Meets Every Requirement.

What was your impression of one another?

Ihara:

On April 1, 2017, Aisin Seiki (hereinafter referred to as “Aisin”) and Art Metal Mfg. (hereinafter referred to as “Art”) merged and took a new step into the future. In connection with this business integration, I visited not only Art’s head office but also their subsidiaries and overseas locations in Thailand and Indonesia, and saw for myself the strengths of this excellent manufacturer. A few years ago, an Indian company held a piston competition and I had an opportunity to see Art’s submission to it, but when I saw their development and production sites, I understood clearly why its design and casting quality was so outstanding. In addition, I realized anew that this is a company that makes good use of assets while making great products. I saw this, for example, in Thailand, where they used very old equipment effectively and improved cost competitiveness. In addition, they produce pistons not only for gasoline engines but also for diesel and motorcycles, and I am impressed with their strengths in various areas of small-volume production.

Ishihara:

The strongest impression I have of Aisin is that the entire Group pursues quality first. I also see strong motivation to take on challenges, not only in creating new products but also in generating new technologies, such as construction of a heat management system. Even narrowing the focus to pistons, they are constantly studying highly advanced processing technologies such as high-speed processing, and I think there is much that Art can learn from Aisin.

President Ihara(Aisin Seiki Co., Ltd.)

Leveraging the Strengths of Both Companies

What is the goal of the merger?

Ihara:

It was Aisin that proposed the business integration, but the driving force behind it is the need to boost competitiveness. In specific terms, first of all there’s the issue of scale of production. The global market is currently about 220 billion yen*, of which the top-share company accounts for about 58 billion yen*. Even if Aisin and Art are combined, our share amounts to about 38 billion yen, so we are still not leading the global market. (*Survey by Aisin)
The second issue is the products we make. Aisin produces a wide variety of products, but pistons make up only a tiny percentage of our output, and these are only for Toyota gasoline engines. Meanwhile, Art makes all kinds of pistons for gasoline, diesel, motorcycle engines and so forth, but they do not deal with peripheral parts such as main engine connecting rods, water pumps and oil pumps. Looking at the global market, it is vital that we deal with this state of affairs, as other companies have been merging and so forth to develop and manufacture not only pistons but all manner of products for combustion engines.
The third motivation to strengthen global expansion. The world’s leading manufacturers have production sites all over the world. However, Aisin’s are only in Japan and the United States, while Art’s are only in Thailand, Indonesia and China. Under current circumstances we are missing Europe entirely, and we cannot cover the entire world. This stands as a major challenge for the future.
And a fourth reason for integration is the need to improve our development framework. Currently, Art has about 70 personnel engaged in development, in cooperation with Toyota, and Aisin has about 15, meaning the two companies combined have about 85. However, the world’s top manufacturers have 150 to 200 people in their development departments. From the standpoint of product and technology development, we are concerned that this gap will lead to big disparities in the future.
So, as I have been saying, when we look at scale, product range, global expansion, and resources in our development framework, neither of us can truly compete in the global marketplace alone. This is why I believed it was necessary for Aisin and Art to come together.