Aiming to Be the World's Top Body Parts Manufacturer
In the auto industry we are seeing competition on a global scale that is growing ever more severe, including fierce price competition with suppliers from emerging countries and races to develop next-generation technologies, with companies from other industries entering the market armed with IT.
To overcome these changes in the business environment and continue to grow, the Aisin Group has pursued five organizational restructuring initiatives. Among these is the business integration of Aisin Seiki and Shiroki industry. Taking full advantage of the merits of both companies, we have launched efforts with the goal of becoming the world’s top body parts manufacturer.
- Shiroki Corporation
- ■Established: March 1946
- ■Capital: 7,460 million yen
- ■Sales: 135.18 billion yen (consolidated)
- ■Employees: 5,240 (consolidated)
- ■Business description: Shiroki develops, manufactures and sells worldwide a variety of interior and exterior components for automobiles and seats for train cars, with a growing manufacturing and supply network in North America, China, Thailand, Indonesida and elsewhere.
(As of March 31, 2016)
Background and Purpose of Business IntegrationTo succeed amid increasingly intense global competition
On April 1, 2016, Aisin Seiki (hereinafter referred to as “Aisin”) and Shiroki Corporation (hereinafter referred to as “Shiroki”) merged our business operations.
First, I’d like to talk a bit about the background behind this merger. In the auto industry today, competition is getting more intense in every region of the world, with M&As leading to existence of mega-suppliers and the rise of new suppliers of emerging countries and so forth. In the auto body parts sector, as well, Aisin has thus far managed to compete successfully with various Western manufacturers. In recent years, however, manufacturers have appeared that use low cost as a secret weapon and to which we are losing out more often. If we are losing to mega-suppliers in Europe and the US and to manufacturers with low-cost advantages in emerging countries, there is no way we can win the fight. So, the starting point for this business integration is the need to work with our former rival Shiroki and create a new framework for effective competition all over the world.
In this field, three-way races like that among Aisin, Shiroki and a competitor are not unusual, and both of our companies have a track record of competing against numerous manufacturers and winning.
Our joining forces with Shiroki are aimed at aggregating our mutual resources and strengths and building a competitive edge that can stand up to changes in the business environment. Currently, Aisin and Shiroki make many similar parts. Among these are exterior and functional parts that need to be very cost-competitive, such as door frames, window regulators, and molding, and we intend basically to consolidate their development and production in Shiroki, which we believe will make us more competitive worldwide.
Meanwhile, Aisin will further concentrate our efforts on the development and production of our current system and module products such as power sliding doors and sunroofs and further enhance our competitiveness. However, considering Shiroki’s significant strengths, we intend to pursue product development jointly in the future while dividing up duties strategically.
Shiroki’s position regarding this business integration has relates to technological competition and the increasing difficulty of achieving both weight reduction and safety for various parts that are in increasing demand. At the same time Shiroki needs to grow further in the global market, but we face the reality of insufficient capacity to accelerate overseas development. Even in terms cost competitiveness, where we are supposed to be strong, there are an increasing number of cases where we lose out to growing manufacturers in emerging countries, and we are becoming unable to win even on their home turf. We may find ourselves ceding this home turf altogether in the future. A sense of crisis led us to the decision to team up with Aisin.