Aisin Seiki Co., Toyota Motor Corp. (7203)’s second-largest supplier, said it clinched its first order from India and is in talks with Chinese carmakers as the company seeks to cut its reliance on one customer.
The company won an order to supply engine parts to India’s Mahindra & Mahindra Ltd. (MM), Aisin President Fumio Fujimori, 64, said last week in an interview at the company’s headquarters in Kariya, Japan. He declined to give more details on customers.
For Aisin, which gets most of its revenue from Toyota, the orders are part of plans for the company to double sales to other carmakers in the decade to 2020, Fujimori said. That means the company may step up its pursuit of customers outside of Japan, in markets ranging from China to Brazil.
“We have been very proactive in exploring emerging market opportunities in the past year,” Fujimori said. “Chinese and Indian carmakers will be our new clients, while we will also strive to win more contracts from Japanese and European makers in markets such as Brazil.”
The company, the world’s biggest maker of auto transmissions, plans to increase total sales 46 percent to 3.3 trillion yen in its 10-year projection. It is targeting to generate more than half of its sales from overseas by 2020, compared with 30 percent a decade earlier, as its home market faces deflation and a shrinking population.
In China, the company will start local production of auto transmissions in Suzhou this year, with an annual capacity of 200,000 units. Another 400,000-unit plant in Tianjin will start operation in 2014, the company has said. Aisin also produces transmissions in the U.S.
On the yen, which fell to as low as 89.35 last week -- its lowest level against the dollar in more than two years -- Fujimori said the “appropriate” value of the currency should be at 90 to 100.
“The yen is moving toward the right direction,” he said. “Our determination to expand overseas will not be swayed by the weakening of the currency.”
The company may pursue mergers and acquisitions as a means to aid its expansion, Fujimori said.
“We have been doing everything all by ourselves in the past,” he said. “As we targets overseas growth, we realized it’s impossible to invest all on our own. A more efficient way is to find a partner that has something we need in the local market.”
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