Thailand becomes global hub for Denso

With its latest investment in building a new climatic wind tunnel in Thailand, Japanese automotive component giant Denso has made Thailand one of its global strongholds. 

Denso has been present in Thailand since 1972, and now has eight companies in Thailand. Six of them are involved in manufacturing while the other two are distribution and sales firms. It employs a staff of 7,500 in Thailand, and earnings reached Bt64 billion last year. 

This tells us how important the Thai and Asean automotive industries are to global automotive companies, especially with Thailand’s goal of producing 3 million vehicles by 2017. 

Denso Corporation’s headquarters is located in Kariya, Aichi prefecture, Japan, and the company has 120,000 employees in 32 countries. 

Denso’s Thai operations is growing in importance: in 2007 Denso International Asia headquarters was set up here with an initial investment of Bt700 million, along with a technical centre for product planning and training of Denso affiliates in the Asia-Oceania region. This has raised the investment value to Bt1 billion in this area. 

 

PREPARING FOR AEC 

This is another important year for Denso in Thailand as it enters its 41st year. Denso International Asia president and CEO Shigehiro Nichimura said Denso Corporation is confident in the Asean economy. 

According to Nichimura, Denso is interested in investing in this region on a continuous basis to cater to the rising demand and growth in markets such as Thailand, Myanmar and Indonesia. He said Thailand would serve as the centre for automotive component production in the Asia-Oceania region. 

Denso is swiftly expanding investment across Asia with the parent company designating this region as a key market. It is also considered a global auto industry leader, and the technical centre will help support the Asian automotive industry. 

Nichimura said Denso is investing as much as Bt4 billion in Thailand this year to expand production at factories located in the Wellgrow Industrial Estate in Chachoengsao and Amata Nakorn Industrial Estate in Chon Buri. This is to prepare for the relocation of production from Japan to Thailand for components such as fuel injectors, common-rail systems as well as future injection systems to cater to the Thai and Asean markets. Denso aims to work closely with auto-makers that have R&D operations in this region. 

“We concentrate on doing business in Asia, where there is high potential and growth for the automobile industry. We are expanding our business in Indonesia, India and especially Thailand, which will be our main production hub,” he revealed. 

Nichimura said Denso will expand factories here and build new ones, in a move to relocate production hubs for certain components from Japan to Asia, and to cater to the increasing demand for auto components. 

 

HIGH-TECH WIND TUNNEL 

Due to Denso’s policy in designating Asia as an important market and a world leader in the automotive industry, it has speeded up investments and R&D activities here, allowing it to work more closely and swiftly with clients. 

Nichimura said Denso had recently spent Bt200 million to construct a new climatic wind tunnel facility that is the most advanced in Southeast Asia. 

The facility has been designed to carry out air-conditioner performance testing by simulating various wind and temperature conditions (50 degrees C to -30C). The technology is considered the most advanced in the region and can be used to test vehicles from all over the world. This innovation will elevate the production standard and quality of automotive parts produced by Thai Denso Group. 

“Denso Thailand’s future goal is to serve as a high-tech parts production centre replacing Japan. The Thai operation is considered a very large one outside Japan and the Denso Group attaches great importance to it,” he said. “In the future, Thailand will have the potential to build its own machinery, and the parent company will shift roles towards mainly R&D.” 

In addition, Denso is preparing for the Asean Economic Community (AEC) and has a long-term plan (3-5 years). It is planning further investments in Asean countries such as Indonesia, Myanmar and Cambodia, and aims to build factories to support domestic sales and lower production costs. Simultaneously, it will also carry out OEM operations in Myanmar and Cambodia. 

“In the future, our climatic wind tunnel lab will enhance its capacity to offer engine performance testing services and vehicle exhaust emission testing with the aim to promote road safety and environmental conservation,” said Toshihide Hayashi, vice president of the regional R&D divison at Denso International Asia. 

“The lab will serve a bigger and wider range of needs in the near future. The launch of our climatic wind tunnel is part of our mission to drive Thailand forward as a world-class automotive parts production base and to prepare for the upcoming AEC in 2015. We expect the automobile industry in the region to grow significantly, so we have adjusted our strategies accordingly. We are elevating our standards in products and services, and equipping our staff with more knowledge,” he added.