Furukawa Electric to Launch New Auto-parts Plants in Brazil, India, China

Furukawa Electric plants to build automotive parts plants in developing countries including Brazil, India and China in 3 years. The firm started preparation to establish majority holding joint parts making company in Brazil. The firm studies for Indian second plant with joint venture partner of Minda Group of India. The firm increased the interest to 50% in ChongQing Chang Hua Automobile Harness in China while the firm studies for new plant around Wuhan in 3 years.

The firm tries to follow growing demand in South America through new plant in Brazil. The firm tries to control majority of the joint venture under the strategy to control majority in any auto-parts production sites in the world.

The firm controls 51% of Indian joint venture in Haryana state, India, in which Minda Group has 49% share, and started the wiring harness supply in 2008 to Maruti Suzuki and local transplants of Japanese automakers. Furukawa Electric tries to expand the joint venture’s annual sales to 1.5 times in 3 years through the second plant launching while the sales is expected to be around 3 billion yen for 2009.

The firm announced the plan to control majority of ChongQing Chang Hua Automobile Harness and to build new plant in Wuhan in June. The firm continues the study but now expects the majority control is earlier than the new plant in Wuhan and the both plans will be realized in 3 years. Furukawa Electric has 5 auto-parts plants in China with 25 billion yen of sales in 2008 and tries to expand the sales to 32-35 billion yen in 2013.

The firm’s electronics and automotive systems unit posted 223.8 billion yen of sales in the year to March 2009, in which auto-parts represented around half excluding battery and rolled copper products. The wiring harness sales represents around 60-70% of the auto-parts sales with the balance for steering roll connector and other parts.