Vehicle electrification forces Japanese auto parts-makers to shift industries

More Japanese auto parts makers are making use of their technology to explore new business opportunities in other sectors as demand for traditional components is likely to decline with the increased electrification of vehicles.

The electrification of vehicles will bring down the number of components from some 30,000 for gasoline-powered cars to less than 20,000 as electric cars don’t require engines with a complex structure, such as spark plugs, pistons, and exhaust gas treatment equipment.

Tokai Rika Co., which supplies parts to Toyota Motor Corp., came up with the idea of using the magnesium alloy, which is lighter and stronger than aluminum, to develop items used in outdoor activities, such as pots and tent stakes, as they are growing in popularity amid the pandemic.

The firm, which its high-quality metal processing technology to manufacture the steering wheels and brake pedals, also exhibited game controllers it produced on an experimental basis using sensor technology from its flagship switches at the Mechanical Components & Materials Technology Expo at Portmesse Nagoya in early April.

Tokai Rika President Hiroyoshi Ninoyu said the company is aiming to find out where the strength of our technology lies and how it can be utilized.

The firm set up a new marketing department in January to work win contracts in non-auto parts areas.

Iida Industry Co., which uses high-level technology and facilities to measure and evaluate sound insulation levels inside luxury cars, made use of its know-how in auto parts production to venture into construction materials.

The firm’s annual sales of construction materials of ¥400 million to ¥500 million are less than 10 percent of its sales of vehicle materials, but it is aiming to double sales to ¥1 billion in a couple of years.

The firm saw an increased demand for soundproofing with more people stay home amid the pandemic.

Another company, an engine component manufacturer, revealed it had considered doing business in the medical equipment sector, but gave up due to the smaller production volume than that for auto parts and unstable volume of shipments, making it difficult to maintain efficient operations.