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					THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY

                          JAPAN
                           Fact Pack




                Swedish Trade Council in Japan
                            2006



                              1
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

             Japanese Construction Equipment Industry

             Recommendations

             References

             Executive Summary




                           2
                THE MANUFACTURING INDUSTRY IN JAPAN IS 13 TIMES AS
                LARGE AS THE SWEDISH MANUFACTURING INDUSTRY
                - automobile manufacturing is a core industry in Japan
                              5 largest manufacturing industries in Japan                     •   The total turnover of the Japanese manufacturing
                                                                                                  industry is SEK 17,800 billion
                 Electric Machinery &                                                                − the Swedish manufacturing industry’s turnover
                      Equipment                                                                        is SEK 1,357 billion

                             Automotive
                                                                                              •   There are approximately 500,000 factories within
                                                                                                  the manufacturing industry in Japan
                  General Machinery                                                                 − 8.6 million employees



                              Chemicals                                                       •   Automobile manufacturing is a core industry in
                                                                                                  Japan and imports and exports are both increasing

                             Iron & Steel
                                                                                              •   The average wage for a industry worker in Japan is
                                                                                                  SEK 160 per hour
                                              0            1000   2000   3000        4000
                                                                                Billion SEK

                                     The automotive industry amount 16% of the total manufacturing industry
                                                                                         3
Source: Japan Automobile Manufacturers Association, Inc.
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

                  Passenger cars and Motorcycles

                  Commercial vehicles

                  Construction Equipment


             Japanese Construction Equipment Industry

             Recommendations

             References

                           4
                THE JAPANESE PRODUCTION OF CARS AND COMMERCIAL
                VEHICLES TOTALS SEK 2,863 BILLION
                - the industry is steadily growing
                  billion SEK                              Production cars and commercial vehicles industry in Japan
                2900


                2800

                2700                                                                              Automobiles
                                                                                                                    Automotive parts
                                                                                                   (including
                                                                                                                       and accessories
                2600                                                                              motorcycles)
                                                                                                                    SEK 1,330 billion
                                                                                                SEK 1,399 billion
                2500


                2400

                2300
                                                                                                                         Auto bodies and trailers
                            1999        2000        2001      2002     2003   2004
                                               Domestic       Export                                                         SEK 133 billion


                                                                  Growth due to higher export demand
                                                                                       5
Source: Japan Automobile Manufacturers Association, Inc.
                12.6 MILLION VEHICLES ARE PRODUCED IN JAPAN
                - 9.0 million passenger cars and almost 1.8 million commercial vehicles

                                                                     VEHICLE MANUFACTURERS


                     COMMERCIAL VEHICLES (1,782,924 vehicles)



           LIGHT TRUCKS                         HEAVY TRUCKS                     BUSSES                 PASSENGER CARS                 Motorcycle
          (982,948 vehicles)                   (723,663 vehicles)            (76,313 vehicles)          (9,016,735 vehicles)       (1,791,585 vehicles)
         (Max truckload < 4.0 t )
           8 manufacturers                     6 manufacturers             5 manufacturers             8 manufacturers          4 manufacturers
                   HINO                              HINO                        HINO                        TOYOTA                    HONDA
                   NISSAN DIESEL                     NISSAN DIESEL               NISSAN DIESEL               NISSAN                    YAMAHA MOTOR
                   MITSUBISHI                        MITSUBISHI                  MITSUBISHI                  HONDA                     SUZUKI
                    FUSO                               FUSO                         FUSO                        SUBARU                    KAWASAKI
                   TOYOTA                            TOYOTA                      TOYOTA                      MITSUBISHI                 MOTORS
                   SUBARU                            MAZDA                       ISUZU                           MORTORS
                   MAZDA                             ISUZU                                                    MAZDA
                   ISUZU                       Trailer manufacturers                                          DAIHATSU
                                                      HINO                                                     SUZUKI
                                                      NISSAN DIESEL
                                                      ISUZU                            6
Source: The Motor Industry of JAPAN 2006
          ALL PURCHASE DECISIONS ARE MADE IN JAPAN
             Manufacturer                   Employees                   Business                             Purchase decisions
             TOYOTA                           65,798 (Group: 285,977)   Passenger cars, Heavy/Light truck,   HQ, Aichi, Japan
                                                                        Bus
             NISSAN                           33,025 (Group: 182,273)   Passenger cars                       HQ, Tokyo, Japan

             HONDA                            26,624 (Group: 144,786)   Passenger cars, Motorcycle           HQ, Tokyo, Japan
             SUBARU                            14,189 (Group: 27,296)   Passenger cars, Light truck          HQ, Tokyo, Japan
             MITSUBISHI MOTORS                 12,126 (Group: 35,655)   Passenger cars                       HQ, Tokyo, Japan
             MAZDA                                            19,893    Passenger cars                       HQ, Tokyo, Japan
             DAIHATSU                                         10,725    Passenger cars                       HQ, Osaka, Japan
             SUZUKI                            10,972 (Group: 40,798)   Passenger cars, Motorcycle           HQ, Shizuoka, Japan
             YAMAHA MOTOR                                       8,099   Motorcycle                           HQ, Shizuoka, Japan
             KAWASAKI MOTORS                                     220    Motorcycle, Jet ski                  HQ, Hyogo, Japan
             HINO MOTORS                                        9,030   Heavy/Light truck, Bus               HQ, Tokyo, Japan
             NISSAN DIESEL                                      2,918   Heavy/Light truck, Bus               HQ, Saitama, Japan
             Mitsubishi Fuso Tuck and Bus               16,000(Group)   Heavy/Light truck, Bus               HQ, Tokyo, Japan
             ISUZU                               7,371(Group: 22,536)   Heavy/Light truck, Bus               HQ, Tokyo, Japan


                                                                    7
Source: HP of each maker
TOYOTA PRODUCES THE LARGEST NUMBER OF CARS IN JAPAN
       Manufacturer                 Plant                             Models and focus                              Volume per plant
TOYOTA                    Honsya            Land Cruiser, etc                                                                   134,000
                          Motomachi         Crown, Brevis, Progres, Mark II, Mark X                                              78,000
                          Takaoka           Corolla, Allex, ist, Vitz, Platz, Sienta, Porte, Ractis                             60,1000
                          Tsutsumi          Prius., Premio, Allion, Camri, Cardina, Wish, SCION tC                              438,000
                          Tahara            Celsior, RAV4, GS, IS, Land Cruiser Prado, 4Runner                                  517,000
(Outsourcing)
Toyota Motor Kyusyu       Kyusyu            Harrier, Kluger, IS                                                                 287,000
Toyota Auto Body          Inabe
                          Fujimatsu          Hiace, Voxy, Noah, Estima, Prius, Land Cruiser                                     664,000
                          Yoshihara
Kanto Auto Works          Iwate              Century, Crown, Soarer, Celica, Corolla                                            432,000
                          Higashi-fuji
Central Motor             Honsya            WiLL CYPHA, Raum, Allex, Corolla, Runx                                              121,227
Gifu Auto Body Industry   NA                Hiace                                                                                    NA
Toyota Industries         Nagakusa          Vitz, RAV4                                                                          297,462
DAIHATSU                  Ikeda
                          Kyoto              Cami, Passo, Probox, Succeed                                                       194,636
DAIHATSU Auto Body        Oita
NISSAN                    Oppama            Tiida, Note, March, Bluebird Sylphy, Cube                                           334,000
                          Tochigi           President, Cima, Fairlady Z, Skyline                                                192,000
                          Kyusyu            Murano, Presage, X-Trail                                                            424,000
(Outsourcing)
NISSAN SYATAI             Shonan                                                                                                382,000
HONDA                     Saitama           Accord, Inspire, Accord Wagon, Legend, Elysion, Odyssey                             522,215
                          Suzuka            Civic, Stream, Integra, Partner, Fit, Mobilio, S2000, Insight                       531,876
(Outsourcing)
Yachiyo Industry          Yotsukaichi       Light car                                                                           207,903

                                                                                                            (Data: April, 2005 – March,2006)
                                                                  8
TOYOTA PRODUCES THE LARGEST NUMBER OF CARS IN JAPAN
     Manufacturer            Plant                               Models and focus                Volume per plant
SUBARU               Gunma Main      R1, R2, PLEO, SAMBAR                                                     60,448
                     Yajima          Legacy, Impreza, Forester                                               330,755
MITSUBISHI MOTORS    Okazaki         COLT, GRANDIS, PAJERO IO                                                 74,827
                     Mizushima       Outlander, i, eK Wagon, Lancer, Lancer Wagon                            524,392
MAZDA                Head Office     DEMIO, VERISA, ROADSTER, RX-8, MPV, BONGO VAN                           380,000
                     Hofu            AXELA, ATENZA, TRIBUTE, ESCAPE                                          480,000
DAIHATSU             Head (Ikeda)    Mira, Move, Copen, Boon                                                 126,731
                     Kyoto           Esse, Mira, Terios Kid                                                  106,907
                     Shiga (Ryuo)    Move, Tanto                                                             240,000
(Outsourcing)
DAIHATSU Auto Body   Oita            Atrai Wagon, Be-go                                                      171,726
SUZUKI               Iwata           Carry, EVERY, Jimny, ESCUDO, GRAND ESCUDO                             1,133,004
                     Kosai           Wagon R, MR Wagon, Alto, CHEVROLET CRUZE

                                                                                     (Data: April, 2005 – March,2006)




                                                          9
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

                  Passenger cars, Motorcycles

                  Commercial vehicles

                  Construction Equipment


             Japanese Construction Equipment Industry

             Recommendations

             References

                             10
THE PASSENGER CAR PRODUCTION IN JAPAN SLIGHTLY INCREASES
- Export demand covers the slight drop of domestic sales
       Passenger Car Production in Japan                     Development in the last 5 years

     Vehicles
                                                       Stagnant domestic sales but booming overseas
10000000
                                                        production
 9000000                                                    Economy and industry have recovered from the
 8000000                                                     long slump but the personal buying intention is
                                                             still dull.
 7000000                                                    Abnormal increase of raw materials (steel and
 6000000                                                     other metals) pushed up the end user prices.
                                                            Mini-cars (with < 700 cc engine displacement)
 5000000
                                                             increases 2.6%, but normal passenger cars
 4000000                                                     showed 0.4% drop in 2005.
 3000000                                                    Passenger car export showed average 2%
                                                             increase over 2002-5 and is expected to continue
 2000000                                                    Japanese overseas production is booming,
 1000000                                                     shows an increase of about 1 million cars during
                                                             the 5 years
       0                                                    Product development is all done in Japan
            2001   2002   2003   2004   2005

                                               11
THERE ARE 33 MANUFACTURING PLANTS FOR PASSEGER CARS IN JAPAN




          • Honsya
          • Motomachi                         • Okazaki
          • Takaoka
          • Tsutsumi                                      • Kosai
          • Tahara
          • Toyota Auto Body                                                                 • Gunma Main                       TOYOTA
            (Yoshihara, Fujimatsu)                                                           • Yajima
                                                                                                                                NISSAN
                                                                    • Toyota Auto Body                                          HONDA
             • Head Office
             • Hofu                   • Mizushima                                                                               MITSUBISHI
                                                                                                                    • Tochigi   MAZDA
 Toyota Motor Kyusyu                                                                                                • Saitama   SUBARU
                                                                                                                                DAIHATSU

         • Kyusyu                                                                                            • Oppama           SUZUKI
                                                                                                             • Shonan
                                                    • Ikeda                  • Suzuka
                                                    • Kyoto                  • Yotsukaichi         • Iwata
                                     • Oita
                                                    • Ryuo
                                                                        12
             4 MAKERS MANUFACTURE TWO-WHEELED MOTOR VEHICLE
             AT 5 PLANTS IN JAPAN

                               Manufacturer                    Plant          Volume per
                                                                                 plant
              KAWASAKI MOTORS                              Akashi                        245,117

              SUZUKI                                       Toyokawa                      604,952

              HONDA                                        Hamamatsu                     219,988
                                                           Kumamoto                      370,263
              YAMAHA MOTOR                                 Iwata daiichi                 470,000

             (Data: April, 2005 – March,2006)
                                                                       • Toyokawa
                       • Kumamoto               • Akashi




                                                                • Hamamatsu                        • Iwata daiichi


                                                                                    13
Source: Interview
             PRODUCTION GROWING IN OVERSEAS, EDGING UP IN DOMESTIC
             - Increasing export and overseas production by Japanese OEMs
                                         Trends within the Japanese passenger car industry

                                       Domestic sales is stagnant while overseas sales is booming
                                           Mini-car sales increases while normal export passenger car sales drops in 2005
                       Market              Domestic production edges up thanks to the increase of export
                                           Increasing export covers the lack of overseas production volume and support
                                             the increase of overseas sales

                                       Car production increases in North America, EU and BRICs (Brazil, Russia, India and China)
                                           Offers appropriate design, performance in competitive price
                    Globalization          Meeting the condition and requirement of local market
                                       Import of foreign made passenger car is decreasing in Japan



                        R&D            More R&D is being carried out by both OEMs and parts suppliers in energy saving,
                       trend            environment and IT utilization technologies

                                                                      14
Source: STC Tokyo
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

                  Passenger cars and Motor cycles

                  Commercial Vehicles

                  Suppliers

             Japanese Construction Equipment Industry

             Recommendations

             References



                               15
COMMERCIAL VEHICLE PRODUCTION IS SLIGHTLY DECREASING
- Special demand for vehicles meeting the emission regulation in
major cities has been fading out
    Commercial Vehicle Production in Japan                                       Status in the last 5 years

          Vehicles
                                                                       Commercial vehicle production showed continuous
2000000                                                                 drops since 1997 due to economical and industrial
1800000                                                                 slump caused by the burst of the bubble economy
                                                                       Commercial vehicle industry once showed an increase
1600000                                                                 in 2003 but is gradually dropping again
1400000                                                                     In 2003, Tokyo metropolitan government enforced a strict
                                                                             regulation to ban an entry of commercial vehicles into
1200000                                                                      urban area, that exceeds certain amount of particles in
1000000                                                                      emission gas. This regulation created a special demand
                                                                             in big cities all over Japan for new commercial vehicles
 800000                                                                      meeting the regulation. But the demand is calming down
                                                                             now
 600000
                                                                            Japanese commercial vehicle industry has traditional
 400000                                                                      unbalance between the number of OEMs and domestic
                                                                             demand. Too many OEMS toward the shrinking domestic
 200000                                                                      demand
      0                                                                     OEMs try to expand in overseas market but the result has
                                                                             not been so positive due to the different conditions and
            2001     2002           2003     2004       2005                 requirement in each market which is difficult for Japanese
                                                                             OEMS to fulfill for its relatively weak management
                     Light Trucks    Heavy Trucks   Buses                    foundation

                                                               16
     6 MAKERS MANUFACTURE COMMERCIAL VEHICLE AT 13 PLANTS IN JAPAN
            Manufacturer                     Plant                            Volume per plant
          HINO MOTORS        Hino                                                            69,426(Truck)    (Data: April, 2005 – March,2006)
                             Hamura                                                          23,058(Truck)
                             Utsunomiya (J-BUS Ltd.)                                            4,877(Bus)
                             Komatsu (J-BUS Ltd.)
          NISSAN DIESEL      Ageo                                      42,417 (Truck: 40,816, Bus: 1,601)
          Mitsubishi Fuso    Kawasaki                                                       110,776(Truck)
                             Ooe                                                                4,679(Bus)
                             Toyama (Mitsubishi Fuso Truck & Bus)                               2,085(Bus)
          TOYOTA             Yoshihara (Toyota Auto Body Co., Ltd.)                         335,891(Truck)
                             Honsya                                                           54,235(Bus)
                             Hamura (HINO MOTORS)
          MAZDA              Onomichi                                                        65,460(Truck)              • Toyama
          ISUZU              Fujisawa                                 214,605 (Truck: 211,282, Bus:3,323)



                       HINO MOTORS             • Onomichii                       • Komatsu                                                       • Utsunomiya

                       NISSAN DIESEL                                                                                                             • Ageo
                       Mitsubishi Fuso
                                                                                                                                             • Kawasaki
                       TOYOTA
                       MAZDA                                                                                      • Hamura                       • Fujisawa
                       ISUZU                                                  • Honsya                            • Hino
                                                                              • Yoshihara                    • Ooe
                                                                                   17
Source: Interview
             CONTINUOUSLY SLUGGISH COMMERCIAL VEHICLES MARKET
             - No major improvement observed in domestic market
                                        Trends within the Japanese commercial vehicle industry

                                        Increased competition and continues prices drops due to stagnate domestic market
                                             The margins for domestic produced truck and bus continuously drops
                       Market
                                             Long stagnant Japanese logistic and transportation industry decreases the
                                               demand of replacing commercial vehicles



                                       Truck production only increases in Thailand and USA
                    Globalization           Isuzu Thailand to increase 30% and Hino USA to increase by 5 times
                                            Production in China is slightly increasing too but is forecasted to drop in 2008



                                       More R&D is being carried out by the suppliers
                                           OEMs seek for system/module in stead of single parts, for better weight
                        R&D-
                    displacement              reduction performance and improvement of production efficiency
                                       OEMs take initiative in R&D for key systems like Powertrain system and Brake system

                                                                     18
Source: STC Tokyo
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

                  Passenger cars and Motor cycles

                  Commercial Vehicles

                  Suppliers

             Japanese Construction Equipment Industry

             Recommendations

             References



                           19
THERE ARE ABOUT 500 AUTOMOTIVE SUPPLIERS IN JAPAN
- 21 of the top 100 automotive suppliers worldwide are Japanese
         Japanese automotive suppliers                               Geographical concentration of
                                                                        automotive suppliers

   There are approx. 500 suppliers for the
    automotive industry in Japan

   21 of the 100 largest automotive suppliers in the
    world (if you look at the turnover) are Japanese

   There is a very high concentration of automotive
    suppliers in the center area of Japan (along the
    railway line accross the main island)

   Many of the companies are large with number of
    production plants

   Traditionally there is no weak segments in Japan
                                                             Highly Dense   Dense   Intermediate   Low


                                                        20
              TOP 50 T1 SUPPLIERS BY SALES RANKING
              - Denso is the second largest Automotive supplier in the world
                                                                            T1 SUPPLIERS




              Electrical systems             Interior equipment                  Propulsion                           Body                         Running gear

                                       Cockpit, seats, dash-board, air
            Cables, bus systems, embedded                                Power train, exhaust systems,   Body, roof, glass, doors, lighting   Suspension, brakes, axles, steering,
            systems                    conditioning                      engines                         etc.                                 tires
                 Denso                    Denso                            Denso                            Denso                              Denso
                 Yazaki                   Aishin Seiki                     Aishin Seiki                     Toyota Body                        Aishin Seiki
                 Mitsubishi Electric      Aishin AW                        Toyota Industries                Calsonic Kansei                    JTEKT
                 Calsonic Kansei          Calsonic Kansei                  Mitsubishi Electric              Kanto Auto Works                   SRI
                 Sumitomo Denko           Takata                           Aishin AW                        Nissan Auto Body                   Toyota Gosei
                 Hitachi                  Toyota Bosyoku                   Calsonic Kansei                  Koito                              Yokohama Rubber
                 Tokai Rika               Toyota Gosei                     JTEKT                            Stanley                            Hitachi
                 Bosch Japan              NHK Spring                       JATCO                            Asahi Glass                        NHK Spring
                 Panasonic Automotive     Pioneer                          NOK                              Yachiyo Industry                   Tokai Rika
                   Systems                 Tokai Rika                       Sumitomo Metal                   Bridgestone                        Bosch Japan
                                           Keihin                           NTN                              Tokai Rubber                       KYB
   There are approx. 500 automotive  Alpine                                 Hitachi                                                              Bridgestone

     component suppliers in Japan.  Fujitsu Ten                             Futaba Sangyo                                                        Toyo Rubber
                                           Inoac                            NGK Spark Plug                                                       Advics
                                           Panasonic Automotive             Asmo                                                                 Showa
          Suppliers who are T2 as well         Systems                                                   Companies in bold are the
                                                                             Daido Special Steel                                                  Aishin Takaoka
                                           Tachi-S                          Aichi Seiko                 Top 20 by sales ranking                  Hitachi Metal
                                           Clarion                          Aishin Takaoka
Source: STC Tokyo                                                                         21
                                  ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                                       Manufacturer             Employees             Business                     Purchase decisions
                                       Denso                            105,723(*)    Air conditioning,            HQ, Aichi, Japan                              http://www.denso.co.jp/en/
                                                                                      Engine, Body, Running
                                                                                      gear, Safety, Sensors
                                       Aishin Seiki                      59,500(*)    Drive train, Break,          HQ, Aichi, Japan                                  http://www.aisin.com/
                                                                                      Chassis, Engine, Body
                                       Toyota Industries                 32,977(*)    Engines, Valves              Each Production plant, Japan http://www.toyota-industries.com/index.html
           Top 20 T1 Suppliers (1/2)




                                       Yazaki                                2,818    Wire harness, Gauges,        Each Production plant, Japan      http://www.yazaki-group.com/e/flash.html
                                                                                      Tachograph, ETC, etc.
                                       Toyota Body                          13,067    Body                         HQ, Aichi, Japan           http://www.toyota-body.co.jp/english/index.html

                                       Mitsubishi Electric               97,661(*)    Electronics                  Each Production plant, Japan           http://www.mitsubishielectric.co.jp/

                                       Aishin AW                            11,028    Cockpit, Interior,           HQ, Aichi, Japan                  http://www.aisin-aw.co.jp/en/index.html
                                                                                      Exhaust system, Air
                                                                                      conditioning, etc.
                                       Calsonic Kansei                   15,262 (*)   Transmission, Hybrid,        Each Production plant, Japan   http://www.calsonickansei.co.jp/index.html
                                                                                      Drive, Navigation

                                       Kanto Auto Works                      5,508    Body, Plastic moudling       HQ, Kanawawa, Japan              http://www.kanto-aw.co.jp/eng/index.htm
                                       JTEKT                             30,029 (*)   Coupling, Bearing,           Each Production plant, Japan                        http://www.jtekt.co.jp/
                                                                                      Sensors, etc.

                                        (*) total number of employees for all the firms adopting consolidated accounting
                                                                                                              22
Source: Internet, STC Tokyo
                                   ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                                   Manufacturer                    Employees        Business                       Purchase decisions
                                   Nissan Auto Body                        4,282    Body                           HQ, Kanagawa, Japan                      http://www.nissan-shatai.co.jp/

                                   Sumitomo Rubber Industries              5,224    Tire, wheel                    Each Production plant, Japan tp://www2.srigroup.co.jp/english/index.html

                                   Takata                                 33,000    Seat belt, Electronics,        Each Production plant, Japan              http://www.takata.com/global
                                                                                    Interior, Child seat,
                                                                                    Steering wheel, etc.
       Top 20 T1 Suppliers (2/2)




                                   Toyota Boshoku                          9,600    Seat, Interior/Exterior,       Each Production plant, Japan           http://www.toyota-boshoku.co.jp/
                                                                                    Filter, Power train, etc,.

                                   Sumitomo Denko                     124,610(*)    Materials for various          Each Production plant, Japan           http://www.sei.co.jp/index.en.html
                                                                                    components, breaks,
                                                                                    tires, etc.
                                   JATCO                                   7,624    Transmissions, Hybrid          Each Technical Center, Japan ttp://www.jatco.co.jp/ENGLISH/index.html
                                                                                    system

                                   Toyota Gosei                            5,390    Interior equipment,            Technical Center Aichi, Japan             http://www.toyoda-gosei.co.jp/
                                                                                    Power/Drive trains,
                                                                                    etc.
                                   Yokohama Rubber                     13,464(*)    Tires, wheels                  Each Production plant, Japan      http://www.yrc.co.jp/english/index.html
                                   NOK                                     4,439    Valves, Actuators, etc         Each Production plant, Japan                       http://www.nok.co.jp/
                                   Sumitomo Metal                          6,585    Crank shaft, Axels,            Each Production plant, Japan
                                                                                    Wheels                         http://www.sumitomometals.co.jp/e/index.html
                                   (*) total number of employees for all the firms adopting consolidated accounting
                                                                                                              23
Source: Internet, STC Tokyo
         THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMs (1/4)
         - Parts suppliers distribute all over Japan
                     Denso                             Toyota Bosyoku
                     Aishin Seiki                      Sumitomo Denko
                     Toyota Industries                 JATCO
                     Yazaki                            Toyota Gosei
                     Toyota Body                       Yokohama Rubber
                     Mitsubishi Electric               NOK
                     Aishin AW                         Sumitomo Metal
                     Calsonic Kansei
                     Kanto Auto Works
                     JTEKT
                     Nissan Auto Body
                     Sumitomo Rubber Ind.
                     Takata




                                                                              Separate slides

                                           = Head office                 24
Source: Internet, STC Tokyo
               THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMs (2/4)
               - Aichi is the parts base for Toyota and Mitsubishi Denso
                                                   Aichi Prefecture   Aishin Seiki
                                                                      Toyota Industries
                                                                      Yazaki
                                                                      Toyota Body
                                                                      Aishin AW
                                                                      JTEKT
                                                                      Sumitomo Rubber Ind.
                                                                      Takata

               Nagoya                                                 Toyota Bosyoku
                                                                      Toyota Gosei
                                                                      Yokohama Rubber




                              = Head office   25
Source: Internet, STC Tokyo
                THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMs (3/4)
                - Shizuoka is the parts base for Toyota and Nissan
                                                                         Yazaki
                                                   Shizuoka Prefecture   Kanto Auto Works
                                                                         Toyota Bosyoku
                                                                         JATCO
                                                                         Toyota Gosei
                                                                         Yokohama Rubber
                                                                         NOK




                              = Head office   26
Source: Internet, STC Tokyo
                THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMs (4/4)
                - Kanagawa is the parts base for Nissan
                                                                      Calsonic Kansei
                                                                      Kanto Auto Works
                                                Kanagawa Prefecture
                                                                      JTEKT
                                                                      Nissan Auto Body
                                                                      Takata
                                                                      Sumitomo Denko
                                                                      JATCO
                                                                      Yokohama Rubber




                                           27
Source: Internet, STC Tokyo
                 THERE ARE MORE THAN 300 T2 SUPPLIERS LOCATED IN JAPAN
                 - companies use only Japanese suppliers
                                                                              T2 SUPPLIERS




                   Electrical systems    Interior equipment                         Propulsion                              Body                   Running gear
                 Cables, bus systems,   Cockpit, seats, dash-board, air   Power train, exhaust systems, engines   Body, roof, glass, doors,   Suspension, brakes, axles, st
                                        conditioning                          Denso
                 embedded systems                                             Aishin seiki
                                                                                                                  lighting etc.               eering, tires
                                            Denso
                    Denso                                                    Mitsubishi Electric                     Denso                     Denso
                                            Aishin Seiki                     JTEK
                    Yazaki                 Calsonic Kansei
                                                                                                                       Calsonic Kansei           JTEKT
                                                                              NOK

                    Calsonic Kansei        Toyota Boshoku                   Sumitomo Metal                          Koito                     Toyota Gosei
                                                                              Hitachi
                    Hitachi                Toyota Gosei                                                              Stanley Electroc          Hitachi
                                                                              NTN
                                            NHK Spring
                    Tokai Rika                                               NGK                                     Bridgestone               NHK Spring
                                            Tokai Rika                       Asmo
                    Nihon Seiki                                                                                       Tokai Rubber              Tokai Rika
                                            Keihin                           Aichi Seiko

                    Imasen                 Inoac
                                                                              Tokai Rubber                            Ichiko                    KYB
                                                                              Aishin Takaoka
                    Omron                  Shiroki Kogyo                                                             Imasen                    AIshin Takaoka
                                                                              Yutaka Giken

                    Niles                  Valeo Thermal Systems            AIsan                                                              Hitachi Metal
                                            Nihon Plast                      Exedy
                    Nikko Electric                                                                                                               Topy
                                                                              Aichi Kikai
                                            Fuji Kiko
                                                                              Fuji Kiko                                                          Chuo Hatsujyo
                                            Imasen                           Sankei Giken
                                            Mikuni
                                                                                                                                                  Nisshinbo
                                                                              Kyosan Electric
         Companies in bold are the                                            Teikoku Piston Ring
                                            Howa Seni
          Top 20 by sales ranking                                             Art Kogyo
                                                                              Nittan Valve



                                                                                          28
Source: Internet, STC Tokyo
                                  ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                                  Manufacturer             Employees             Business                           Purchase decisions
                                  Denso                            105,723(*)    Air conditioning, Engine, Body,    HQ, Aichi, Japan
                                                                                 Running gear, Safety, Sensors      http://www.denso.co.jp/en/
                                  Aishin Seiki                      59,500(*)    Drive train, Break, Chassis,       HQ, Aichi, Japan
                                                                                 Engine, Body                       http://www.aisin.com/
                                  Yazaki                                2,818    Wire harness, Gauges,              Each Production plant, Japan           http://www.yazaki-
                                                                                 Tachograph, ETC, etc.              group.com/e/flash.html
      Top 20 T2 Suppliers (1/2)




                                  Mitsubishi Electric               97,661(*)    Electronics                        Each Production plant, Japan
                                                                                                                    http://www.mitsubishielectric.co.jp/
                                  Calsonic Kansei                   15,262 (*)   Transmission, Hybrid, Drive,       Each Production plant, Japan
                                                                                 Navigation                         http://www.calsonickansei.co.jp/index.html
                                  JTEKT                             30,029 (*)   Coupling, Bearing, Sensors, etc.   Each Production plant, Japan
                                                                                                                    http://www.jtekt.co.jp/
                                  Toyota Boshoku                        9,600    Seat, Interior/Exterior, Filter,   Each Production plant, Japan               http://www.toyota-
                                                                                 Power train, etc,.                 boshoku.co.jp/


                                  Toyota Gosei                          5,390    Interior equipment, Power/Drive    Technical Center Aichi, Japan                 http://www.toyoda-
                                                                                 trains, etc.                       gosei.co.jp/

                                  NOK                                   4,439    Valves, Actuators, etc             Each Production plant, Japan
                                                                                                                    http://www.nok.co.jp/
                                  Sumitomo Metal                        6,585    Crank shaft, Axels, Wheels         Each Production plant, Japan
                                                                                                                    http://www.sumitomometals.co.jp/e/index.html
                                                  (*) total number of employees for all the firms adopting consolidated accounting
                                                                                                          29
Source: Internet, STC Tokyo
                                   ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                                   Manufacturer                     Employees           Business                           Purchase decisions
                                   NTN                                     12,788 (*)   Axels, Engines, Drive trains,      Each Production plant, Japan
                                                                                        Suspensions, Transmissions, etc.   http://www.ntn.co.jp/
                                   Hitachi                                    41,157    Electric systems, Controllers,     Each production plant, Japan
                                                                                        Fuel/Exhaust/Engine system,        http://www.hitachi.co.jp/
                                                                                        Sensors, etc.
                                   Koito                                       4,188    Lightings, Hydraulic/Electric      Each Production plant, Japan
                                                                                        equipment                          http://www.koito.co.jp/f_index.html
       Top 20 T2 Suppliers (2/2)




                                   NHK Spring                                  3,837    Suspension springs, Engines,       Each Production plant, Japan
                                                                                        Interior/Exterior equipment,       http://www.koito.co.jp/f_index.html
                                                                                        Power train, Safety systems
                                   Tokai Rika                                  5,400    Electrical components,             HQ, Aichi, Japan
                                                                                        Interior/Exterior equipment,       http://www.tokai-rika.co.jp/company/index.html
                                                                                        Safety systems
                                   Stanley Electric                            3,193    Lightings                          Each Production plant, Japan          http://www.stanley.co.jp/

                                   KYB                                      8,387 (*)   Shock absorber, Power steering,    Each Production plant, Japan
                                                                                        Hydraulic components               http://www.kyb.co.jp/company/index.html
                                   NGK                                        3,381     Ceramics for exhausted             Each Production plant, Japan http://www.ngk.co.jp/
                                                                                        system
                                   Keihin                                     4,245     Engine, transmission,              Each Production plant, Japan
                                                                                        electronic controller, etc.        http://www.keihin-corp.co.jp/
                                   Bridgestone                            123,727 (*)   Tires, wheels                      Each Production plant
                                                                                                                           http://www.bridgestone.co.jp/tire/catalog.html
                                      (*) total number of employees for all the firms adopting consolidated accounting
                                                                                                           30
Source: Internet, STC Tokyo
THE T2 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMS
- Many T1 suppliers are also T2 suppliers
 Denso
                       NHK Spring
 Aishin Seiki
                       Tokai Rika
 Yazaki
                       Stanley
 Mitsubishi Electric
                       KYB
 Calsonic Kansei
                       NGK
 JTEKT
                       Keihin
 Toyota Boshoku
                       Bridgestone
 Toyota Gosei

 NOK

 Sumitomo Metal

 NTN

 Hitachi

 Koito




                                     31
             JAPANESE AUTOMOTIVE PARTS INDUSTRY IS BOOMING
             - Increasing export and overseas production by Japanese parts suppliers
                                        Trends within the Japanese Automotive supplier industry

                                        Overseas parts production increases in North America, EU and China by T1 suppliers
                                             Deliver parts to both Japanese and Foreign OEMs
                    Globalization       Increased Japanese auto parts supply to foreign OEMs and T1 suppliers
                                             To compensate stagnant margin from domestic market
                                             Joint product/market development with foreign T1 suppliers


                                        Increased auto parts supply to Japanese OEMs by foreign T1 suppliers
                    Competition              Collapse of Japanese Keiretsu purchasing mechanism
                    and success
                      factors                OEMs buy the best optimum parts with cost, performance and delivery merits in
                                               global production scheme

                                        More R&D is being carried out by the suppliers but with some exceptions
                                            OEMs seek for system/module in stead of single parts, for better weight
                        R&D-                   reduction performance and improvement of production efficiency
                    displacement
                                            Toyota and Honda tends to do more R&D in-house for maintaining technical
                                               advantage such as in Hybrid technologies
                                                                    32
Source: STC Tokyo
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

             Japanese Construction Equipment Industry

                  Manufacturers

                  Suppliers


             Recommendations

             References




                           33
                THE JAPANESE PRODUCTION OF CONSTRUCTION EQUIPMENT
                TOTALS ABOUT SEK 117.8 BILLION
                - the industry grew nearly 15% in 2005
                                                                                                                                     Other Machines
                 billion SEK                              Construction machines and construction vehicles in Japan
                                                                                                                                     SEK 12.9 billion
                125
                                                                                              Concrete SEK 1.4 billion
                                                                                          Underground SEK 1.9 billion
                100                                                                         Road SEK 3.2 billion


                 75

                                                                                                                         Lifting
                 50                                                                                                SEK 26 billion
                                                                                                                                    Earth Moving
                                                                                                                                    SEK 71 billion
                 25


                   0
                          2000          2001      2002       2003     2004   2005
                                               Domestic      Export

                         Earth Moving machine leads the industry by sharing more than 60% of production
                                                                                     34
Source: German Automotive Association
                    514,000 CONSTRUCTION EQUIPMENT ARE PRODUCED IN JAPAN
                                                                                      CONSTRUCTION EQUIPMENT



        EARTH MOVING                     LIFTING                               ROAD                   UNDERGROUND                   CONCRETE                FOUNDATION WORK               OTHER MACHINE
       (169,045 vehicles)            (161,903 vehicles)                   (74,082 vehicles)            (266 vehicles)               EQUIPMENT                  EQUIPMENT                   (16,051 vehicles)
                                     Crawler cranes, Truck cranes,                                                                (91,477 vehicles)           (1,192 vehicles)
       Hydraulic Excavators,         Rough terrain cranes, Truck          Graders/Scrapers,          Tunnel boring machines
       Mini-Hydraulic                                                                                                             Concrete Pump                                            Portable air
                                     mount type cranes, Jib               Rollers, Plate                                                                    Ground engineering
       excavators, Bulldozers,       cranes, Aerial work Platforms,                                                               cars, Concrete                                          compressors,
                                                                          compactors, Asphalt
       Wheel loaders,                forklifts                                                                                    Plants.                                                 Hydraulic
                                                                          paving machines
                                    23 manufacturer                                                                                                                                      crashers/breakers
                                          IHI
                                                                         14 manufacturer           15 manufacturers            12 manufacturer           14 manufacturer              21 manufacturer
      18 manufacturers                   Kato
                                                                               Kato                      Atlas Copco                 IHI                       Atlas Copco                  Komatsu
            Komatsu                      Kobelco
                                                                               Komatsu                   Koken Boring                Kyokuto                   Avolon                       Denyo
            CAT-M                        Hitachi Kenki
                                                                               CAT-M                     TCM                         Symtec                    IHI                          Hokuetsu Kogyo
            Furukawa                     Hitachi Sumitomo
                                                                               Kawasaki H. I.            Furukawa                    ShinMaywa                 Kato                         Kubota
            Kawasaki                     Maeda
                                                                               Sakai H. I.               IHI                         Daiichi Tecno             Sanwa Kiko                   CAT-M
            Kobelco                      Aichi
                                                                               Sumitomo Kenki            Kawasaki H. I.              Kitagawa                  Sanwa Kizai                  Chikusui Canycom
            Kubota                       Tadano
                                                                               Taikyoku                  Komatsu                     Kurihara                  Chowa Kogyo                  Hitachi Kenki
            Sakai H.I.                   Komatsu
                                                                               Hitachi Kenki             Sanwa Kizai                 Sanwa Kizai               Daiwa                        Morooka
            TCM                          Kyokuto
                                                                               Furukawa                  JFE Engineering             Nihon Kenki               Toho Chika Koki              Yanmar
            Takeuchi                     ShinMaywa
                                                                               Bomag                     Toho Chika Koki             Nakayama Iron             Nippon Sharyo                Okada Aiyon
            Toyota Industries            Taikyoku
                                                                               Mikasa                    Geotec Machinery            Avolon                    Hitachi Kenki                Kobelco
            Hitachi Kenki                Toyota Industries
                                                                               Meiwa                     Hitachi Kenki               Exen                      Hitachi Sumitomo             Kurihara
            MHI                          Nagano Industry
                                                                               Kanto                     Maeda                                                  Maruzen Kogyo                Sumitomo Kenki
            Yanmar                       Meiwa
                                                                               Hanta Kikai               Maruzen Kogyo                                          MHI                          Teisaku
            IHI                          Furukawa
                                                                                                          MHI                                                                                  Taguchi
            Kato                         Nichiyu
                                                                                                                                                                                                Toyo Kuki
            Sumitomo Kenki               Sumitomo Nacco
                                                                                                                                                                                                Nakayama Iron
            Nagano Industry              TCM
            Hokuetsu Kogyo               Kolec                                    THERE ARE 74 MANUFACTURERS IN JAPAN                                                                         NPK
                                                                                                                                                                                                Furukawa
                                          MHI
                                                                                                                                                                                                Maruzen Kogyo
                                          Shinko Electric
                                                                                                                                                                                                Yutani Kogyo
                                          Nissan Forklift
                                                                                                      35
Source: Japan Construction Equipment Manufacturers Association & Japan Industrial Vehicles Association
                      ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                      - CAT-M makes the purchasing decisions for the models produced in Japan

                                   Manufacturer                  Employees      Business                                                                             Purchase decisions


                                   Komatsu                         33,000 (*)   Earth moving, Lifting, Road, Underground, and others                                 HQ in Tokyo, Japan
    Construction equipment (1/5)




                                   CAT-Mitsubishi                      2,960    Earth moving, Road and others                                                        Each production plant, Japan

                                   Furukawa                         2,247(*)    Earth moving (transferred to Hitachi), Lifting, Road, Underground, and others        HQ in Tokyo, Japan

                                   Kawasaki Heavy Industries           9,909    Earth moving, Road, Underground                                                      Banshu Plant in Hyogo, Japan

                                   Kobelco Kenki                         600    Earth moving, Lifting, and others                                                    Each production plant, Japan

                                   Kubota                              8,706    Earth moving and others                                                              Each production plant, Japan

                                   Sakai Heavy Industries                300    Earth moving, Road                                                                   HQ in Tokyo, Japan

                                   TCM                                   644    Earth moving, Lifting, Underground                                                   HQ in Ryugasaki, Ibaraki, Japan

                                   Takeuchi                              436    Earth moving                                                                         HQ in Nagano, Japan

                                   Toyota Industries                 32,100     Earth moving, Lifting                                                                Takahama Plant in Aichi, Japan

                                   Hitachi Kenki                       3,253    Earth moving, Lifting, Road, Underground, Foundation work equipment & others         Tsuchiura Plant, Japan

                                   Mitsubishi Heavy Industries       32,627     Earth moving, Lifting, Underground, and Foundation work equipment                    Sagamihara Plant, Japan

                                   Yanmar                              2,696    Earth moving and others                                                              HQ in Fukuoka, Japan

                                   IHI                             26,585(*)    Earth moving, Lifting, Underground, Concrete equipment & Foundation work equipment   Each production plant, Japan

                                   (*) total number of employees for all the firms adopting consolidated accounting
Source: STC Tokyo                                                                                                      36
                      ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                      - Designers and Purchasers are located in the production plants
                                   Manufacturer               Employees      Business                                       Purchase decisions


                                   Kato                               N/A    Earth moving, Lifting, Road, Foundation work   HQ in Tokyo and Ibaraki plant by component

                                   Sumitomo Kenki                     970    Earth moving, Road & others                    Chiba Plant, Japan
    Construction equipment (2/5)




                                   Nagano Industry                    245    Earth moving, Lifting                          HQ in Nagano, Japan

                                   Hokuetsu Kogyo                     474    Earth moving                                   HQ in Niigata, Japan

                                   Hitachi Sumitomo                   360    Lifting and Foundation work equipment          Tsuchiura Plant in Ibaraki, Japan

                                   Maeda                              630    Lifting and Underground                        HQ in Nagano, Japan

                                   Aichi                              752    Lifting                                        Niiharu Plant in Gunma, Japan

                                   Tadano                           1,026    Lifting                                        Shido Plant in Kagawa, Japan

                                   Kyokuto                            890    Lifting                                        HQ in Hyogo, Japan

                                   ShinMaywa                        1,970    Lifting and Concrete equipment                 HQ in Hyogo, Japan

                                   Taikyoku                            50    Lifting and Road                               HQ in Saitama, Japan

                                   Meiwa                              100    Lifting and Road                               HQ in Saitama, Japan

                                   Nichiyu                            N/A    Lifting                                        HQ plant in Kyoto, Japan

                                   Sumitomo Nacco                     610    Lifting                                        HQ plant in Aichi, Japan


                                   (*) total number of employees for all the firms adopting consolidated accounting

Source: STC Tokyo                                                                                                    37
                      ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                      - Koken Boring and others start web-based purchasing

                                   Manufacturer               Employees      Business                                            Purchase decisions


                                   Kolec                              N/A    Lifting                                             HQ in Osaka, Japan
    Construction equipment (3/5)




                                   Shinko Electric                2,878(*)   Lifting                                             Ise Plant in Mie, Japan

                                   Nissan Forklift                    N/A    Lifting                                             By Takada Kogyo, Japan

                                   Bomag                               40    Road                                                Ibaraki Plant, Japan

                                   Mikasa                             120    Road                                                Each production plant

                                   Kanto                              N/A    Road                                                HQ in Ibaraki, Japan

                                   Hanta Kikai                        137    Road                                                Takeshima Plant in Osaka, Japan

                                   Atlas Copco                        120    Underground and Foundation work equipment           Takeshima Plant in Osaka, Japan

                                   Koken Boring                       230    Underground                                         Procurement office in Tokyo, Japan

                                   Sanwa Kizai                        120    Underground and Foundation work equipment           Each production plant

                                   JFE Engineering                  1,900    Underground                                         Heavy Industry Center inYokohama, Japan

                                   Toho Chika Koki                    N/A    Underground and Foundation work equipment           HQ in Fukuoka, Japan

                                   Geotec Machinery                   100    Underground                                         Kanagawa plant, Japan

                                   Maruzen Kogyo                      N/A    Underground, Foundation work equipment and others   HQ plant in Shizuoka, Japan

                                   (*) total number of employees for all the firms adopting consolidated accounting
Source: STC Tokyo                                                                                               38
                      ALL PURCHASE DECISIONS ARE MADE IN JAPAN


                                   Manufacturer               Employees      Business                                           Purchase decisions


                                   Kyokuto                            890    Concrete equipment                                 HQ in Hyogo, Japan
    Construction equipment (4/5)




                                   Symtec                             N/A    Concrete equipment                                 By Kakiuchi in Kochi, Japan

                                   Daiichi Tecno                      N/A    Concrete equipment                                 HQ in Gifu, Japan

                                   Kitagawa                           987    Concrete equipment                                 HQ in Hiroshima, Japan

                                   Kurihara                           N/A    Concrete equipment and others                      HQ in Miyagi, Japan

                                   Nihon Kenki                         65    Concrete equipment                                 HQ in Saga, Japan

                                   Nakayama Iron                      135    Concrete equipment and others                      HQ in Saga, Japan

                                   Avolon                             N/A    Concrete equipment and Foundation work equipment   HQ in Kanagawa, Japan

                                   Exen                               173    Concrete equipment                                 Souka Plant in Saitama, Japan

                                   Sanwa Kiko                          85    Foundation work euqipment                          Each production plant

                                   Chowa Kogyo                        N/A    Foundation work euqipment                          HQ in Tokyo, Japan

                                   Daiwa                              169    Foundation work euqipment                          HQ plant in Aichi, Japan

                                   Nippon Sharyo                    1,851    Foundation work euqipment                          Narumi Plant in Nagoya, Japan

                                   (*) total number of employees for all the firms adopting consolidated accounting

Source: STC Tokyo                                                                                               39
          ALL PURCHASE DECISIONS ARE MADE IN JAPAN

                                      Manufacturer               Employees      Business                                 Purchase decisions
       Construction equipment (5/5)




                                      Denyo                              311    Other machines                           Fukui Plant, Japan

                                      Chikusui Canycom                   183    Other machines                           Fukuoka Plant, Japan

                                      Morooka                             62    Other machines                           Ibaraki Plant, Japan

                                      Okada Aiyon                        115    Other machines                           HQ in Osaka, Japan

                                      Teisaku                             75    Other machines                           Toyohashi Plant in Shizuoka, Japan

                                      Taguchi                             60    Other machines                           HQ plant in Okayama, Japan

                                      Toyo Kuki                          307    Other machines                           HQ plant in Saga, Japan

                                      NPK                                238    Other machines                           Each production plant, Japan

                                      Yutani Kogyo                        88    Other machines                           Each production plant, Japan

                                      (*) total number of employees for all the firms adopting consolidated accounting




Source: STC Tokyo                                                                                              40
          EARTH MOVING EQUIPMENT MAKERS


          Production plants (1/4)
                                                                          ①
                                                                  ②
                                                                          ③
                                                              ②
                                                                               ①
                                          ①                           ②
                                      ②                                                ②
                                                          ①
                                                      ③
                                  ③
                                              ①
                              ①       ②

                                                                                               ⑥
                                                                                           ④
                                                                                                   ①

                                                                                           ①
                                                                                                   ①
                                                                  ②                        ③
                                                  ②
                                                          ②       ②            ①       ⑤
                                                  ②
Source: Internet, STC Tokyo                                               41       ①
         LIFTING EQUIPMENT / ROAD EQUIPMENT MAKERS

          Production plants (2/4)


                                                                   ⑤




                                      ③   ③
                              ④                            ①


                                                               ②
                                                           ①




                                  ①       ①            ①
                                      ②   ②   ②        ②

Source: Internet, STC Tokyo                       42
            UNDERGROUND / CONCRETE EQUIPMENT MAKERS (3/4)

               Production plants (3/4)




                                  ①


                              ②




                                                           ②


                                                               ①
                                      ①                ①       ②
                                          ③        ②

Source: Internet, STC Tokyo                   43
          FOUNDATION WORK EQUIPMENT /
          OTHER MACHINES MAKERS (4/4)

          Production plants (4/4)



                              ①
                                  ②
                                      ③
                                                  ①



                       ③

                                                                   ②



                                                               ④
                                          ①
                                          ②   ①
                                              ②       ③
Source: Internet, STC Tokyo                               44
          PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS (1/5)
                Manufacturer                     Plant                                                                         Models and focus

       Komatsu                     ①   Awazu                         Small & medium-sized bulldozers, small hydraulic excavators, mini excavators, small and medium-sized wheelloaders
                                   ②   Osaka,                        Large bulldozers, large & medium-sized hydraulic excavators, recycling equipment
                                   ③   Rokko                         Super-large bulldozers, super-large hydraulic excavators
                                   ④   Mooka                         Large wheelloaders, dump trucks, road-building machines                                                    thttp://www.komatsu.co.jp/
                                   ⑤   Kawagoe (Komatsu Zenoah)      Mini excavators, skid steer loaders outdoor power equipmen                                                  http://www.zenoah.co.jp/
                                   ⑥   Oyama (Komatsu Forklift)      Forklift trucks (Komatsu Forklift Co., Ltd)                                                                 http://www.lift.co.jp/
       CAT-Mitsubishi              ① Sagami                          Mini & small-sized excavators, small & medium-sized bulldozers and wheelloaders
                                   ② Akashi                          small, medium & large sized excavators, road paving machines                                                         http://www.scm.co.jp/
       Furukawa                    ① Takasaki                        Tunnel and boring machines (Furukawa Rockdrill Co., Ltd.)                                       http://rvs.furukawakk.co.jp/ms/index.htm
                                   ② Yoshii                          Tunnel and boring machines (Furukawa Rockdrill Co., Ltd.)
                                   ③ Sakkura, Chiba                  Cranes (Furukawa Unic Co., Ltd.)                                                                             http://www.furukawaunic.co.jp/
       Kawasaki Heavy Industries   ① Banshu                          Wheelloaders, Snow remover, Roller, Concrete paving
                                                                                                                                                                                        http://www.khi.co.jp/

       Kobelco                     ① Hiroshima                       Excavators, Wheelloaders, and other machines for material handling, construction recycling, civil engineering, railway track working etc.
                                   ② Ogaki                                                                                                                                     http://www.kobelco-kenki.co.jp/
       Kubota                      ① Hirakata                        Mini Backhoes, Excavators, wheelloaders, carriers
                                   ② Sakai                                                                                                                                     http://www.kenki.kubota.co.jp/

       Sakai Heavy Industries      ① Tokyo (in Kawagoe)              Road rollers, Asphalt finishers, Compactors, Road stabilizers, Backhoe loaders                            http://www.kenki.kubota.co.jp/

       TCM                         ① Ryugasaki                       Large-sized wheelloaders, tunnelling machines, transfer cranes, container carriers, forklift, etc.
                                   ② Shiga                           Small and medium-sized forklift, skid steer loaders, shovel loaders, and material handling system products
                                                                                                                                                                                          http://www.tcm.co.jp/

       Takeuchi                    ① Head Office/Plant (in Nagano)   Excavators, Rubber Track Loader, Dump carriers
                                   ② Togura                                                                                                                                        http://www.takeuchi-mfg.co.jp/

       Toyota Industries           ① Takahama                        Lift trucks, material handling systems
                                                                                                                                                                               http://www.toyota-shokki.co.jp/

       Hitachi Kenki               ① Tsuchiura                       Excavators, Crawler cranes, and Hydraulic equipments
                                   ② Shiga (Hitachi Kenki Tiera)     Mini excavators                                                                                                      http://www.tiera.co.jp/

       Mitsubishi Heavy            ① Sagamihara                      Small-sized wheelloades, Motor grader, Crawler drills, AGV, Articulated dumper
       Industries                                                                                                                                                                  http://www.mhi.co.jp/fla.html

                                                                                                                                   Production volume per plant is not available in Japan
Source: STC Tokyo                                                                                   45
             PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS (2/5)
               Manufacturer                Plant                                                                     Models and focus

       Yanmar                 ① Fukuoka (OEM at Seirei   Mini excavators, Wheelloaders, Crawler carriers                                                http://www.yanmar.co.jp/index-const.htm
                              Kogyo)                                                                                                                    http://www.seirei.com/
                              ② OEM at Kanzaki           Wheelloaders                                                                                   http://www.kanzaki-kokyukoki.jp/
       IHI                    ① Yokohama (IHI Kenki)     Excavators, Crawler carriers, Road cleaners, Crawler cranes, Concrete pumps                    ① http://www.ihi-kenki.co.jp/
                              ② Kureshingu (Hiroshima)   Truck cranes, Asphalt finisher, Small-sized jib crane, Tunnelling machines, Conveyers          ② http://www.ihi.co.jp/
                              ③ Yasuura                  Large-sized canes for construction, Conveyors, Material handling equipment                     ③ http://www.iuk.co.jp/
       Kato                   ① Ibaraki                  Various type of cranes, Excavators, Earth drills for foundation work, etc.           http://www.kato-works.co.jp/index_redirected.html
                              ② Gunma

       Sumitomo Kenki         ① Chiba                    Excavators, Asphalt finishers, mobile crashers, Cranes, etc.                                         http://www.sumitomokenki.co.jp/

       Nagano Industry        ① HQ Plant (in Nagano)     Aerial work platform, Backhoes, Crawler cranes                                                       http://www.avis.ne.jp/~nkknewdv/
                              ② Omi (in Nagano)
                              ③ Sakakita (in Nagano)
       Hokuetsu Kogyo         ① Niigata                  Mini backhoes, Engine generators, Compressors, Welding machines                                                http://www.airman.co.jp/

       Hitachi Sumitomo       ① Nagoya                   Crawler cranes, Truck cranes, Earth drills, etc.                                                          http://www.hands-crane.com/

       Maeda                  ① Nagano                   Various type of cranes, Aerial work platform, Dump truck, Tunelling machines, etc.                             http://www.maesei.co.jp/

       Aichi                  ① Niiharu                  Various types of Aerial work platform                                                                        http://www.aichi-corp.co.jp/


       Tadano                 ① Takamatsu                Various types of cranes and Aerial work platforms                                                     http://www.tadano.co.jp/index.html
                              ② Shido
       Kyokuto                ①   Yokohama               Arerial work platforms, Concrete pumps, Mixer / Dump trucks, etc.                                               http://www.kyokuto.com/
                              ②   Nagoya
                              ③   Miki (in Hyogo)
                              ④   Fukuoka
                              ⑤   Tohoku (in Aomori)
       ShinMaywa              ① Sano                     Rear truck dumps, Long dump trucks, Rear dump trailors, Lift tractors, Car carriers, etc.                   http://www.shinmaywa.co.jp/
                              ② Shonan
                              ③ HIroshima
                                                                                                                         Production volume per plant is not available in Japan
Source: STC Tokyo                                                                        46
          PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS (3/5)
                Manufacturer                 Plant                                                                            Models and focus

       Taikyoku                ① Kazo (in Saitama)              Plate compactors, Concrete cutters, Vibration rollers, etc.                                                    http://www.taikyoku.co.jp/


       Meiwa                   ① Kawaguchi                      Compactors, Rollers, etc.                                                                                     http://www.meiwa-ltd.co.jp/


       Nichiyu                 ① Kyoto                          Battery forklifts and other types of forklifts, Various type of material handling equipment                   http://www.nichiyunet.co.jp/
                               ② Shiga

       Sumitomo Nacco          ① Head Office Plant (in Aichi)   Forklifts, Automatic storage system, Automatic-guided system, etc.                  http://www5.mediagalaxy.co.jp/sumitomonacco/top.html

       Kolec                   ① Shiga                          Forklifts, Tractors, Material handling equipment, et                                                               http://www.kolec.co.jp/


       Shinko Electric         ① Ise                            Various types of large-sized forklifts, Transporting vehicles, Automatic-guided systems, etc,               http://www.shinko-elec.co.jp/

       Nissan Forklift         ① Totsuka (OEM at Takada)        Forklifts, Automatic-guided vechicles, etc.                                                           http://www.nissan.co.jp/FORKLIFT/
                                                                                                                                                                                 http://www.takada.co.jp/
       Bomag                   ① Ibaraki                        Vibration rollers                                                                                                http://www.bomag.co.jp/

       Mikasa                  ① Tatebayashi                    Concrete vibrators, Vibration rollers, etc.                                                                     http://www.mikasas.com/
                               ② Kasukabe                       Concrete cutters, Compactors, etc.
       Kanto                   ① Ibaraki                        Various types of rollers                                                                                        http://www.kanto-tk.co.jp/

       Hanta Kikai             ① Takeshima                      Asphalt finishers, Deicing chemical spreaders, Road surface planers, Pavement machines, etc.                     http://www.hantak.co.jp/

       Atlas Copco             ① Yokohama                       Drilling equipment, Underground vehicles, Ground engineering equipment, etc.                                 http://www.atlascopco.co.jp/

       Koken Boring            ① Atsugi                         Drilling equipment, Boring machine, etc.                                                                   http://www.koken-boring.co.jp/
                               ② Suwa

       Sanwa Kizai             ① Narita                         Foundation work equipment, Pipe Jacking equipment, etc.                                                      http://www.sanwakizai.co.jp/
                               ② Chiba

                                                                                                                               Production volume per plant is not available in Japan
Source: STC Tokyo                                                                                47
          PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS (4/5)
                Manufacturer                Plant                                                                         Models and focus

       JFE Engineering         ① Tsurumi                      Tunnelling machines, Transporting machines, and Material handling equipment                                     http://www.jfe-eng.co.jp/


       Toho Chika Koki         ① Fukuoka                      Boring machines, Pumps, Mixers                                                                             http://www.tohochikakoki.com/


       Geotec Machinery        ① Kanagawa                     Shielding machines, Steel Pipes, Material handling equipment, etc.                                         http://www.geo-machine.com/


       Maruzen Kogyo           ① HQ plant (in Shizuoka)       Mini cranes, Drills for railways, Hydraulic attachments and hand tools, etc.                             http://www.maruzenkogyo.co.jp/

       Symtec                  ① Kochi (OEM at Kakiuchi )     Concrete pumps                                                                                                  http://www.symtec.co.jp/
                                                                                                                                                                   http://www.i-kochi.or.jp/hp/kakiuchi/

       Daiichi Tecno           ① Gifu                         Concrete pumps                                                                                 http://homepage2.nifty.com/daiichitechno/

       Kitagawa                ① Hiroshima (5 locations)      Cranes, Foundation work equipment, Elevators for construction, etc.                                                  http://www.kiw.co.jp/
                               ② Saitama
                               ③ Wakayama
       Kurihara                ① Miyagi                       Concrete plants                                                                                             http://www.e-kurihara.co.jp/
       Nihon Kenki             ① Osaka                        Concrete plants, Mixers, Conveyors, etc.                                                     http://www.nihonkenki.co.jp/kenki/index.htm
                               ② Fukuoka
       Nakayama Iron           ① Saga                         Concrete plants, and various plant constructions, Ground engineering equipment, etc.                     http://www.nakayamairon.co.jp/


       Avolon                  ① HQ Plant (in Kanagawa)       Piling machines, Pile extraction machines, Ground engineering machines, etc.                                    http://www.avolon.co.jp/

       Exen                    ① Souka                        Vibrators for civil engineering and construction, Drills, Road cutters, Concrete equipment                        http://www.exen.co.jp/


       Sanwa Kiko              ① Takino HQ plant (in Hyogo)   Auger drills, Ground foundation work equipment                                                             http://www.sanwakikoh.co.jp/
                               ② Chiba
                               ③ Kyushu
                                                                                                                            Production volume per plant is not available in Japan
Source: STC Tokyo                                                                            48
            PROFILE OF CONSTRUCTION MACHINERY MANUFACTURERS (5/5)
              Manufacturer                   Plant                                                                     Models and focus

      Chowa Kogyo            ① Osaka                         Piling machines, Piling extraction machines, Attachment for excavators, Hammers, etc.                           http://www.chowa.co.jp/


      Daiwa                  ① HQ Plant in Aichi             Piling machines, Cranes, Ground engineering machines, Tunnelling machines, etc.                              http://www.daiwakiko.co.jp/


      Nippon Sharyo          ① Narumi                        Piping machines, Crawler cranes, Earth drills, and other Ground foundation work equipment                    http://www.n-sharyo.co.jp/


      Denyo                  ① Fukui                         Compressors, Aerial work platform, etc.                                                                        http://www.denyo.co.jp/

      Chikusui Canycom       ① Fukuoka                       Construction user carriers                                                                                  http://www.canycom.co.jp/


      Morooka                ① Ibaraki                       Crawler carrier dumps, Shovel loaders, Forklifts , etc.                                                     http://www.morooka1.co.jp/
      Okada Aiyon            Trading house                   Breakers, Crushers, Screens, Grapples, Cutters, etc.                                                   http://www.aiyon.co.jp/index.htm
                                                             Business alliance with Teisaku (http://www.teisaku.co.jp/) Aiyon Tec (URL not available), Ingasoll Rand (http://www.irpsg.jp/), etc.
      Teisaku                ① Toyohashi                     Hydraulic breakers, Crashers, Pulverizer, Anchor drills                                                       http://www.teisaku.co.jp/
      Taguchi                ①   Okayama HQ                  Attachments for construction equipment , Cutters for asphalt and concrete materials, etc.                     http://www.taguchi.co.jp/
                             ②   Imaho (in Okayama)
                             ③   Kume (in Okayama)
                             ④   Kawagoe
      Toyo Kuki              ① Nakahara HQ Plant (in Saga)   Drills, Hammers, Concrete breakers, Air winches, Cutters, etc.                                               http://www.toku-mfg.com/

      NPK                    ① Osaka                         Air tools                                                                                                       http://www.npk.co.jp/
                             ② Higashi-Osaka                 Hydraulic breakers, Concrete crashers, Cuter for iron frame, Piping machines, Piping extraction machines, Screening machines, Mixers,
                             ③ Nabari                        and plant equipments
      Yutani Kogyo           ① HQ Plant in Higashi-Osaka     Attachment and components for construction equipment                                                           http://www.yutani.ne.jp/
                             ② Kyoto                         Business alliance with Taguchi for attachment products

                                                                                                                              Production volume per plant is not available in Japan


Source: STC Tokyo                                                                             49
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

             Japanese Construction Equipment Industry

                  Manufacturers

                  Suppliers


             Recommendations

             References




                           50
     MOST OF T1 SUPPLIERS ARE COMMON TO AUTOMOTIVE SECTOR
                                                                               T1 SUPPLIERS


                                                       Propulsion and                Interior equipment
    Electrical systems                                                                                                    Hydraulics                     Accessories
                                                        Running Gear                       & Body
      Cables, bus systems,                           Power train, exhaust systems,   Body, roof, Cockpit, seats,       Hydraulic components      Tires, glass, lighting, attachment,
      embedded systems        Propulsion &           engines Suspension, brakes,     dash-board, doors,                    KYB                  etc
          Denso              Running gear           axles, steering                     Denso                            Bridgestone               Koito

          Hitachi             Asmo                      Denso                         Hitachi Kenki                    Tokai Rubber              Stanley

          Tokai Rika          Toyo Rubber               Toyota Industries             Kubota                           Toshiba Machine           Asahi Glass

          KYB                 Aichi Seiko               Isuzu                         JTEKT                            Tadano                    Bridgestone

          Tokimec             Tokai Rubber              Hino Motor                    NTN                              Komatsu Zenoah            Tokai Rubber

          Nikko Electric      Exedy                     Mitsubishi-Fuso               Toyota Gosei                     Tokimec                   Ichiko
                               Topy                      JTEKT                         Tokai Rika                       Nabtesco                  Hi-Lex
                               Akebono Brake             Kubota                        Shigeru Kogyo                    Fujikoshi                 NSG
                               Chuo Hatsujyo             Sumitomo Metal                U-shin                           KPM                       Izumi Seiki
                               T-rad                     Sumitomo Rubber               Tadano                           Boschrexroth              CAE
                               Sankei Giken              Toyota Gosei                                                                               Taguchi
                               Kyosan Electric           Yokohama Rubber                                                                            Sandvic Toyo
                               Teikoku Pistonring        NHK Spring
                               Art Kogyo                 Nissan Diesel
                               Nittan                    NOK                             Companies in bold are the
                                                                                            Top 20 by sales ranking
                                                                                                                                      Suppliers who are T2 as well
                               Fukuyama Rubber           NTN
                               TRS                       Hitachi
                               Komatsu Diesel            Tokai Rika
                               Komatsu Castex            KYB
                               Hiab                      Bridgestone
                               Antex                     Aishin Takaoka

                                                                                     51
Source: Internet, STC Tokyo
                                     ALL PURCHASE DECISIONS ARE MADE IN JAPAN

                                     Manufacturer              Employees           Business                             Purchase decisions

                                     Denso                           105,723(*)    Air conditioning, Engine, Body,      HQ, Aichi, Japan                               http://www.denso.co.jp/en/
                                                                                   Running gear, Safety, Sensors
                                     Isuzu                            22,536(*)    Diesel engines                       Tochigi Plant, Japan               http://www.isuzu.co.jp/world/index.html

                                     Toyota Industries                32,977(*)    Engines, Valves                      Each Production plant, Japan http://www.toyota-industries.com/index.html
         Top 20 T1 Suppliers (1/2)




                                     Hino Motors                         9,507     Diesel engines                       HQ, Hino, Japan                          http://www.hino.co.jp/j/index.html

                                     Mitsubishi-Fuso                 16,000 (*)    Diesel engines                       Kawasaki Plant, Japan                     http://www.mitsubishi-fuso.com/

                                     Kubota                          23,049 (*)    Valves, Engines                      Each Production plant, Japan     http://www.kubota.co.jp/siryou/index.html
                                     Hitachi Kenki                   13,291 (*)    Piston pumps, Travel/Swing           Each Production plant, Japan
                                                                                   devices, Swivel joints, Pilot                                 http://www.hitachi-kenki.co.jp/company/index.html
                                                                                   valves, Swing bearings
                                     JTEKT                           30,029 (*)    Coupling, Bearing, Sensors, etc.     Each Production plant, Japan                        http://www.jtekt.co.jp/
                                     Sumitomo Rubber                     5,224     Tires, wheels                        Each Production plant, Japan    tp://www2.srigroup.co.jp/english/index.html
                                     Industries
                                     Nissan Diesel                       2,918     Diesel engines                       HQ, Ageo, Japan                             http://www.nissandiesel.co.jp

                                     (*) total number of employees for all the firms adopting consolidated accounting


                                                                                                               52
Source: Internet, STC Tokyo
                   ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                                     Manufacturer              Employees        Business                                Purchase decisions

                                     Toyota Gosei                      5,390    Interior equipment, Power/Drive         Technical Center Aichi, Japan      http://www.toyoda-gosei.co.jp/
                                                                                trains, etc.

                                     Yokohama Rubber               13,464(*)    Tires, wheels                           Each Production plant, Japan     http://www.yrc.co.jp/english/index.html
                                     NOK                               4,439    Valves, Actuators, etc                  Each Production plant, Japan                 http://www.nok.co.jp/

                                     Sumitomo Metal                    6,585    Crank shaft, Axels, Wheels              Each Production plant, Japan
         Top 20 T1 Suppliers (2/2)




                                                                                                                                              http://www.sumitomometals.co.jp/e/index.html
                                     NTN                          12,788 (*)    Axels, Engines, Drive trains,           Each Production plant, Japan                  http://www.ntn.co.jp/
                                                                                Suspensions, Transmissions, etc.

                                     Hitachi                         41,157     Electric systems, Controllers,          Each production plant, Japan              http://www.hitachi.co.jp/
                                                                                Fuel/Exhaust/Engine system,
                                                                                Sensors, etc.
                                     Koito                             4,188    Lightings, Hydraulic/Electric           Each Production plant, Japan    http://www.koito.co.jp/f_index.html
                                                                                equipment

                                     NHK Spring                        3,837    Suspension springs, Engines,            Each Production plant, Japan    http://www.koito.co.jp/f_index.html
                                                                                Interior/Exterior equipment, Power
                                                                                train, Safety systems
                                     Tokai Rika                        5,400    Electrical components,                  HQ, Aichi, Japan    http://www.tokai-rika.co.jp/company/index.html
                                                                                Interior/Exterior equipment, Safety
                                                                                systems
                                     Stanley Electric                  3,193    Lightings                               Each Production plant, Japan              http://www.stanley.co.jp/
                                     (*) total number of employees for all the firms adopting consolidated accounting
                                                                                                                 53
Source: Internet, STC Tokyo
              THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMS

            Denso
                                Toyota Gosei      Koito
            Isuzu
                                Yokohama Rubber   NHK Spring
            Toyota Industries
                                NOK               Tokai Rika
            Hino Motors
                                Sumitomo Metal    Stanley Electric
            Mitsubishi Fuso
                                NTN
            Kubota
                                Hitachi
            Hitachi Kenki

            JTEKT

            Sumitomo Rubber

            Nissan Diesel




Source: Internet, STC Tokyo                                    54
               THERE ARE ABOUT 150 T2 SUPPLIERS LOCATED IN JAPAN
               - Most of the suppliers are common to automotive sector
                                                                            T2 SUPPLIERS


                                                        Propulsion and              Interior equipment
     Electrical systems                                                                                         Hydraulics             Accessories
                                                         Running Gear                     & Body
      Cables, sensors, bus                           Power train, exhaust           Body, Cockpit, dash-    Hydraulic components   Tires,Glass, Lighting etc
      systems, control units                         systems, engines, axles        board, doors, seats        KYB                     NHK Spring
          Denso                                     Suspension, brakes, steering       Denso                 Bridgestone             Bridgestone
          Hitachi                                       Denso                         JTEKT                 Tokai Rubber            Tokai Rubber
          Tokai Rika                                    JTEKT                         Toyota Gosei          Toshiba Machine         Asmo
          KYB                  Propulsion and           Sumitomo Metal                NTN                   Tadano                  Koito
          Tokimec               Running Gear            Toyota Gosei                  Tokai Rika            Komatsu Zenoah          Stanley
          Nikko Electric       Asmo                    NHK Spring                    Koito                 Tokimec                 Ichiko
                                Aichi Seiko             KYB                           Stanley Electric      Fujikoshi               Tokai Rubber
                                Tokai Rubber            Aishin Takaoka                Bridgestone           KPM                     Chuo Hatsujyo
      Companies in bold         Exedy                   Topy                          Tokai Rubber          Kyoritsu
       are the Top 20 by        Sankei Giken            NOK                           Tadano
         sales ranking
                                Kyosan Electric         NTN                           Hi-Lex
                                Teikoku Piston Ring     Hitachi                       Ichiko
                                Art Kogyo               Tokai Rika
                                Nittan Valve
                                Chuo Hatsujyo


                                                                                    55
Source: Internet, STC Tokyo
THE T2 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMS
- Many T1 suppliers are also T2 suppliers
     Denso            Asmo

     JTEKT            Aichi Seiko
     Toyota Gosei
                      Tokai Rubber
     NOK
                      Aishin Takaoka
     Sumitomo Metal
                      Topy
     NTN
                      Exedy
     Hitachi
                      Toshiba Machine
     Koito

     NHK Spring

     Tokai Rika

     Stanley

     KYB

     Bridgestone




                                        56
                                  ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                                  Manufacturer              Employees             Business                               Purchase decisions
                                  Denso                             105,723(*)    Air conditioning, Engine, Body,        HQ, Aichi, Japan
                                                                                  Running gear, Safety, Sensors          http://www.denso.co.jp/en/
                                  JTEKT                             30,029 (*)    Coupling, Bearing, Sensors, etc.       Each Production plant, Japan             http://www.jtekt.co.jp/

                                  Toyota Gosei                          5,390     Interior equipment, Power/Drive        Technical Center Aichi, Japan
                                                                                  trains, etc.                           http://www.toyoda-gosei.co.jp/
                                  NOK                                   4,439     Valves, Actuators, etc                 Each Production plant, Japan             http://www.nok.co.jp/
      Top 20 T2 Suppliers (1/2)




                                  Sumitomo Metal                        6,585     Crank shaft, Axels, Wheels             Each Production plant, Japan
                                                                                                                         http://www.sumitomometals.co.jp/e/index.html
                                  NTN                               12,788 (*)    Axels, Engines, Drive trains,          Each Production plant, Japan
                                                                                  Suspensions, Transmissions, etc.       http://www.ntn.co.jp/
                                  Hitachi                              41,157     Electric systems, Controllers,         Each production plant, Japan
                                                                                  Fuel/Exhaust/Engine system,            http://www.hitachi.co.jp/
                                                                                  Sensors, etc.
                                  Koito                                 4,188     Lightings, Hydraulic/Electric          Each Production plant, Japan
                                                                                  equipment                              http://www.koito.co.jp/f_index.html

                                  NHK Spring                            3,837     Suspension springs, Engines,           Each Production plant, Japan
                                                                                  Interior/Exterior equipment, Power     http://www.koito.co.jp/f_index.html
                                                                                  train, Safety systems
                                  Tokai Rika                            5,400     Electrical components,                 HQ, Aichi, Japan     http://www.tokai-
                                                                                  Interior/Exterior equipment, Safety    rika.co.jp/company/index.html
                                                                                  systems

Source: Internet, STC Tokyo                    (*) total number of employees for all the firms adopting consolidated accounting
                                                                                                          57
                           ALL PURCHASE DECISIONS ARE MADE IN JAPAN
                                  Manufacturer                  Employees            Business                Purchase decisions
                                  Stanley Electric                          3,193    Lightings               Each Production plant, Japan              http://www.stanley.co.jp/

                                  KYB                                    8,387 (*)   Hydraulic               Each Production plant, Japan http://www.kyb.co.jp/company/index.html
                                                                                     components
                                  Bridgestone                         123,727 (*)    Tires, wheels           Each Production plant http://www.bridgestone.co.jp/tire/catalog.html

                                  Asmo                                 11,237 (*)    Motors                  HQ, Shizuoka, Japan                       http://www.asmo.co.jp/
            Top 20 T2 Suppliers




                                  Aichi Seiko                               2,340    Forged components       Each Production plant, Japan               http://aichi-steel.co.jp/
                                  Tokai Rubber                           8,385 (*)   Various type of         Each Production plant, Japan              http://www.tokai.co.jp/
                                                                                     horses
                                  Aishin Takaoka                            2,816    Engines, Drives         Each Production plant, Japan         http://www.at-takaoka.co.jp/

                                  Topy                                      2,262    Wheels, Press           Each Production plant, Japan        http://www.topy.co.jp/top.html
                                                                                     components

                                  Exedy                                  8,623(*)    Transmission,           HQ, Osaka, Japan                           http://www.exedy.co.jp/
                                                                                     Clutch, Torque
                                                                                     converter
                                  Toshima Machine                        3,336(*)    Control valve, Motor,   HQ, Shizuoka, Japan               http://www.toshiba-machine.co.jp/
                                                                                     Piston pump


                                  (*) total number of employees for all the firms adopting consolidated accounting
                                                                                                       58
Source: Internet, STC Tokyo
              THE CONSTRUCTION EQUIPMENT INDUSTRY IS BOOMING
              - Japanese OEMs mostly use Japanese parts
                                      Trends within the Japanese construction equipment industry
                                       The export sales are booming and the Japanese manufacturers are present on all
                                        growth markets
                       Sales
                                       Domestic sales show slightly increasing and are expected to continue in the near future
                                       Sales are expected to increase even more on many Asian markets

                                       Japanese overseas construction machinery production keeps high level but has been
                Globalization           shifted from US and Europe to Asia and Oceania region
                                            China and Southeast Asian market lead the increase of overseas production

                                       OEMs require long term relation for product development
                    Competition            Strong parts and system vendors exist in Japan
                    and success
                      factors              OEMs expect frequent communication for technical issues
                                           Local presence by foreign parts suppliers is desirable


                                       Intensive R&D efforts in IT utilization and environmental countermeasure
                     R&D trend              GPS + IT technologies for a remote control and management systems
                                            Technology for less emission and less noise

                                                                    59
Source: STC Tokyo
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

             Japanese Construction Equipment Industry

             Recommendations

             References




                           60
RECOMMENDATIONS FOR MAKING BUSINESS WITH THE JAPANESE
AUTOMOTIVE & CONSTRUCTION EQUIPMENT INDUSTRY
- Japan is a competitive market but a break through in Japan ensures
        your success in global market
Country specific
      1.            Proven industrial recovery from 2004 after the long slump for over 10 years

      2.            Globalization enlarges business opportunities for foreign companies

      3.            High business cost and slow decision making at Japanese counterparts

Industry specific
      1.            Aiming at a competitiveness in performance, cost and delivery stableness

      2.            Involvement in product development process in early stage in automotive sector

      3.            Conservative attitude to buy domestic parts in construction equipment sector

                                                  61
CONTENT



             Overview Japanese Manufacturing Industry

             Japanese Automotive industry

             Japanese Construction Equipment Industry

             Recommendations

             References




                           62
STC PROVIDES SUPPORTS IN ALL BUSINESS DEVELOPMENT PROCESS
 Country specific

 Market Check       STC analyzes customers and competitors segment to evaluate market potential and target customers


  Distribution      STC studies purchasing behavior of the market for establishing the best performing distribution channel
    search


                    STC conducts customer acquisition activities to the potential customers in the target sector :
   Customer                 Product and technology introductory seminar at Swedish Embassy ,Tokyo
   Aquisition
                            Coordination of individual business meetings with target potential customers


                    STC conducts sales representative activities for medium and small enterprises in Sweden:
  Taking over               Marketing and order reception
     sales                  Delivery and inventory control
                            Handling of quality claims as well product development projects


   Company          STC supports Swedish companies to establish local company through relevant legal process
 establishment


     BSO            Business Support Office (BSO), the subsidiary of STC Tokyo, provides variety of services for Swedish
    Service           companies to smooth its daily business activities

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STC TOKYO HAS HELPED NUMEROUS SWEDISH COMPANIES TO
DO BUSINESS WITH THE JAPANESE AUTOMOTIVE AND
CONSTRUCTION EQUIPMENT INDUSTRY
             COMPANY      PROFILE

                          Provider of copper products for
                          heat exchangers and supplier to the
                          leading heat exchanger
                          manufacturers in the world.
                          Manufacturer of seat heating
                          systems and gear shit systems for
                          automobile mobile applications

                          Manufacturer of precision spools
                          that is a core component for a
                          hydraulic control valve assembly

                          Provider of the most advance
                          remote eye tracking system to be
                          implemented in driving safety
                          solutions


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STC CARRIED OUT AN MARKET ANALYSIS AND AN IN-DEPTH
CUSTOMER ACQUISITION AND LEADS GENERATION FOR KARLSSON
                            Goal                                                              Outline of project
The main objective of the project was to support Karlsson
in creating the position on the Japanese market and to
initiate sales
                                                                                                Step1: Market analysis           
                                                                                                                              Completed
                                                                          Kick-Off        • Customer analysis
                                                                                          • Competitor analysis
                STC role and contribution
• A market and customer segment analysis
                                                                                             Step 2: In-depth customer
                                                                                                   acquisition
                                                                                                                                 
                                                                                                                              Completed
   o Evaluate market potential and recommend interesting segments        Workshop I
     and companies to initiate business discussions                                       • In – depth business discussions
• In-depth customer acquisition and leads generation within                                 with selected customers from step1
                                                                                          • Sales and marketing support
  recommended segments
• Carrying out of business meetings with potential customers                                    Step3: Sample delivery
• Development of a business plan for Japan                               Workshop 2
                          Results                                        • At the kick- off the team from the STC Tokyo was educated and
                                                                           the project outline was discussed
• Karlsson had identified 10 potential customers                         • At workshop 1 the STC presented the results from step 1 and
• A number of meetings were conducted and ongoing                          gave recommendation for how to approach the Japanese
  business discussions with potential customers                            market
                                                                         • STC Tokyo interacts between Karlsson and potential customers
• Has delivered samples to 3 potential customers
                                                                           for business and technical subjects

                                                                    65
STC CARRIED OUT A NUMBER OF MARKET DEVELOPMENT ACTIVITIES
FOR CUPROBRAZE PROCESS OF LUVATA AB, OVER 6 YEARS IN JAPAN
                           Goal                                                                Outline of project
Support Luvata to initiate the sales of CuproBraze®
process to Japanese heat exchanger manufacturers                  Extensive industry contact
                                                                    and conduct meetings
                STC role and contribution
                                                                                               Development strategy
• Give Luvata a solid understanding of the Japanese                                              for initiate sales
  market for heat exchangers, especially within the heavy-
                                                                                                                      Promotional seminars and
  duty vehicle segment                                                                                                   Exhibition at TMS
• Detailed analysis of decision making system for raw
  material and production system for heat exchangers                                                                         BSO Service
• Making individual contacts with key persons and conduct
  business meetings                                                      Market analysis                          Strategy development
• Conducted a number of promotional seminars                             Trade mark promotion                     BSO service
• Continuous exhibition at Tokyo Motor Show (TMS)
• BSO service and occasional market investigation support
                         Results
 • Acquired a firm position as a premium material
   replacing aluminum in Japanese automotive heat
   exchanger market, continued and increased Japanese
   market presence
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