“With regards to the supply chain, we expect it to have a positive economic impact,” a spokesman for the company told Automotive Logistics News.
Speaking at the Detroit Auto Show last week, Terry Helgesen, senior vice president of Industry Relations at Denso International America, said that while localisation was part of Denso’s “operating philosophy” since entering the market, the impact of the rising yen had “sped up the process” of making more products in the North American region.
The fifth largest automotive supplier in North America in 2011 (and second globally), Denso already has 26 manufacturing facilities in the US, Canada and Mexico, employing 14,000 workers at 28 consolidated companies there. It now plans to expand existing product lines, add the manufacture of new products and increase research and development. This is part of an investment of more than $750m in the US that will include developments in Michigan, Iowa, Tennessee, California and North Carolina. It will add a further 2,000 jobs across the region, 1,200 of them being in the US.
The company is investing $150m in facilities in Michigan that includes production of radiators, condensors and HVAC unit production at the Battle Creek facility. At its Athens facility in Tennessee it is investing $50m in localising gasoline direct injection parts and increasing monolithic carrier production. It is also adding a new assembly and warehouse facility in Urbandale, Iowa to support customers in the heavy-duty sector, with an investment of $500,000. Denso also has plans to invest $120m in North Carolina.
In Canada and Mexico the company is also investing nearly $150m to increase manufacturing capacity.
“Last year we announced that Denso will drastically localise product in the regions in which we operate,” said Helgesen. “Not only are we making products in North America, but we’re also localising critical tooling.”
The company has dedicated a building at its manufacturing facility in Maryville, Tennessee as the regional headquarters for making machinery and dies but has said it will be manufacturing machinery in the other locations as it moves ahead with its plans.
“Growth over the next few years will be tremendous,” said Jack Hemboldt executive vice president at Denso Manufacturing, Tennessee. “Not only does our investment represent a localisation of technology, Denso is also investing in making the lion’s share of our equipment and dies here, as opposed to importing them from Japan.”