TOKYO -- Japanese electric wire manufacturers are shifting their production and investment into high gear in Asia as they prepare for growth in the region’s electric vehicle market.
SWCC Showa Holdings will invest about 700 million yen ($6.5 million) to relocate and integrate two plants in China. The company will also establish a system to develop, manufacture and sell EV cables through Jaxing Showa Interconnect Products, its Chinese subsidiary.
Japanese wire makers are keen to expand sales elsewhere in Asia as automobile electrification takes off and Japan's auto parts suppliers shift their own production bases.
Jaxing Showa's two existing plants, which currently make products like copper wire for consumer electronics, will be combined into a new plant that is scheduled to go online in July 2020. The new plant will be double the size of the existing two factories' 10,000 sq. meter area, and will include automated facilities to increase productivity.
The company's sales totaled about 4 billion yen in fiscal 2017. SWCC Showa aims to lift the Chinese subsidiary's profits by improving logistics.
According to Fuji Keizai, a Tokyo-based research company, EV sales in China are expected to roughly quintuple to about 2.46 million vehicles in 2035, compared with 2017.
SWCC Showa’s current mid-term management plan calls for increasing the company’s operating profit by 5% to 7 billion yen in fiscal 2022, compared with fiscal 2018. The company believes this target is achievable thanks to its EV-related business expansion.
In Southeast Asia, meanwhile, Hitachi Metals is building its capacity to produce wire for electric parking brakes in Vietnam and Thailand.
The company will expand production capacity at its existing plants and build new facilities during the first half of fiscal 2020. It plans to supply EPB wire primarily to Japanese auto-sector manufacturers in Southeast Asia.
It will also open new production facilities at its plant in Hai Duong Province in northern Vietnam and beef up the capacity of existing facilities at its plant in Ayutthaya, north of Bangkok.
EPBs do not require conventional mechanical levers, making it possible to more effectively use space around the driver’s seat. Hitachi Metals is rushing to expand local processing in anticipation of growing demand for EPB wire in Asia.
In Vietnam, Furukawa Electric will also invest about 3.5 billion yen to quadruple its existing local plant’s capacity to produce aluminum wire for automobiles. A new building will go online in September 2020.
Furukawa Electric intends to cash in on increasing demand due to greater use of aluminum in EVs to make them lighter.
Many Asian countries are promoting EVs under government initiatives. The Chinese government is promoting the spread of ecologically friendly cars like EVs the help address environmental problems due to auto emissions.
The Thai government is also pursuing "Thailand 4.0," a policy to upgrade the nation’s industries. Next-generation automobiles such as EVs have a prominent place in the place.
There are also moves to establish charging infrastructure for EVs in Asia, which is also encouraging Japan's electric wire makers to expand their operations in the region.
In Vietnam, for example, conglomerate Vingroup and state-owned oil company PetroVietnam are separately building charging stations.