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Business trends

Japan's materials makers see gold in fast-changing auto sector

Mitsui Chemical, Asahi Kasei and peers tap expertise in car parts design

Japanese materials maker Asahi Kasei and electric vehicle startup GLM have jointly developed the AKXY concept car. (Photo by Ken Kobayashi)

TOKYO -- Japanese materials makers such as Mitsui ChemicalsToray Industries and Asahi Kasei, long viewed as lowly subcontractors in the automotive industry, are using their expertise in parts design, molds and advanced plastics to push automakers for a front seat in the development of electric and hybrid vehicles.

Mitsui Chemicals acquired ARRK, a well-known car chassis designer and mold maker, in January for about 30 billion yen ($274 million). Mitsui made the hefty bet on a business well outside its field of expertise, because the chemical company "can no longer survive solely by selling raw materials," President and CEO Tsutomu Tannowa said.

Executives from Honda Motor have been quietly paying visits to ARRK's headquarters, tucked away in a mostly residential corner of a city in Saitama Prefecture, northwest of Tokyo. In a spacious room with a high ceiling on a lower floor, ARRK uses Honda designs to sculpt models of new vehicles from reddish-brown clay, a process that takes three days and nights.

ARRK also runs detailed simulations on heat and vibration in car bodies and components as well as on qualities such as reflectivity, together with a team of around 1,000 engineers in Germany. Design orders have poured in from international automakers including Germany's BMW.

As new technologies such as electric vehicles and autonomous driving transform cars, ARRK is participating in reimagining automobile design from the ground up.

Mitsui Chemicals, which makes plastics used in bumpers and other autoparts, offers products that typically are similar to other companies' offerings. However, a strategy of simply sitting and waiting for orders from parts makers puts the company at risk of losing out to competitors with cheaper products.

So the company decided to "access the furthest upstream point in automaking" through ARRK, said Takayoshi Shimogori, a senior managing executive officer at Mitsui Chemicals. It aims to beat rivals to the punch in developing materials for cars of the future.

Toray is another established parts maker that has become "a highly demanded presence," in the words of Yukio Ishino, director of automotive material strategic planning. "Automakers are rethinking everything, starting with materials."

High-ranking officials from major carmakers have visited the chemical company's automobile materials development hub in Nagoya frequently since last year, seeking Toray's expertise in designing and manufacturing parts with advanced materials. In-person visits from such high-ranking people used to be rare for Toray.

For automakers seeking to develop more lightweight and electric cars, Toray offers diverse knowledge of materials including plastics, carbon fiber and films. Its expertise includes using plastics in place of carbon fiber and substituting lighter, layered films in place of metals.

Especially attractive to automakers is Toray's market leadership in polyphenylene sulfide (PPS) products. Fiber and plastic made with the polymer are not only lightweight, but some can withstand temperatures as hot as 200 C. This makes PPS well-suited to electric vehicles because some of their parts run very hot, including the lithium-ion batteries and other electrical components.

The polymer is in high demand for wires that wrap around motor coils, as well as insulating materials and films for electrical parts. The average gas-powered car uses about 900 grams of PPS materials, but heavier electric and hybrid cars use up to 2-3kg.

Asahi Kasei wowed Toyota Motor officials last year when it unveiled a concept electric car it developed with GLM, a Kyoto University-linked company that makes environment-friendly vehicles. The car incorporates 27 products using Asahi Kasei technologies and materials, including high-performance plastics and semiconductors.

The concept car also includes original technologies, including sensors that detect the driver's pulse without physical contact and monitor the in-car atmosphere.

"We have the edge in terms of knowing exactly what material is suited to what component, as well as molding know-how," said Asahi Kasei President Hideki Kobori.

A huge shift in the chemicals sector, including the merger that created DowDuPont of the U.S., is reshaping the auto industry as well. Germany-based chemical company BASF is investing heavily, looking for a greater role in the rapid adoption of electric vehicles in markets such as Europe and China.

Japanese chemical companies aim to compete with their Western rivals not in scale, but in technology. But some wonder if their creativity will fade as artificial intelligence increases its presence in materials development. Competing on the world stage will be difficult if materials makers cannot take an active role in shaping future cars.

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