TOKYO -- Japanese automobile components maker NSK plans to close a series of acquisitions in the next two years, positioning itself to capitalize on the global shift toward the electrification of vehicles.
"With our current financial structure, we can make about 60 billion yen ($548 million) worth of purchases" through the fiscal year ending in March 2019, President Toshihiro Uchiyama told The Nikkei. He acknowledged the need to make up for lost time as part of the reason for the acquisitions.
"We will openly consider any good proposals," he said.
NSK holds the world's second-largest share in electric power steering systems. But the producer specializes in power steering for smaller vehicles, while the industry is trending technologically toward configurations for larger autos. The Japanese company will bridge the gap in talent and expertise through acquisitions.
Brisk auto component sales in China underpin NSK's projected 25% jump in operating profit to 82 billion yen for the current fiscal year. With earnings expected to expand the following year as well, aggregate operating cash flow for fiscal 2016 through fiscal 2018 will likely come to roughly 250 billion yen.
That equates to a yearly average cash flow topping 80 billion yen, far exceeding the company's roughly 50 billion yen figure seen five years ago. Costs associated with price-fixing penalties also are subsiding, providing NSK more funds to direct toward acquisitions.