Denso International America Inc. will invest around $1 billion in North America in the next four years, the unit of Japanese supplier Denso Corp. disclosed at the Detroit auto show last week. According to Denso, the expansion will include around $750 million in the United States expected to create over 1,200 jobs.
Denso said it would expand production of some current components like radiators and condensers and would also add parts to its lineup in the US. These parts include stop-start starters, high output alternators, inverters for hybrid vehicles, memory-seat modules, and gasoline direct injectors. Denso will also produce its own production equipment, including dies, in North America as part of a plan to reduce imports from its Japanese parent. According to spokeswoman, Denso currently spends "several millions of dollars" annually on dies and other production equipment imported from Japan.
Denso currently employs 15,685 people at 32 plants, R&D facilities and administrative operations in North America. Denso’s $1-billion investments are part of the supplier’s five-year business plan, which entails increasing global revenues at a 7-percent annual rate to ¥4 trillion ($48.49 billion) in the fiscal year ending March 31, 2017, from $38.24 billion in the fiscal year ended March 31, 2012.
This means that Denso’s revenues need to increase faster than global vehicle production, which Denso expects will average 6 percent annual during the period. Denso is aiming to grow 7 percent annually in North America during the period, which would take its revenues in the region to $8 billion. Hikaru Sugi, senior executive director of Denso International America, wrote in Denso's 2012 annual report that the supplier seeks to develop "world-first products” originating in North America