Denso to invest $1 billion in North America in next four years

Article by Anita Panait, on January 22, 2013

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.

Last year, Denso Corp. executive Norihiro Imai entered a deal with the US Department of Justice to serve more than one year in prison and pay a fine of $20,000. The deal is part of a plea agreement for his role in rigging bids for heater control panels. Imai went before the US District Court in Detroit and plead guilty to one felony count of price fixing. He was sentenced to serve in a US prison for one year and one day.

Investigations showed that Imai got involved in a conspiracy with unknown co-conspirators to rig bids as well as to fix, stabilize and maintain the prices of heater control panels that are marketed in the US and in other markets. The Department of Justice said the conspiracy commenced in August 2006 and continued until June 2009.

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Topics: denso, north america

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