Automotive News   |   Automotive News Europe   |   Autoweek   |   Automobilwoche

Automotive News China Newsletter
Register our free newsletter, sent each Monday and Thursday

     Automakers   Suppliers   Auto Show   Comment   Car Cutaway   Newsletters   Press Releases   Chinese Version   Register for Newsletter
  Contact Us:   Editorial   Advertising   Subscription Information   |   About Us   Media Kit
Home >> Suppliers Email this story   Print this story
 
U.S. tariff threat jolts Denso as parts giant readies China expansion
Bloomberg | 2018/7/6

Japan's biggest auto-parts supplier is joining the industry chorus warning of disruptions from President Donald Trump¡¯s proposed tariffs on cars and components.

Denso Corp., whose $37 billion market value exceeds Fiat Chrysler Automobiles NV, sees the threat of U.S. tariffs of as much as 25 percent and reciprocal levies from trade partners as a ¡°grave concern,¡± Executive Director Yasushi Matsui said in an interview. The duties are set to hit right as Denso readies an expansion in China, along with a war chest worth at least $9 billion for investments aimed at broadening its business beyond top customer Toyota Motor Corp.

¡°A trade war is not the correct course,¡± Matsui said last week at Denso¡¯s headquarters near Toyota City, about halfway between Tokyo and Osaka. ¡°As long as the rules are free and fair, we have confidence we won¡¯t lose to anyone.¡±

The U.S. will impose tariffs on $34 billion of Chinese goods on July 6 -- unless Trump walks back his hard-line stance -- and China will the same day impose countervailing levies on products including car imports from the U.S.

Trump¡¯s administration is also considering additional tariffs of up to 25 percent on national security grounds, prompting companies from Toyota and General Motors Co. to Continental AG and Magna International Inc. to warn of higher prices for consumers, less investment and fewer jobs. Denso imports parts from Hong Kong, making the possible levies a direct concern.

Nafta Risk
The fate of North American Free Trade Agreement is also a worry because Denso components crisscross the U.S.-Mexico border multiple times, Matsui said, and the company is currently trying to calculate the potential cost should the agreement get torn up.

Escalating trade friction creates a quandary just as Denso considers spending billions of dollars in acquisitions or investments to procure new technologies and skilled staff aimed at strengthening its position in autonomous driving and vehicle electrification.

Denso could pay as much as a trillion yen ($9 billion) ¡°in one shot¡± for the right company, but targets on the scale of tens of billions of yen are more likely, Matsui said. Denso also aims to increase venture investment to as much as 10 billion yen annually, he said.

Denso sees the maturing of automated-driving and EV technologies as a chance to increase its customer base. From near-total dependence on Toyota in those areas now, Denso aims to have 20 percent to 30 percent of business related to automated driving from outside Toyota by 2020, Matsui said.

Related Stories
  • Denso buys 34% stake in Chinese HVAC component supplier
  •     --Published:2014/2/9
     
  • Denso launches output at Yantai compressor plant
  •     --Published:2014/4/2
     
  • Denso to expand, relocate Shanghai tech center
  •     --Published:2012/13/4
     
  • Denso expands into auto parts aftermarket
  •     --Published:2012/4/4
     
  • Denso to relocate Guangzhou plant to larger site
  •     --Published:2011/29/11
     
  • Denso to build tenth air conditioner plant in China
  •     --Published:2010/19/11
     
  • Denso to expand in China even as wages rise
  •     --Published:2010/13/7
     
  • Toyota supplier Denso to expand in China
  •     --Published:2010/9/7
     
  • Denso China plant returns to full operation -worker
  •     --Published:2010/26/6
     
  • Wiring harness makers tied into antitrust investigation on 3 continents
  •     --Published:2010/3/3
     
  • Denso swings to loss in latest quarter
  •     --Published:2009/5/8
     
  • Denso sees huge potential demand for car navigation systems in China
  •     --Published:2009/4/3
     
  • Denso expands software operations in China
  •     --Published:2009/25/2
       
     
     

    Our Newsletter Editions
    Automotive News China produces two email newsletters each week. You can sort your news by the articles highlighted in each of our newsletters here.

    Select your newsletter     

     
     

    Automotive News China
    Room 1303, Building 2, Lane 99, South Hongcao Road,
    Shanghai 200233
    Telephone: 86-139-1851-5816
    Fax: 86-21-6495-0895
     
    Home | Help Center | About Us | Privacy Policy | RSS
    Entire contents © Crain Communications, Inc.
    Use of editorial content without permission is strictly prohibited. All Rights Reserved.
    »¦ICP±¸06057291ºÅ