Further Reinforcing Our Future Competitiveness through the Virtual Company System
Recently, the automobile industry has faced extreme changes, driven by technological innovation, such as vehicle electrification, automated driving and the Internet of Things (IoT), and by the entry of IT and other different business sectors into the industry. To increase our capability to respond to such changes and strengthen the unity of the AISIN Group, we launched the Virtual Company (VC) System in April 2017. With President Ihara leading the discussion, the president of each VC and Executive Vice President Mitsuya representing the Group Head Office talked about what specific initiatives are being implemented under the VC System to increase overall competitiveness.
Perception of the Environment Surrounding the VC System and Issues of Each VC
Ihara: Please share your views on the environment surrounding each Business VC and the Group Head Office and describe existing issues.
Ozaki: The demand for automatic transmissions is on the rise, and one issue is how we increase our production capacity while adapting to regulatory changes. Increasingly stringent environmental regulations have been enforced across the world, such as the CAFE*1 standards in the United States and the NEV*2 regulations in China. If these regulations push the trend toward electrification and accelerate the shift to hybrid vehicles (HV), electric vehicles (EV) and fuel cell vehicles (FCV), the demand for the existing automatic transmissions may decline. We have to prepare for that risk as well.
- *1 Short for Corporate Average Fuel Efficiency, the CAFE standards are regulations in the United States, which calculate the average fuel efficiency of each automaker and require the automaker to ensure that its fuel efficiency does not go below this standard value.
- *2 Short for New Energy Vehicle, the NEV regulations in China require automakers to sell a certain number of “new energy vehicles,” including EVs and plug-in hybrid electric vehicles (PHEVs).
Chassis & Vehicle Safety System VC
Ogiso: In the field of chassis and vehicle safety, we are undergoing considerable changes involving electrification, automated driving and connected cars and facing severe competition. As seen in the growing demand for preventive safety technologies to eliminate traffic accidents, needs of the times are changing, requiring us to make a swift response and take up new challenges. On the other hand, mechanical components, such as brakes that safely stop heavy vehicles weighing one or two tons, still remain very important. The entire Group has to make concerted efforts to increase the competitiveness of these products, including adoption measures targeting emerging countries.
Nishikawa: Aisin Seiki and Shiroki Corporation had been “good” rivals, learning from each other for almost 50 years. Recently, however, the competitionwith manufacturers in emerging countries has been intensifying, and the two companies are having a hard time to prevail over the competition, particularly in the field of exterior and functional parts, such as door frames and moldings. Increasing the competitiveness of these existing products is an urgent task. In addition, as the two companies together operate 46 vehicle body bases in and outside Japan with some overlaps in business fields, we also need to increase the efficiency of our supply structure. As for our highly competitive sunroofs, power sliding doors and other system products, which we have only been able to supply to a limited group of customers, we need to enhance our product lineup to provide more choices to customers and push ahead with the development of forward-looking, next-generation products.
ICT & Electronics VC
Uenaka: The ICT and electronics field is seeing the increased use of IoT and artificial intelligence (AI). ICT and electronics will be at the core of the automobile industry in the future, and we need to collaborate with the rest of the Business VCs in taking necessary actions.
Group Head Office
Mitsuya: Business models in the automobile industry have changed dramatically, encouraging many companies operating in different business sectors to enter into the industry. We have to adopt a new way of competing with these companies. Under these circumstances, we need to make moves geared toward the next generation and the generation after that, while securely attaining growth in our existing business fields. To do so, the Group Head Office has to carry out three tasks. One is to look ahead, discuss with the Business VCs what technologies and businesses to invest in from a broader business perspective and set up a structure to provide access to the information necessary for such discussions. The second is to consolidate common resources and operations for better efficiency and use the resulting “surplus” to further refine the existing operations. The third is to reinforce our safety, environmental and quality postures that form the foundation of our management. These are the three tasks the Group Head Office intends to tackle.
Ihara: Is the Group Head Office planning to draw in staff from our 14 Group companies?
Mitsuya: As a first step, about 40 members and 10 members from 14 Group companies of the Managerial Administration Sector were dispatched to Aisin Seiki and Aisin AW, respectively, on April 1, 2017. They are making an “inventory” of businesses at these companies.