Mobility Business Sector
In order to quickly seize on business opportunities that arise in the automotive and ICT markets, which are facing a period of major transformation, we will steadily execute strategic investment for growth. At the same time, we will provide new value through the continued development of new customer-oriented products and businesses and through the strengthening of our ability to propose solutions centering on our technological know-how in materials.
Fiscal 2019 Business Overview
Sales by product
Sales by region
Trends in net sales and operating income (¥ bn)
*FY2020 forecasts on an IFRS basis.
Fiscal 2025 target
Operating income of ¥70 bn + new businesses
We will steadily execute strategic investment plans in order to translate the business opportunities afforded by medium- to long-term demand expansion into growth. In addition, in a bid to accelerate the mobility strategy across the entire Group, we have established a Center of Excellence (CoE) Project Office with cross-organizational powers and responsibilities. Leading global efforts for information gathering, strategizing, and business development with these initiatives, we will expand and strengthen existing businesses and provide speedy and optimal solutions to customers.
- In existing businesses, we intend to steadily execute and secure returns from investments to which we have already committed, while also pushing ahead with considerations for the next phase of capacity increases. We are also aiming to further expand these businesses by continually bringing to market new differentiated products.
- We will work to enhance our product portfolio in the Mobility domain by addressing demand for multi-material solutions, establishing technology for fiber-reinforced composite materials, and expanding customer support functions.
- We aim to promote new business development in new markets and facilitate a shift towards downstream processes and services by anticipating customer needs through open innovation and collaboration.
- For polymer product lines that require large-scale production facilities, we will aggressively invest in further strengthening our competitive advantage by expanding production capacity in optimal locations to meet global demand growth.
- For compound products, we will continue to strengthen our customer-oriented global supply system by expanding production capacity in a timely manner to ensure local production for local consumption.
Challenges of automotive industry and lighter car bodies
Growth in polypropylene (PP) compounds and other automotive parts
Environmental regulations and rise of EVs are making vehicles increasingly lighter
Reducing the amount of CO2 emissions in order to prevent global warming is a challenge for the automotive industry today, and realizing lower fuel consumption in vehicles lies at the heart of this issue. To that end, automakers need to make car bodies much lighter too. At the same time, powertrain electrification and the shift to electric vehicles are also making cars lighter so as to improve cruising range.
Many automobile manufacturers are now making the switch from traditional metal parts and components to those made from plastics as a means to realize more lightweight vehicles, and this shift is expected to further accelerate.
Pursuing top global share
Growth and expansion of PP compound business
The Group’s automotive material PP compound business boasts the second-highest global share and the top share in Asia. We also maintain a leading share among Japanese automakers, while in North America we already hold a share of roughly 30%, having received a high evaluation and built a solid track record supplying compounds to US auto manufacturers.
PP compounds are materials that enhance impact resistance and rigidity because other polymers and additional agents, such as elastomers and talc, are added to polypropylene, which has superior moldability. Currently, around 50–60 kilograms of PP compounds per car are used to make components such as bumpers and instrument panels.
Our superior proprietary compound recipes and the know-how to design the resins, or in other words the raw materials, have enabled the Group to provide high-quality products meeting various customer needs. And that is why we have been rated very favorably. Moreover, we have built a system capable of quickly accommodating the global strategies of automobile manufacturers, by maintaining eight production sites and six R&D sites in key regions around the world. In the past our share of the market in Europe was not high; we, therefore, have taken steps to expand our business there by setting up a development site. We expect sales in Europe to increase as a result of these initiatives, and thus began commercial operation of a newly built in-house production site in the Netherlands in June 2020.
In order to tap demand in the growing Asian market, we have also been pushing ahead with plans to expand capacity at our production sites in Thailand and India, and concluded expansion work at the Thai site in June 2020. Up ahead, we aim to further consolidate our business drawing on our technological superiority and supply capabilities. To this end, we will make sure to identify growth markets and augment production capacity in order to meet demand growth and increased market share.
Further initiatives for metal alternatives
Glass fiber-reinforced polypropylene
Glass fiber-reinforced polypropylene (GFPP) is a compound material made by impregnating fibrous glass with polypropylene resin. It is lightweight and strikes the right balance between rigidity and impact resistance because of the long glass fibers, and increasingly adopted for use in the rear doors of cars as a replacement for metal. Our GFPP also has a nice appearance, which helps shorten the manufacturing process at automakers because it can be used without being coated. Given the growth in global demand for lighter materials, auto manufacturers are examining whether they can use other materials to replace the metal components in other parts of the car, like sliding doors, on top of rear doors. Fiber-reinforced resins are certainly a strong candidate. GFPP in particular costs less to make than carbon fiber, which is why demand is expected to increase in the future. We have built a solid three-pronged global production framework consisting of sites in Japan, China, and the US that will enable us to meet growing demand for lightweight materials globally.
TOPICS - Increasing applications for cyclic olefin copolymer APEL™
APEL™ is a proprietary cyclic olefin copolymer (COC) that integrates the performance of polyolefin resins and that of amorphous resins. With the highest refractive index among the amorphous polyolefins, it is low in optical anisotropy and essentially low in birefringence. These superior optical properties make it ideal for high-transparency optical lenses and optical components, and it has been well received. Sales are currently expanding for the main application of smartphone camera lenses, and owing to a rapid increase in demand for APEL™ on the back of an ongoing rise in the number of cameras in smartphones, we have begun constructing a new plant at our Osaka Works (Takaishi City, Osaka Prefecture) to create a supply structure that can accommodate this demand. Construction began in April 2020, and is scheduled to be completed in March 2022. We estimate that the resulting increase in production capacity of approximately 50% will enable us to meet near-term demand expansion. However, APEL™ is used in a broad range of applications, including automotive camera lenses (used in sensing cameras, surround view cameras, dashboard cameras, and rear-view monitors, etc.), head-up display components (such as focusing lenses and combiners), and optical components in AR/VR devices. Applications are also increasing in areas such as food packaging and medical packaging to take advantage of excellent moisture-proofing, chemical resistance, and non-attachment characteristics. As we expect demand to grow further in the future, we have also begun considering the next phase of capacity expansion. In these ways, we are aiming to grow this business by steadily creating a supply system that can meet increasingly diverse applications and rapidly expanding market needs.