Global Cases

A group of professionals manufacturing cars and car parts worldwide

Japan / Mexico / China / India / U.S.A. / Thailand / Indonesia / Korea

Full-scale entry into manufacturing business in the late ‘90s

In the automotive business, manufacturing sits in the upstream part of the value chain. Having been engaged in the export of automotive parts and plant equipment made by Japanese manufacturers, Sumitomo Corporation started to make extensive investments in parts and completed cars to enter the global automotive manufacturing sector in the late 1990s. The goal was to create greater added value in the automotive field in light of industry trends and needs.

The first major challenge was Hirotec Mexico (originally Aventec), a joint venture established in Mexico with car-parts manufacturer Hirotec based in Hiroshima, Japan. Hirotec Mexico started to mass-produce body parts, such as doors and bonnets, for GM in 1998. Later, in 2014, the company began mass production of body parts and exhaust system parts for Mazda. Today, with 1,300 employees and a new plant completed in 2017, Hirotec Mexico is further expanding both its customer base and production scale.

Hirotec Mexico is a pioneer among Japanese car parts manufactures operating in Mexico

Acquisition of a parts manufacturer and investment in completed vehicles manufacturer

In 2004, Sumitomo Corporation acquired Kiriu Corporation, an established cast car parts manufacturer founded in 1906, and made it a wholly owned subsidiary of the Sumitomo Corporation Group. Becoming a member of the group further accelerated the global operations of Kiriu, which had three sites outside Japan, expanding its customer base worldwide. Currently, Kiriu operates a total of nine overseas plants in China, ASEAN, India, and North and Central America.

In recent years, Sumitomo Corporation has been investing in a completed cars manufacturer. In 2011, we set up Mazda de Mexico Vehicle Operation (MMVO) in Mexico in partnership with Mazda Motor Corporation. MMVO's plant started operation in 2014, manufacturing Axela, Demio, and other Mazda-brand cars, which are sold primarily in North America and Europe. The plant has more than 5,000 employees and annual production capacity of 250,000 cars, making it Mazda's largest site outside Japan.
Kiriu plants in and outside Japan boast high productivity and quality
In India, Sumitomo Corporation is engaged in manufacturing and distribution of commercial vehicles through SML ISUZU as the company's largest shareholder. Under cooperation by local management team and managements provided by Sumitomo Corporation, SML ISUZU manufactures trucks and buses for sale across India, a country undergoing rapid economic development, as well as for export.
SML ISUZU's latest model unveiled at Auto Expo 2018 in India

Frontline-oriented hands-on culture

The automotive manufacturing business is distinctive in terms of its method of pursuing growth together with companies, rather than just providing them with funds. Personnel from Sumitomo Corporation address business issues in cooperation with the companies' management or by themselves and get involved in production. By respecting the skills and styles of frontline professionals while working with them for the evolution of manufacturing, Sumitomo Corporation has nurtured a hands-on culture in its manufacturing business.

Another characteristic is agile cooperation with other automotive-related sections within the Sumitomo Corporation Group. In Mexico, we have put in place a supply flow to complete the value chain between businesses within our Group. This involves procuring steel sheets from the steel service center as our steel processor and supplier, manufacturing parts, and delivering them to completed cars manufacturing plants. We also set up the Automotive Manufacturing Related Business Working Group comprising more than 100 employees from business units and divisions across the Company to share information and strategies and actively discuss specific business operations. Outside Japan, we are deepening cross-organizational collaboration and proactively sharing information and exchanging opinions to do business in the way best suited to each country or region.

Solving issues with local personnel at frontline of manufacturing

Seeking manufacturing business in a new era

The world's automobile industry is said to be undergoing a once-in-a-century transformation. There are ever-increasing number of electric vehicles (EVs) on the road and next-generation vehicles, such as self-driving cars and connected cars, are being developed for commercialization. In light of such big changes in the industry, Sumitomo Corporation is aggressively experimenting with new initiatives to create new business models for the next phase. To take an example, we invested in a new US-based EV manufacturer, Rivian Automotive, which aims to build a new integrated mobility platform encompassing all functions from upstream through downstream (planning, development, production, sales, use, and service) for a new age of mobility. Through its investment, Sumitomo Corporation aims to establish a solid business base in the new field.

Investing in Rivian Automotive for a new age of integrated mobility

March 2018

Keyword

  • Transportation & Construction Systems Business
  • Japan
  • East Asia
  • Asia and Oceania
  • The Americas
  • Transportation

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