TOKYO - As Nissan Motor Co. Ltd. shaves its ties with many of its long-standing keiretsu suppliers, it is smoothing the way for closer ties with foreign-based suppliers through 'Nisshokai,' its association of suppliers to Nissan.
'When the Nisshokai was set up some years ago, we stopped giving preference to our so-called keiretsu suppliers,' says Itaru Koeda, Nissan's managing director in charge of purchasing.
The new body is 'a group of members which have business transactions with Nissan and mutually study and exchange information with each other,' according to Koeda. Those exchanges include both technology and personnel.
The rule used to be that a company had to have sales to Nissan - in Japan - of more than ¥1 billion, or about $8.8 million at current exchange rates, in order to join the group.
But the rules changed in July 1998. The required sales level was cut in half, and sales to Nissan anywhere in the world now count toward the target.
The idea was to make it easier for foreign suppliers to join. Until then, only a handful of foreign companies had joined, such as Michelin, through their Japan subsidiaries. Since the changes, TRW and Siemens Automotive have joined the group, bringing the total of foreign-affiliated suppliers in the body to 11.
Tadahiro Shirai, Nissan executive vice president and CFO, predicts that number is likely to increase.