TOKYO - Denso Corp. wants to ascend the ranks of the world's biggest auto-parts suppliers, in part by raising the number of parts categories in which it is the global sales leader.
Denso may make more acquisitions in Europe, but is unlikely to buy other Japanese parts makers, President Hiromu Okabe said.
'I regard the top position in industry rankings as absolutely essential for our company. I believe that about three companies will set the pace for our industry,' he said during a speech at the Foreign Correspondents Club of Japan.
Okabe said Denso has no target to reduce the 50 percent of its sales that go to Toyota Motor Corp., which owns 24.7 percent of Denso. Because Toyota is still growing globally, he said he considers Denso's heavy exposure to Toyota a plus.
LOST TOP RANK
The Japanese auto-parts giant once was the world's largest parts maker. But rising sales by German rival Robert Bosch GmbH and the emergence of General Motors' Delphi Automotive Systems and Ford Motor Co.'s Visteon Automotive Systems has knocked Denso aside. The company ranks No. 4 in the Automotive News ranking of the world's largest suppliers of original equipment parts.
Denso is the top seller of 12 parts categories. Okabe wants to boost that to 19 by 2005, by moving up from the No. 2 or 3 spot in wipers, oxygen sensors, idling speed control valves, pressure sensors, radiators, injectors and traction inverters for electric vehicles.
The drive for market share would not come at the expense of profits, Okabe implied. He said that in 2000 Denso will introduce an accounting system to monitor net return on investment in each product sector globally. The goal: a 10 percent return on investment by 2005.
Okabe said Denso's manufacturing networks in Asia and North America are well established. 'We are now moving rapidly to expand and upgrade our operations in Europe,' he said.
There, Denso recently purchased the starter-alternator business of Italy's Magneti Marelli S.p.A. Future acquisitions are possible because they allow Denso to quickly expand in Europe, Okabe said. He called it 'buying time.'
On the other hand, he ruled out acquisitions just as a means of pushing Denso's market share for certain components to the No. 1 spot. Denso would prefer to gain share by offering technically unique products, he said.
Okabe also said he saw 'no need' to buy a Japanese parts maker, citing Denso's already 'wide product line.'
'We don't see much merit' in buying Nissan suppliers, he said. Nissan has said it is willing to sell its stake in all but four of its almost 1,394 affiliates.