DaikyoNishikawa Corp. is a little-known name in the U.S. auto industry. But the Japanese plastics supplier is part of a new wave of investment coming into the Southeast on the heels of Mazda Toyota Manufacturing USA in Huntsville, Ala.
DaikyoNishikawa is spending $110 million on a plant in Huntsville to supply large resin parts, such as bumpers and instrument panels, for Mazda and Toyota when vehicle production starts in April 2021.
It is a significant plant investment for a supplier that has no other U.S. footprint. And it signals an emerging opportunity for industry investment in the region — the return of Mazda to U.S. manufacturing.
One big reason the Mazda-Toyota joint venture went to Huntsville was so that the project could take advantage of a proven Toyota supply base that has developed in the region over the past 30 years, in Alabama, Tennessee, Kentucky and Mississippi.
But a Mazda supply base? That's a different equation.
Mazda Motor Corp. was part of the great wave of Japanese automakers that invested in North America in the 1980s, bringing their favored Japanese suppliers in tow to launch U.S. parts plants. But Mazda withdrew from its only U.S. production venture, in Flat Rock, Mich., in 2012 and has not needed U.S. parts suppliers since then.
Now it does.
DaikyoNishikawa, headquartered in Hiroshima and partly owned by Mazda, was one of the first suppliers to announce a U.S. investment to support the $1.6 billion Mazda-Toyota project. Several others have followed, including chassis and structural metal components supplier YKTA; interior, filtration and powertrain components supplier Toyota Boshoku; plastic-injected parts and subassemblies supplier Vuteq; and tubing and chassis parts supplier Sanoh.
Suppliers have brought a total of $440 million in new capital investment to the immediate area, representing more than 1,600 new jobs, according to the Alabama Department of Commerce.
"We worked to make a compelling case that Alabama offered a location that could contribute to their success, where they could be competitive," said Steve Sewell, executive vice president of the Economic Development Partnership of Alabama.
Both Alabama and Tennessee are making pitches for supply base locations — the Tennessee state line is just 40 miles north of the auto plant site.
DaikyoNishikawa primarily supplies plastic interior, exterior and engine parts to many of the major automakers based in Japan, including Mazda. This will be the first time the company supplies to Toyota, said Douglas Vanata, DaikyoNishikawa US plant manager. DaikyoNishikawa has production plants in Mexico, Thailand, Indonesia and China, but the Alabama venture is its first in the States.
Vanata said the company is focused on getting up and running and has no plan to pursue other automakers. DaikyoNishikawa will need to learn the art of serving two customers on one project. The Mazda-Toyota plant will build different vehicles for each automaker.
Some of the supplier's parts will be produced in sequence, with a two-hour lead time and only 12-minute gaps between shipments, Vanata said.