Aisin Seiki Co., Ltd. History

Company Perspectives:

At the core of diversified operations at Aisin Group, Aisin Seiki strives for a creative evolution of new businesses for a global company. Capitalizing on its established excellence in technological development, quality assurance, and manufacturing, Aisin Seiki is perpetually evolving and expanding into new business areas. With dynamism, innovation, and creativity, which are also at the core of the Aisin management philosophy, we strive to grow as a global company, a company that interconnects with various communities and is actively involved in environmental preservation.

Key Dates:

1943:

Kiichiro Toyoda establishes the Tokai Aircraft Company.

1945:

Tokai begins manufacturing sewing machines and automotive parts.

1949:

The firm changes its name to Aichi Kogyo Company.

1965:

The company merges with Shinkawa Kogyo Co. Ltd. to form Aisin Seiki Co. Ltd.

1970:

Aisin U.S.A. is formed.

1979:

The Elite Sewing Machine Manufacturing Company is established in Taiwan.

1988:

Aisin U.S.A. Manufacturing Inc. and Aisin America Inc. are created to strengthen U.S. operations.

1992:

Aisin America merges with Aisin U.S.A. to create Aisin World Corp. of America.

1997:

A fire destroys an Aisin brake plant in Japan.

2001:

Advics Co. Ltd. is established to oversee worldwide brake systems sales.

Company History:

Aisin Seiki Co., Ltd. is a leading international manufacturer and supplier of engine-related products, drivetrain-related products, brake and chassis-related products, and various other automotive parts. The company also manufacturers environmentally friendly vacuum pumps and industrial cooling systems. Through its Creative Lifestyle Products division, Aisin sells beds, furniture, fabrics, medical instruments, gas engine drive heat-pump air conditioners, and housing equipment such as microcomputer controlled shutters and high-tech toilet seats. Overall, the company has over 100 subsidiaries that operate in North and South America, Europe, Asia, and Oceania. Aisin's automotive segment accounts for nearly 95 percent of company sales, while its creative lifestyle and energy and environment products make up the rest. Toyota owns approximately 27 percent of the firm.

1940s Origins

In 1943, Aisin was founded as Tokai Aircraft Company by Kiichiro Toyoda, the founder of the Toyota Group. Tokai Aircraft was founded to manufacture engine parts for World War II aircraft. In 1945, at the close of the war, Tokai Aircraft switched its production to sewing machines and automotive parts, both products that had been in short supply during the war. In 1949, Tokai Aircraft Company changed its name to Aichi Kogyo Company. This company then merged with Shinkawa Kogyo Co. Ltd. in 1965 to form Aisin Seiki Co. Ltd.

International Growth Begins: 1969

In the 1950s and 1960s, Aisin's operations were confined to Japan. As part of the Toyota Group, Aisin grew steadily, supplying parts to its parent automotive company and continuing to produce sewing machines. During the year 1969 and throughout the 1970s, however, the company pursued aggressive international growth. In 1969, Aisin reached a technical agreement for power-steering gears with Zahnradfabrik Friedrichshafen of West Germany. Aisin-Warner Limited was also established as a joint venture in 1969.

Aisin U.S.A. was formed in 1970, and in 1971 Aisin Europe was established in Belgium. A technical agreement for bumper shock-isolators was concluded with Menasco Manufacturing Company in the United States in 1972. The formation of Aisin (U.K.) Ltd. and Aisin (Australia) Pty. Ltd. also took place in 1972. The Liberty Mexicana subsidiary was formed in Mexico in 1973, and Aisin do Brasil was established in Brazil in 1974. The year 1977 saw the formation of Aisin Asia in Singapore, and in 1978 Aisin Deutschland was established in West Germany. Finally, in 1979, the Elite Sewing Machine Manufacturing Company was established in Taiwan as a joint venture.

Aisin U.S.A. was established to import aftermarket auto parts for imported cars--mostly Toyotas--in the United States and also to import specially prepared aftermarket parts for U.S.-made automobiles. In 1990, Aisin U.S.A. imported twice as many parts for American cars as for imported cars. At the same time, Aisin Seiki Company supplied a wide range of products worldwide through its network of 14 overseas subsidiaries and its branches in North America, Europe, Southeast Asia, and throughout the Pacific. In 1989, only five percent of Aisin's sales had been to export markets.

After World War II, the Japanese economy grew steadily. The increase in individual consumption brought about a sharp rise in domestic demand and business expanded. Aisin answered the increased demand for consumer production and worked consistently to improve efficiency in its factories, increase sales, and cut costs through rationalization.

Managers of the automotive sector worked during the late 1980s to increase sales of automotive-body products such as seat components, sun-roofs, and electronic control equipment for automatic transmissions. This increase contributed to an almost ten percent sales growth in 1989. At the time, automotive-body products were the largest single group of products Aisin Seiki offered, comprising about 25 percent of sales.

By 1990, Aisin's home and industrial and the new business sectors were still very small in scale but growing rapidly. Through expanded sales of gas heat-pump air conditioners and beds, sales increased 14.2 percent in 1989. Into the 1990s, intensive research and development continued in new products such as cryocoolers, Stirling engines, and a supplemental drive unit for artificial human hearts.

Continued Growth: Late 1980s-90s

During 1988, Aisin made efforts to strengthen project development in the United States by separating the manufacturing division from Aisin U.S.A. and creating a new subsidiary, Aisin U.S.A. Manufacturing Company. Aisin America, Inc. was also established to control jointly both the manufacturing and sales divisions. Then, in 1992, Aisin U.S.A. was merged with Aisin America to form Aisin World Corp. of America.

During the majority of the 1990s, Aisin continued its growth strategy and expanded internationally as it had during the previous decade. Subsidiaries were created in Indonesia and Mexico, along with a brake system research and development center. Disaster struck in 1997, however, when a fire destroyed an Aisin brake factory in Japan. The plant supplied Toyota with almost 90 percent of its major brake parts that were used in nearly all Toyota models. Overall, the fire cost Toyota $195 million and forced the car maker to shut its 18 assembly factories in Japan for almost a week due to lack of parts.

The fire also threatened Aisin's supplier relationship with Toyota. In the case of Aisin, Toyota had been going against its policy of double-sourcing materials, in which the firm typically chose two suppliers to split orders evenly. A Toyota spokesman commented in a March 1997 Automotive News article, "Do we really source from them because of economic or technical features, or are there other reasons, like relying on our long history?" In the long run, the fire did not change the company's alliance and Aisin proved its commitment to safety and quality when later that year, its plants became QS9000 and ISO9001 certified.

Just after the fire, the economy in Japan began to falter, decreasing demand in Aisin's home country. Domestic sales in 1999 fell to ¥747 billion, down from ¥766 billion in 1998. Aisin responded by cutting costs, restructuring various operations, and expanding into growth markets. Domestic sales rebounded in 2000, growing to ¥847 billion, and then again in 2001 to ¥904 billion. That year, total net sales climbed to ¥1,128 billion.

Aisin proved its relationship with Toyota stood strong when in 2001 it formed a partnership with Toyota Motor Corp. along with Sumitomo Electric Industries Ltd. and Denso Corp. to form Advics Co. Ltd. The new company was positioned to become the second-largest supplier of brake systems in the industry behind Robert Bosch GmbH, with projected global sales reaching $2 billion by 2005. Toyota, of course, was the new firm's largest customer.

Aisin management's long-term strategy included strengthening its auto parts business along with finding new opportunities for its creative lifestyle segment. The company also focused on increasing its production efforts in North America, Europe, and Asia. Looking to globalization and technological developments as key to its future success, Aisin appeared to be well on track to maintain its strong position in the automotive sector.

Principal Subsidiaries: Aisin Holdings of America Inc. (U.S.); Aisin Personnel Service Inc. (U.S.); Aisin World Corp. of America (U.S.); Aisin U.S.A. Mfg. Inc.; Aisin Electronics Inc. (U.S.); Aisin Drivetrain Inc. (U.S.); Aisin Automotive Casting Inc. (U.S.); IMRA America Inc. (U.S.); Intat Precision Inc. (U.S.); ATTC Manufacturing Inc. (U.S.); AW North Carolina Inc. (U.S.); Liberty Mexicana S.A. de C.V.; Aisin do Brasil Ltda.; Aisin Europe S.A. (Belgium); Aisin Asia Pte. Ltd. (Singapore); Siam Aisin Co. Ltd. (Thailand); Aisin Hongda Automobile Parts Co. Ltd. (China); Elite Sewing Machine Mfg. Co. Ltd. (Taiwan); Aisin Takaoka Co. Ltd.; Aisin Chemical Co. Ltd.; Aisin AW Co. Ltd.; Aisin Development Co. Ltd. Advics Co. Ltd.

Principal Competitors: Delphi Automotive Systems Corporation; Continental AG; TRW Inc.; Robert Bosch GmbH.

Further Reading:

• "Japan's Aisin Forms Autoparts Joint Venture in India," AsiaPulse News, July 19, 1999.
• "Japan's Aisin Seiki, Hitachi Air Tie Up in Gas Heat Pump Equipment," AsiaPulse News, October 4, 2000.
• Treece, James B., "Just too Much Single-Sourcing Spurs Toyota Purchasing Review," Automotive News, March 3, 1997, p. 3.
• Wilson, Amy, "Japan Venture's Goal: Big 3 Brake Systems," Automotive News, March 18, 2002, p. 16.

Source: International Directory of Company Histories, Vol. 48. St. James Press, 2003.