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Shaping the future of the automotive industry

Flag USA Flag JAPAN
Interview - July 17, 2019
MITSURU IWAO, PRESIDENT OF KEYLEX CORPORATION
MITSURU IWAO | PRESIDENT OF KEYLEX CORPORATION

During the 70’s and 80’s, Japan was the leading manufacturing force of the world. In the era of mass production however, regional rivals who copied and replicated its manufacturing processes at a cheaper cost surpassed the nation of Monozukuri.

I will focus mainly on China since it is currently the strongest competition Japanese companies face. Chinese companies and upper management are able to take decision very quickly, this has enabled them to catch up to technological developments that took other countries decades to develop. They are able to take existing technology, reverse engineer it and come up with alternatives that fit the market. However, this hectic approach to production has many disadvantages like loss of efficiency and productivity. For example on average only 70% of machinery in China is being utilized. In Japan we operate under a philosophy called Kaizen. Kaizen can be defined as the constant pursuit for improvement with excellence as a goal. Over the years we have constantly studied our performance and tried to perfect it, which results in our product´s unparalleled quality and reliability.

Here, at Keylex Manufacturing, we always try to think of the future and make use of our strengths especially in countries that have needs in that. We can definitely see that our accumulated technology may find new customers and clients in Malaysia, India or any other country in Asia. We would like to be standing at a position where we can give a hand to our clients who will appeal to us so we can share our technologies and do something together. That would be a good cooperation.

 

You mentioned the rise in IOT and factory automation. I know that you have some fantastic technology such as cell production, digital engineering and image inspection systems. In 2008, you were selected as one of Japan's 300 vibrant SME companies. Could you talk to us more about all these technologies and how they are affecting your company?

I joined the company in 2009. 5 Years ago I became the president and decided to make some changes in order to help the company grow. At that time, Japanese manufacturing companies were experiencing great difficulties due to the Lehman’s brothers crash, but it was our responsibility to overcome such obstacles. After thorough analysis I decided to focus on two main areas for improvement.

First, I wanted to improve the production efficiency of all the company affiliates and manufacturing locations and secondly expand our overseas operations.

In 2010 we started to segregate our workflow by functions and today we have almost eliminated all unnecessary work by introducing simultaneous production. By increasing our efficiency we were able to cut down the number of active production facilities from 8 to 6, which lowered our costs significantly. We are currently performing at the same level of production as mass manufacturing, but single production quality standards.

However, as human capital is fairly cheaper in these countries compared to Japan, companies hesitate when given the chance to invest on factory automation. We believe robotics and industrial machinery are extremely important for the development of a better manufacturing system. Encouraging automation will guarantee companies such as Mazda that the efficiency and quality in their factories is up to the standard they need.

We are currently present in China, Thailand and Mexico, where we are trying to implement these methods of production, but we are looking at some other potential markets to continue our expansion.

 

The automotive sector is an industry that's going through tremendous changes. We can first see the appearance of electronic vehicles and the demand of lighter and more effective products such as those with lighter frames and lighter engines. How is your company able to answer to all these trends?

Here at Keylex, we always strive to improve our line of products to satisfy the needs of our customers. Considering the fast change of the markets and the demand for lighter products. At this time we are focusing on making our pressed parts less heavy. These are the parts that add the most weight to cars and we are developing new ways to lighten their weight, including the introduction of lighter materials, such as aluminum for increased performance of the vehicle.

 

Another change we are seeing in the market is the introduction of Electronic Vehicles. In fact some countries, such as France have announced that by 2040 they plan to eliminate all diesel engines and want to encourage the switch to electric powered vehicles. Do you think EV´s will completely replace combustion engine powered vehicles in the future?

I am sure that in the short to medium term EV´s will not completely replace fossil fuelled vehicles. In Europe there is a very good infrastructure and making such a radical change quickly is very costly. I believe that car brands will start introducing these new technologies in parallel to traditional models.

The approach for Mazda is of course focusing on fuel efficiency, but also driving experience, maneuverability, usability and fun

 

In 2016 your revenue was of around 500 million USD. Could you tell us more about your mid term strategy and your plans for growth?

The automotive market is changing and there is an increasing demand for lighter materials and our mid term strategy is mainly shaped around coming up with new lighter alternatives for our products that will increase the automobiles fuel efficiency, sustainability and performance. If we are successful in this mission we should be able to continue growing steadily in the future years to come.

 

What do you believe are the markets with the most potential for your Keylex?

It's hard to say because it's not our personal decision to go into particular areas where we have an interest. It's totally dependent on the Mazda Manufacturing Company. If they decide to go into one country, we will follow and support them. Our position for the next 5 years to come is how Mazda can take its next steps to promote its facilities outside Japan. We currently operate in China, Thailand and Mexico, but if Mazda decides to go elsewhere, of course, we would follow.

 

Are you looking for more international partners?

Since 95% of our production output goes to Mazda, we have not been very aggressive searching for international partners. We move alongside Mazda and are very happy to form part of it´s operations both in design and manufacturing. Their success is ours and we are very satisfied with our combined work. In fact, I proudly drive a Mazda.

 

Let's say I came back here in 10 years and have this interview again, what would you like to tell me that you've achieved.

In 2024 the company will celebrate it´s 100th anniversary. In the years to come we want to focus on working towards satisfying our customers needs. This involves coming up with that will satisfy their demand in the shape of new products, processes and new technologies. We also believe that we should continue working together with car manufacturing companies to give us a sense of perspective and combine strengths. This mutual agreement and combination of force can lead us to even greater success.

Also, we are currently developing our international strategy. Last year we established a new company in Mexico and transport our manufacturing knowhow to the area. This should increase our competitiveness within the sector and help us grow for the next years to come. We are just starting this journey, but we are very excited about it.

 

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