The Benefits of Japan's Reliable Technologies for Manufacturers

It is a pivotal time for Japanese manufacturers right now as we see policies like the Inflation Reduction Act (IRA) for example, inciting companies to diversify their supply chain to reduce the risks with countries like China for example. On top of that, Japan is known for its reliability and advanced technologies. When you combine this with a weakened JPY, it makes Japan very attractive and cost-effective for companies all around the world on the international scene. Do you agree with this premise, and what would you say are the key advantages of Japanese suppliers within this macro environment?

When it comes to the depreciation of the JPY, we have not experienced much positivity. While our overseas factories benefit from JPY depreciation, domestically speaking, since the import costs have risen, the costs for energy, materials, and transportation have also risen. That has become a burden for the company. We are now trying to compensate for these losses by converging into the pricing. We are currently struggling to convince our customers of the uplifted new pricing that we have introduced. Speaking of the supply chain, our maker customers are Japanese car makers. We have an accumulated history and relationship with these makers and have been providing our high technology with high-quality assurance to them for many years. Being able to respond to different pricing as well as different requirements according to the area of production is important. Due to the extensive relationships that we have established with these Japanese manufacturers, our position within the automotive supply chain is stable.

Our company’s strength is the trust and reliability that we have acquired from our customers through our long-standing relationships. For example, we are in a tight-knit relationship with our customers and can readily respond to their demands regardless of the quantity or lead time requirements. Whenever they require assistance onsite, we step in and help. We also communicate in the traditional Japanese way by sharing a meal together. By creating this human relationship with our customers, we can fully support their business operations. Their success leads to our success. Working together leads to better achievements. That has been the way the Japanese automotive supply chain has been built. Within the supply chain, our position is stable due to the trust we have accumulated.

Japan is known to have an aging population. By 2050, it is predicted that the population will drop below 100 million people, which raises two major issues. The first is a shortage in the labor force, and the second is a domestic market that is slowly but surely shrinking. How is your company reacting to this demographic shift, and how much must you look overseas to ensure long-term business success?

The labor force shortage is an immediate issue that we are experiencing. Providing a comfortable environment to diversified individuals is the strategy that we are taking. This includes the reemployment of the senior generation, as well as employing more women, people with disabilities, and foreign workers. Our positions are open to a diversified range of personnel. Preventing people from quitting their jobs is also very important. Providing more engagement programs and focusing on the mental and physical health of our employees is key. We also provide adequate evaluation and compensation to our employees. Our engagement programs not only focus on the employees but also includes their families. Ensuring our employees’ welfare is very important to our company.

At our factory, we are pursuing labor-saving and automated facilities. We are currently planning next fiscal year’s business strategy, but we are expediting the introduction of automation in our factory to compensate for the loss of the labor force. As for our overseas operations, our strategy is to procure the materials and manufacture the products locally. Apart from some safety-critical components that need to be made in Japan, the majority of our components are locally sourced and produced at the local factory.

The global automotive market was estimated to be valued at almost USD 3 trillion in 2023 and is expected to reach USD 3.5 trillion by 2031. The growth in the global population, the rapid evolution of EVs, and the rise in popularity of autonomous vehicles are said to be the main drivers of the industry. How do you foresee the next 12 months for your business, and what will be the main growth drivers from your perception?

I may not be answering your question directly, but I want to reiterate the strength of Johnan Manufacturing. We can provide a one-stop service from development to production within our company. We even have a high ratio when it comes to the self-development of facilities as well as molds and casts. We know what the outcome needs to be, and accordingly, we can plan out the high-technological facility that is required. This allows us to provide high-quality products and high productivity which increases our price competitiveness.

Our company size is considered as neither a major company nor an SME. Rather we are in the middle. It is the most adequate size for major car manufacturers to work with as due to our size, we have a stable operation, but at the same time, we are flexible and speedy in development and production.

It is interesting to hear you speak about your production capacity. We know that over the past 70 years of your history, you have been able to consolidate your position and standing in the automotive components industry with products such as your door window regulators, charging ports, hood and back door locks, hood hinges, and many more types of products tailored to the needs of very prestigious clients. These clients include Nissan, Mitsubishi, and Mazda among many more. Of all the types of products that your company produces, which one has the most growth potential for your business, and are there any other parts or industries to which you would like to cater your know-how in the years to come?

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The uniqueness of Johnan Manufacturing is that we are providing our products to all the passenger vehicle makers in Japan. Through our business transactions with these major Japanese companies, we have the second-largest market share. The products that we expect to grow are our door window regulators and our hood locks. They are our main products. The door window regulator and the hood lock are not affected by the electrification of the vehicles. Globally speaking, we are ranked sixth or seventh in market share. Our target is to first acquire the largest share in the Japanese market and then increase our stance globally.

Japanese manufacturers are trying to reduce the number of steps for automotive production. This includes the modulization of doors. The locks and regulators are currently assembled individually on the door. However, moving forward, the aim is to integrate modular units into the door. We are developing this new kind of production together with the makers to accommodate our products. Also, our major product, the hood lock conventionally was used for the engine. However, it has been replaced by a motor instead of an engine due to the EV conversion, thus making more space available. Instead of calling it a trunk, it is now called frank in Japanese. It will probably be divided into sections and require two separate locks. Developing new types of locks catering to the frank with automated or electrified controls is our current R&D target.

Having said that, the automotive industry is currently going through a once-in-a-century reform with the switch to EVs. We do see the risk of endangering our core business. That is why it is important to find new next-generation businesses that will serve as a pillar of Johnan Manufacturing in the future. We are currently conducting projects to discover new business opportunities where we can apply our existing technologies to new fields. For example, through our activities, we have been able to open up a new business in agricultural equipment which will surely be a growing field for our company going forward. At the same time, we want to collaborate with partners with new technologies and combine our accumulated technologies and know-how for quality control development as well as high throughput efficiency and efficient procurement schemes. Through these collaborations, we want to open up a new market using new technologies to solve the issues of potential clients in any field. We would like to expand outside of the automotive industry.

You mentioned that one of your strengths is producing door window regulators as well as various locks which are characterized by their lightweight, compactness, and high durability. To reach this lightweight and compactness, you must ensure the integration for improved layout in the vehicle doors, especially considering the EVs, diversify the application of resins, and thinner steel plates to meet the lightweight specifications of your clients. For example, ACDelco window regulators managed to find a great balance between functionality and customization to meet their client’s needs and improve cost efficiency in general. How do you manage to optimize the miniaturization and achieve lightweight door window regulators, and how do your products surpass the ones made by your competitors such as ACDelco?

When it comes to lightweight products, we are proud to say that our products are the lightest door window regulators in the world. We also provide all types of door window regulators including arm type and wire type. In all of these categories, we provide the lightest and most compact products in the world. Our benchmark department purchases all of the different types of regulators used in both Japanese and foreign cars. We compare their size, weight, and functionality with our products. Through these comparisons, we have concluded that we provide the world’s lightest regulators.

In terms of electrification for EVs, providing lightweight products is critical. Conventionally, it used to be steel. Making the steel thinner is of course necessary. However, replacing the steel with a more lightweight material such as aluminum and resin is a viable alternative. We have already developed such regulators with new types of materials. Also, when it comes to regulators, the system has been standardized. It is therefore important to add extra value through special functions or features. We envision that in the near future, the window glass will be converted into a monitor or display to show images. The only way of connecting power to this display window will be through the regulators. We have developed a mechanism in which our regulators can provide power to the window monitor, so once there is a need, we will provide our technology readily.

When do you expect this technology to be released on the market globally?

I am not sure yet, but we are eagerly waiting for our product for this technology to be released.

The other products that you mentioned that are key products of yours are your hood and door locks. There are other challenges that you must face such as being able to design locks that can be mounted on both compact cars and medium-sized cars with adjustment for variation depending on the hood or door weight. You must also ensure seamless integration into the electronic system especially if there are smart features, and develop an auto-closer lock that automatically detects partially closed back doors and fully closes them. How does the design accommodate differences in hood or door weight, and what mechanisms are in place for making adjustments? How does the auto-closer lock system work, and what technologies are involved in detecting the door’s position? Are there safety mechanisms in place to prevent accidental closures?

It is the weight of the windows glass or hood that matters, rather than the actual size of the car. The car manufacturers have specifications for the strength requirements for the hood lock for example. We have a standardized mechanism and we provide different springs that are small, mid-sized, or large-sized. The size of the springs that we use depends on the weight of the hood. Conventionally, it requires a combination of three different types of springs. However, we have our unique spring structure which only requires two springs.

The window regulators are also designed depending on the weight of the glass. The manufacturer has specifications for the strength that is required to close the window completely. We change the motor torque accordingly.

As I mentioned earlier, one of the major strengths of our company is that we have a relationship with all of the Japanese car manufacturers. This experience is converted into the technologies that we create. Our in-house designers have the capabilities to combine the know-how that we have accumulated over the years. We use this advantage to provide standardized and efficient products that are simple yet high in performance.

When we interviewed other key players in the industry such as Penstone for example, they emphasized the importance of having local partners and cooperative partners to reach overseas markets and be more competitive on a global scale. You mentioned for example the fact that you want to invest in the agricultural industry and that you are working with some partners to reach that goal. What role do partnerships play within your business model, and are you searching for new partners in overseas markets to reach these new industries?

Partnerships play a key role in our business, especially in our overseas operations. We have established relationships with local partners in the countries that we operate in. While we have not yet defined our new overseas expansion plan, India and Indonesia are growing markets that we are looking to target. In the past, we preferred to keep our technologies in-house. However, due to the rapidly changing environment, we need to open up and work together with other suppliers to ensure that we can remain competitive together.

Your company is celebrating its 78^th anniversary this year. Imagine that we come back two years from now for your 80^th anniversary and have this interview all over again. What would you like to tell us? What are your goals for the future of this company?

I am aiming towards our company’s 100^th anniversary. Honestly speaking, the automobile industry is currently going through a very harsh period with this once-in-a-century transformation to EVs and autonomous driving. There are also many external and overseas factors to consider. We need to focus on continuing our operations and maintaining our share within the automobile industry especially when it comes to regulators and hood locks. We want to aim for a higher share of the market. However, at the same time, we need to focus on maintaining the turnover that we acquire.

Opening ourselves up to business outside the automotive sector is also necessary. Entering into new fields and using our technologies to provide solutions to new customers is what we want to do moving forward. Finding new partners to work with and new markets to operate in are critical steps for the growth of the company.

For more details, explore their website at http://www.johnan-seisakusho.co.jp/en/