Beginning the process up to a year and a half before launch, Uchida has shown how it can collaborate to free up resources for its Tier 1 customers.
What are the strengths of Japan's industry that allows it to maintain its competitiveness in the global market?
Japan has grown in the industries of electricity, consumer electronics and automotives. Most of the small and medium-sized enterprises (SMEs) used to be part of the electronic industry or the automotive industry. Japan didn’t just have finished car producers, but we had producers of automotive components and parts. Therefore, we had comprehensive power against competitors in this industry, which resulted in large shares in the global market. As for consumer electronic products such as televisions, other Asian Countries are now able to finish these products without the parts made in Japan and without Japanese manufacturers. However, Toyota still has the top share in the global market of the automotive industry. Toyota’s strength lies in their capabilities for development and their manufacturing technology. The Tier 1 company of Toyota, which is the main customer for Uchida, has very good capabilities for manufacturing automotive parts, and includes our die technology. We support automobile parts makers through die making, and it is in the Japanese industry that automobile makers, parts makers, and die makers can work together to make great quality products at low costs, fast lead times and in large quantities. This is the point of strength in Japan’s industry.
Can you share with us what impact the ongoing transformation of the automotive sector is having on your business?
Regarding our customers, although some of them are overseas customers, most are domestic car makers, including Toyota. Before the electrification of cars, there was already a demand to make cars more fuel-efficient in order to reduce CO2, so we needed to face the challenge of making cars more lightweight. In order to overcome this challenge, Japanese car makers’ strategy was to use ultra-high tensile steel. On the other hand, European car makers opted for Hot-stamp & Aluminium. Our production dies for ultra-high tensile steel represent the strength of Uchida. Even though cars are being electrified, they need batteries. Batteries are very heavy, so the demand to make the cars more lightweight remains. Therefore, our strengths will be needed more than ever.
Can you please explain to our readers the competitive strengths that your firm possesses which has allowed you to become a leader in creating press dies for such difficult and hard to manage materials?
Our main strength is our capacity to create dies that can handle difficult to process materials, namely high tensile steel. Let’s take the example of the central pillar for the car body. It is very important to come up with the appropriate process. If the iron is flexible enough, the iron can be shaped with the die. In the case of the high tensile steel, it is very difficult to control the shape of the die due to cracks & springback because the high tensile steel is harder. Therefore, the angle for the die is a little sharper. We have to account for the strength of the material in designing the die, which takes a lot of expertise and know-how. And we have many engineers with specialized knowledge and know-how to meet the expectations of our customers.
In order to produce the central pillar die for the first time in the world our die has to be more than 15mm sharper than the actual shape. We produced a prototype die with data, however, when we started the actual production, the actual data was different from the prototype. In order to complete the mass production die, we repeated the trials and addressed the errors, and then came up with the finished die.
Manufacturing for Uchida is providing customers with unique value. Our strength is that we can support the entire production preparation period of our customers, rather than simply providing dies. The business of making dies for new cars starts about one to one and a half years before a new car is launched. We refer to this period as the production preparation period. Our mission during that preparation period is coming up with the process for mass production and manufacturing to realize that process. We do this by working with our clients. Most car makers acknowledge that they are spending a lot of resources on non-car making activities such as the electrification of cars and the needs of the CASE era. As a result, the manufacturing of the bodies of the cars are not done by finished car makers, but are done by Tier 1 companies. As a consequence, the Tier 1 makers are running out of resources to spend on their own press and moulding processes. We can supplement that shortage for moulding technology, and I think this an opportunity for us.
Are you currently seeking new international collaborative opportunities or partners?
We do not have a specific aim in regards to countries and regions, but we do view establishing connections as very important. Because of the declining population of Japan, we do not hesitate to hire employees from overseas. For example, we have employees from South Korea and from the UK. Thus In regards to the global business, we have companies in China and Vietnam that are subsidiaries of our company. We also have a partner company in South Korea, although we do not have a capital relationship. The employees in those companies come and visit Uchida for training, and they bring back our technology to their home countries. We have our technology here in Japan, and we would like to expand our technological DNA to the world. We hope that those companies use the technology they learned from Uchida to expand their market shares. We did not actively seek our partnerships with companies in South Korea and China. Our partnership in South Korea was driven by Samsung, who wanted to diversify their business from electricity to the automotive industry in the 1990s. They wanted to learn more about the technology for producing components and that is how the partnership started. We have had that relationship for more than 25 years. We also have a very good relationship with the owner of that company.
How do you plan to grow in the international market?
It is difficult to make a die in Uchida only for a lot of different parts in one project. Therefore, more flexible production capacity is required to expand our business in the global market. Controlling production capacity is difficult with Uchida alone, so with cooperation with partners such as South Korea and China who have Uchida’s DNA, we will be able to receive orders for many parts. So we are actually working on a few European die projects together with Korea.
In which region do you foresee opportunities for Uchida to spread its DNA?
The geographical region that I foresee opportunities in is Asia. We already have partners in India, which is expected to grow in the future. In addition, for Vietnam where we have a local subsidiary, we are currently doing only design, but we plan to start production in the future. Vietnam’s automobile industry is currently insignificant, but it is expected that production in its own country will begin in the future, mainly electric vehicles. At that time, die technology will be required and we believe that we can contribute to the development.
Uchida is celebrating its 58th year anniversary this year. Imagine we come back in seven years for your 65th year anniversary as a company and have this interview again. As the CEO of this company, what are your dreams for this company?
We would like all of our employees to continue to grow and learn more about monozukuri so that we can collectively create a good monozukuri culture. We would also like to make our clients and our production line happy. That is the philosophy that we have as a mould making company.
Thank you, Mr. Uchida. I would like to ask the president the same question. What is your dream for this company as the new president? What is your vision and what goals would you like to have accomplished in the next seven years?
At this moment, we are based in Osaka, and Kyushu in Fukuoka. Currently we have two locations. Seven years from now, we would like to have a third location in Aichi which is Toyota’s base. We would like to expand our role as a die making company there, so that we can keep supporting Toyota’s growth near their base. Furthermore, we would like to spread Uchida’s DNA to the world and continue to contribute to the global automobile industry together with our partners. That is my goal.