TOKYO - Denso Corp. wants to be the world's biggest auto parts supplier, in part by raising the number of component categories in which it is the global sales leader.
Denso may make more acquisitions in Europe, but it is unlikely to buy other Japanese parts makers, according to President Hiromu Okabe.
'I regard the top position in industry rankings as absolutely essential for our company. I believe that about three companies will set the pace for our industry,' he said during a recent speech at the Foreign Correspondents Club of Japan.
Okabe said Denso does not aim to reduce the 50 percent of its sales that go to Toyota Motor Corp., which owns 24.7 percent of Denso. Because Toyota is still growing globally, he said he considers Denso's heavy exposure to Toyota an advantage.
The Japanese auto-parts giant once was the world's largest parts maker. But rising sales by German rival Robert Bosch GmbH and the emergence of General Motors' Delphi Automotive Systems and Ford Motor Co.'s Visteon Automotive Systems have knocked Denso aside. The company ranks No. 4 in the Automotive News Europe ranking of the world's largest suppliers of original equipment parts.
Denso is the top seller in 12 parts categories. Okabe wants to boost that to 19 by 2005, by moving up from the No. 2 or 3 position in wipers, oxygen sensors, idling speed control valves, pressure sensors, radiators, injectors and traction inverters for electric vehicles.
The drive for market share would not come at the expense of profits, Okabe implied. He said that in 2000 Denso will introduce an accounting system to monitor net return on investment in each product sector globally. The goal is a 10 percent return on investment by 2005.
Okabe said Denso's manufacturing networks in Asia and North America are well established. 'We are now moving rapidly to expand and upgrade our operations in Europe,' he said.
There, Denso recently purchased the starter-alternator business of Italy's Magneti Marelli SpA. Future acquisitions are possible because they allow Denso to quickly expand in Europe, Okabe said. He called it 'buying time.'
But he ruled out acquisitions just as a means of pushing Denso's market share for certain components to the No. 1 spot.
Denso would prefer to gain share by offering technically unique products, he said.
Okabe also said he saw 'no need' to buy a Japanese parts maker, citing Denso's already 'wide product line.'
'We don't see much merit' in buying Nissan suppliers, he said. Nissan has said it is willing to sell its stake in all but four of its almost 1,394 affiliates.
