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Japan's Approach and Perspective on Next-Generation Vehicle

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Japan’s Approach and Perspective on Next-Generation Vehicle November 15, 2011 Ministry of Economy, Trade and Industry Kenji Miura 1 Table of Contents 1. The impact of the Great East Japan Earthquake 2. Outline of the Interim Report 3. Approaches of EV/PHV Towns Initiative 4. Towards cooperation on standardization 2 1. The impact of the Great East Japan Earthquake 2. Outline of the Interim Report 3. Approaches of EV/PHV Towns Initiative 4. Towards cooperation on standardization 3 The impact of the earthquake on the automobile industry and suppliers Many automakers and suppliers were forced to stop and/or reduce production in the North East region. In the auto sector, consisting of supply chains of companies from many layers and fields, the lack of just one part or component could have a serious impact on the automobile industry as a whole. <Manufacturing base of automobile and component> Toyota(Hokkaido) ★★★Damaged plants Toyota (Tsutsumi) Affected plants by planned blackouts Suzuki (Toyokawa) Kanto Auto Works ◎◎◎ (Toyota group)(Iwate) Plants stop or reduce production Mitsubishi(Okazaki) ●●● Mitsubishi Fuso (Ohe) Hino(Nitta) Central Automotive Fuji Heavy Industry(Yajima) (Toyota group)(Miyagi) Mtsuda (Hofu) Nissan(Iwaki) Daihatsu(Kyoto) Matsuda(Fuchu) Daihatsu(Kyoto) Renesas Electronics(Naka) Nissan(Kyushu) ◎ ◎ Daihatsu(Kurume) ◎◎ ◎ Mitsubishi (Mizushima) ◎ Renesas Electronics( Hitachinaka) Toyota(Miyata) ◎◎ Hitachi Automotive Systems(Sawa) ◎ ◎ ◎◎ ◎ ◎ ◎◎ ◎ ◎ ◎◎ Isuzu(Tochigi) UD Trucks(Nissan group)(Ageo) Nissan(Tochigi) Honda(Tochigi) Daihatsu(Ohita) Hino(Hino) Daihatsu(Shiga) Honda(Kumamoto) Mitsubishi(Shiga) Suzuki(Kosai) Isuzu (Fujisawa) Daihatsu(Tada) Honda(Hamamatsu) Nissan (Yokohama,Oppama) Kawasaki(Akashi) Yamaha(Iwata Minami) Mitsubishi Fuso (Kawasaki) Daihatsu(Ikeda) 4 Damage from the Great East Japan Earthquake and recovery (1) Damage to parts and materials suppliers temporally made it difficult for several automakers to operate normally soon after the earthquake. Production has resumed earlier than expected because of substitute production, reconstruction of suppliers network and also great efforts to recover. Nissan Motor Co., Ltd. Effects of Disaster Nissan Iwaki Factory in which more than 370,000 Nissan and Infiniti engines are produced annually was badly damaged. Windows on the plant’s roof, ducts and pipes fell down and it was unsafe to go back inside. For Nissan, more than 50 dealerships and parts suppliers were damaged, and production across Japan shut down completely. Status of Recovery Resumption of full production was originally scheduled for early June, but it resumed on May 17, two weeks ahead of schedule. 5 Damage from the Great East Japan Earthquake and recovery (2) Shin-Etsu Chemical Co., Ltd. Effects of Disaster The Shin-Etsu Group has approximately 30% of the global share of silicon wafers. The main silicon wafer plant, the Shirakawa Plant, “Suffered from 1,000 gals of shock from the earthquake, and its cleanrooms and some equipment were damaged.”（Fumio Akitani, vice-president ） Shin-Etsu Shirakawa Plant Status of Recovery （Saigo, Fukushima ） On April 20, partial operations were restarted. On July 1, the Shirakawa Plant’s production capacity recovered to pre-earthquake levels. Renesas Electronics Corporation Effects of Disaster Naka factory produces 20% of Renesas’s microcontrollers and System-on-a- Chip solutions. There was partial damage to the ceiling, walls, electric wiring and some equipment. Status of Recovery Renesas Naka factory Renesas expects it will be capable of significantly moving up the schedule by （Naka, Ibaraki ） one month from the end of October to the end of September when the supply capacity of Naka factory will return to pre-earthquake levels. 6 Damage from the Great East Japan Earthquake and recovery (3) Sumitomo Metal Industries, Ltd. Effects of Disaster Damage to the Kashima steelworks was confirmed mainly at the port facilities and upstream manufacturing facilities. There was also damage within the steelworks, such as damage to the coke gas holders and the auxiliary facilities Sumitomo Metal, Kashima Steelwork (Kashima, Ibaraki) of the blast furnace. Status of Recovery Kashima steelworks was restored at high speed and it took only four days from the earthquake before its first shipment. On April 30 it resumed normal operation. Mitsubishi Chemical Corporation Effects of Disaster Production of ethylene in the Kashima plants accounts for 10% of that in Japan. Since infrastructure around the plant area including the berths and roads were also damaged, delivery and shipment of cargo became Mitsubishi Chemical Kashima Plants （Kamisu, Ibaraki ） impossible. The ethylene plants were stopped after the earthquake. Status of Recovery The Kashima No 2 plant was restarted on May 20, and the Kashima No 1 plant was restarted on June 30. 7 Damage from the Great East Japan Earthquake and recovery (4) Companies Situation after the earthquake Status of recovery Toyota Some factories suffered damage. Damage to parts Production was approximately 70% of normal in Motor suppliers caused trouble in the global production June, on a global basis. Now, production in Japan Corporation network. Toyota expected that production at has basically returned to pre-earthquake levels. normal level would be recovered later this year. Hitachi Sawa works (auto-parts manufacturing factories) Operation of the Sawa works restarted on April 4. Automotive were damaged due to the earthquake. Now, production capacity has recovered to Systems The company has approximately 60% of global pre-earthquake levels share of air-flow sensors. Hitachi The main factory in Hitachinaka City which Since March 28, production of lithium-ion Vehicle produces lithium-ion batteries for vehicles batteries has resumed and shipment overseas Energy suffered damage. restarted. Hitachi ltd. Damage to buildings and facilities was confirmed Production partially resumed at the end of May. at Hitachi’s main production bases in Ibaraki Operation with full capacity resumed mid April. Prefecture, including cracks in walls, fallen ceilings, roofs and walls. IHI The facility of Soma Aero-Engine Works (items On March 29, partial operation at buildings where corporation produced: parts for aero engines, gas turbines the effects were minor were restarted. Full and space development equipment) was shut operation was resumed mid May. down. 8 Automobile Sales Domestic sales of new cars declined sharply after the disaster (occurred on March 11)(Apri: ▲51% compared to the same month in the last year), but after this June it is gradually getting better.( ▲225,024 in sales, ▲23.3% compared to the same month in the previous year) Monthly Sales Sales before and after the earthquake (10 thousand) ◇Before the earthquake (March 1~ Mach 10) unit sales year on year rate 87,000 ( ＋4.0%) ◇After the earthquake (April) 108,824 ( ▲51%) ＊year on year rate ◇(June) 225,024 ( ▲23.3%) (2009) (2010) (2011) 9 1. The impact of the Great East Japan Earthquake 2. Outline of the Interim Report 3. Approaches of EV/PHV Towns Initiative 4. Towards cooperation on standardization 10 Outline of the Interim Report of the Strategy Study Group on the Automobiles contributing to the renaissance of Japan’s economy １． Show new roles and agendas of vehicles and automobile industry under new environment of Japanese society after the quake for the recovery of Japan’s economy ２． Show lessons from interruption in the supply chain and show agendas towards resilient supply chain which are coincident with risk reduction and cost control ３． Show agendas for maintaining and vitalizing the domestic production damaged by much of impediments including electric shortage after the quake Discussing in the Study Group, consisted of executives of the automobile industry, the materials and parts industries, academic experts, the public & private sector share of perception and agendas. Correspond with the new social 2 Rebuild a resilient supply chain 1 challenges after the disaster which are coincident with risk reduction and cost control including energy constraints (1) Reinforce the financial base of suppliers (1) Accomplish the agendas in the Next-Generation Vehicle Strategy (2) Review the excessive spec diversifications 2010 and rationalize them (2) New roles for the function (3) Develop and introduce new materials and parts under cooperation of supply demand adjustment between upstream and downstream industries management in the electric power supply network 3 Revitalize Japan’s auto market and domestic production (3) Challenges of the battery industry (1) Revitalize the Japan’s auto market by reducing the tax burden related (4) Diversification of energy sources to the purchasing and maintenance of vehicles for vehicles (2) Create a level playing field responding to the harsh (5) Corresponding with needs of international business environment aging society and knowledge-based economy (3) Proceed with process innovation 11 1. Coping with new social issues such as energy constraint in post-earthquake Japan New role as coordinator off energy supply and demand for electric Coping with new social issues such as integration with smart grid vehicles (EV), plug-in hybrid vehicles, and fuel cell vehicles due to the earthquake and energy constraints Upper system Construction of power supply system consisting of electric power system Solar battery and energy system that complement each other Existence of project leader to assemble players 1 1 Securing power supply function st st Step 2 Step Wind power Realization of
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