Japanese transmission maker JATCO is looking to build a new factory in Brazil or India as part of its strategy to accelerate a shift in production overseas, reports Dow Jones Global Equities News. "We need another plant outside of Japan, in either India or Brazil. Our existence, presence in these two areas is almost negligible, so we have to add [one] to our list," JATCO president Takashi Hata said. For now, JATCO is focused on expanding production at its existing plants in China and Mexico, as well as starting a new factory in Thailand next year. Admitting that JATCO is "still a very Japan-oriented company", Hata's immediate priority is to gradually reduce domestic output, and he intends to trim it by nearly one-third from now through to 2018, potentially involving the closure of one or more of seven domestic factories.
Significance: JATCO's plans are driven by its majority shareholder – Nissan – which owns 75% of the company and accounts for about two-thirds of its annual sales. JATCO aims to nearly double its global sales to JPY1trn (USD12.7bn) by the fiscal year ending in March 2019, up from JPY600bn (USD7.3bn) last year. That is in line with Nissan's goal of increasing its global market share from 6% currently to 8% by the fiscal year ending March 2017, mostly by expanding sales volumes in emerging markets. JATCO, which currently makes only 20% of its output overseas, plans to lift foreign output to nearly half its total in three years and to reverse the current ratio by 2019, a ploy employed by most Japanese manufacturers to hedge against the steady appreciation of the yen. JATCO is a key player in Nissan's global alliances, including that with Germany's Daimler, which intends to license gearbox technology to JATCO from 2016 for Mexican-made transmissions for use in Nissan- and Infiniti-brand vehicles.
