DENSO delivers company direction update, shares sales projections

DENSO, the world’s second largest mobility supplier, today announced updates to its new business strategy and progress toward achieving its 2030 goal: to create and inspire new value for the future of advanced mobility. In October 2017, DENSO declared its ‘second founding’ as it expanded into software-based solutions to complement its traditional hardware expertise, marking one of the most significant strategic shifts in the company’s 70-year history.

During a news conference today, President & CEO Koji Arima and other senior leaders reaffirmed DENSO’s commitment to its strategy designed to:

  • Increase performance in the fields of electrification and automated driving;
  • Boost investment in R&D globally to create groundbreaking technologies; and
  • Focus on key initiatives both in and outside the auto industry to add value.

“The future of advanced mobility will soon be realized. DENSO wants to contribute by creating and delivering innovative solutions that enrich people’s lives,” said Arima. “To that end, and through our Long-Term Policy 2030, DENSO will continue to lead the fields of vehicle electrification and automated driving, innovate with agility and through collaboration, and seek emerging areas in which to enhance mobility.”

DENSO’s goal in FY2025 is to reach sales of 7 trillion yen (about $63.9 billion) and an operating income ratio of 10 percent. In FY2021, the company projects it will produce sales of 5.6 trillion yen (about $51.1 billion) and operating income ratio of 8 percent or more.

Increasing performance in electrification and automated driving

DENSO’s electrification business generated sales of 0.9 trillion yen (about $8.2 billion) in FY2018 and plans to double that figure by FY2025. DENSO recently committed to investing approximately 180 billion yen ($1.6 billion) over three years – from FY2018 to late FY2020 – to support its aggressive development and production of electrified automotive products, systems and technologies. The company also recently reached an agreement with Toyota to transfer electronic components operations to DENSO, which will improve DENSO’s development speed, increase production efficiency and strengthen its manufacturing system in electric field.

DENSO’s Mobility Systems Group, which focuses on new mobility and automated driving technology, aims to achieve 1.1 trillion yen (about $10 billion) in sales in FY2025, an approximately 40 percent increase from FY2018. Expected growth drivers include increases in autonomy levels, and the proliferation of vehicle fleets through mobility-as-a-service offerings like ride- and car-sharing. DENSO recently announced partnerships to help spur related developments:

  • Just last month, DENSO, Toyota Motor Corp. and the SoftBank Vision Fund invested $1 billion in Uber Technologies Inc.’s Advanced Technologies Group to accelerate the development and commercialization of automated ridesharing services.
  • DENSO escalated its expansion into AI, cybersecurity, LiDAR and more by investing nearly $100 Million in startups over the last four years.

“We see substantial opportunities in mobility-as-a-service,” said Hirotsugu Takeuchi, senior executive officer and head of Mobility Systems at DENSO Corporation. “Working at scale with customers and partners who approach mobility from various angles comes naturally to us, so we look to make our mark on this market as it grows.”

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