4 Japanese parts suppliers to merge

TOKYO: Hitachi Ltd and Honda Motor Co said yesterday that they would merge four auto parts suppliers under a new company to boost competitiveness amid a multitude of challenges and opportunities created by the emergence of autonomous and electric vehicles.

The plan is in response to the intensifying race to develop nextgeneration technologies for socalled CASE — connectivity, automation, sharing and electrification — applications.

The merger involves Hitachi Automotive Systems Ltd, a wholly owned subsidiary of the electronics giant, as well as Keihin Corp, Showa Corp and

Nissin Kogyo Co, which are under Honda’s wing.

In the deal, Hitachi Automotive Systems will absorb Honda’s three subsidiaries after the automaker obtains all stocks in the three suppliers through takeover bids. The name of the new company is yet to be decided.

Hitachi will hold a 66.6% stake in the merged company, and the rest will be owned by Honda.

The combined sales of the four firms would be around 1.8 trillion yen ($16.5 billion), making the merged company one of the leading auto parts manufacturers in Japan.

“We can establish competitive technologies and solutions by the combination of the four companies’ core businesses,” Hitachi said in a statement, adding that it would take advantage of the merged company’s economies of scale in providing its products globally to customers.

Hitachi also said it would offer its digital technologies to the merged company to help it improve its mobility services, especially in the field of vehicle connectivity.

Hitachi has been streamlining its automotive business to enhance profitability, selling car navigation system maker unit Clarion Co to French car parts maker Faurecia SA in March.