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The eBearing News
October 5, 2004
NTN Targets Hub Units, Needle
Bearings for Sales Growth
copyright © 2004 eBearing Inc.
NTN Corporation (Japan) has targeted automotive wheel hub assembly units and needle bearings for
more aggressive sales growth in coming years.
Across all hub units -- 1st, 2nd and 3rd generation -- NTN recorded sales of ¥ 267 billion worldwide in
fiscal 2002. In fiscal 2003 (ended March, 2004), that grew 7% to ¥ 286 billion.
Fiscal 2003 was the first year of NTN's aggressive Rapid Advance 21 program, a progression from its
NEW Plan 21. Rapid Advance 21 extends NEW to a corporate level improvement, investing in product development
and employee skills to enhance value creation, target the most effective investment strategies to maximize
ROI, accelerate asset turnover to increase ROA, and increase operating income by reducing COGS while
increasing top-line sales growth.
From that 7% worldwide hub assembly sales growth in FY 2003, NTN is targeting 12% for 2004, 20% in 2005,
and 15% in 2006.
In absolute sales, NTN is focusing its efforts on the North American market. After shrinking slightly to
¥ 142 billion in fiscal 2003 from ¥ 143 billion in fiscal 2002, a slight increase to ¥ 145 billion
is planned for 2004. But Rapid Advance 21 calls for extremely strong hub sales in North America from
then on -- up 25% in 2005, to ¥ 180 billion, and another 14% in 2006, to ¥ 205 billion.
In relative terms, hub unit sales in Europe are forecast to see a continued strong upward trend,
particularly in the higher value-added 2nd and 3rd generation units. From ¥ 15 billion in fiscal 2002,
hub sales hit ¥ 19 billion in 2003, should be up 30% to ¥ 25 billion in 2004, another 20% in 2005
to ¥ 30 billion, and 17% in 2006 to ¥ 35 billion.
Currently, most of the sales gains in Europe are tied to higher-cost 2nd generation hub unit sales wins --
for example, ¥ 470 million per year from a recent contract, starting in 2nd half 2004.
In contrast, NTN's most recent supply contract win in North America was for 1st generation hub units
(hubs and bearings supplied separately) to a Big 3 automaker, worth ¥ 410 million per year -- reflecting
high volume but relatively low pricing.
Hub unit sales to NTN's home market automakers in Japan are projected to sustain their growth, despite
production pressure from other markets. After improving 13%, from ¥ 98 billion in 2002, to ¥ 111 billion in
2003, 2004 will improve on that with 20% growth to ¥ 135 billion. Looking forward to 2005, NTN expects 11%
growth to ¥ 150 billion, and 17% in 2006 to ¥ 175 billion.
Japan market sales are benefiting from new business for 2nd generation hub units (unit hub and bearing
units), but even more so from advanced 3rd generation units (hub and bearing units with integrated active
or passive electronic wheel-speed sensors).
While automakers in China, Korea, and other Asian countries do not account for many NTN hub unit sales yet,
the company still expects aggressive growth from a relatively small base. From ¥ 11 billion in 2002
to ¥ 14 billion in 2003, 2004 will be flat at ¥ 15 billion. From 2005, however, NTN expects more
sales to Japanese automakers now setting up new factories in Asia. 2005 hub unit sales are expected to be
up 66% over 2004, to ¥ 25 billion. In 2006, that is expected to rise again, by 20% to ¥ 30 billion.
New contracts are already in place to supply a Big 3 automaker now in Asia from mid-2005 on.
Needle bearings are another key Rapid Advance 21 sales target. From ¥ 317 billion in fiscal 2002, NTN forecasts
sales to reach ¥ 460 billion by fiscal 2006.
Along the way, sales in Japan are expected to climb 25%, from ¥ 253 billion in fiscal 2002, to ¥ 284 billion
in 2003, to ¥ 310 billion in 2004, to ¥ 310 billion in 2005, then ¥ 315 billion in fiscal 2006.
NTN indicated virtually all of that home market sales growth expectation is tied to forecasts of generally
higher automotive production projected through at least 2006. If the pace cools, sales will fall behind
the projected curve, with little chance of regaining traction within the forecast period.
But needle roller bearing sales outside Japan is where NTN expects to see the most growth, particularly in
Asia, and China specifically,
From ¥ 64 billion in fiscal 2002, dipping to ¥ 63 billion in 2003, NTN is forecasting more than
125% growth through 2006, to ¥ 145 billion. In China, Changzhou NTN recently won at least three new
needle bearing original equipment customers, worth more than ¥ 1 billion per year in additional sales
beginning later this year.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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