Technology Transfers by Japanese Auto Industry

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1 Technology Transfers by Japanese Auto Industry Vancouver, October 30, 2008 Japan Manufacturers Association, Inc. (JAMA) 1

2 <<Current status of technology transfer>> The Japanese auto industry is increasing technology transfers actively. Japanese automakers are expanding our global operations and overseas production through capital tie up with partners in the countries. Technology transfer [1] Widespread use of fuelefficient vehicles [2] Construction of ecological and productive plants in overseas [3] Expansion of local parts purchasing (Local contents) 2

3 Capital Business tie up / Japan China (1) ISUZU 20% Qingling Motors TOYOTA 45% Vitz Sichuan FAW Toyota Motor Tianjin FAW Xiali Co.,Ltd. % Qingling Isuzu Engine 40% 30% Tianjin FAW Toyota Motor SUZUKI 35% 45.4% Chongqing Changan Suzuki Jiangxi Changhe Suzuki NISSAN 30% Zhengzhou Nissan Dongfeng Motor DAIHATSU FAW Daihatsu Body Parts NISSAN DIESEL *% investment Dongfeng Nissan Diesel Motor Source: The Motor Industry of Japan,

4 Capital Business tie up / Japan China (2) 24% Shenyang Shenfei Hino Manufacturing 15% Changang Ford Mazda HINO Guangqi Hino Motors MAZDA ATENZA FAW Cars Shanghai Hino Engine 25% Changan Ford Mazda Engine Dongfeng Honda 14.6% Hunan Changfeng HONDA Guangzhou Honda MITSUBISHI CHALLENGER OUTLANDER Beijing Bentz- DaimlerChrysler Automotive 65% Honda (China) 25% *% investment South East (Fujian) Motor Source: The Motor Industry of Japan,

5 Capital Business tie up / Japan India SUZUKI 54.2% Maruti Suzuki India Limited 74% Suzuki Motorcycle India Private Limited HONDA 97.4% Honda Ciel Cars India Ltd. 100% Honda Motorcycle and Scooter India Private Limited 26% Hero Honda Motors Ltd. YAMAHA 69% India Yamaha Motor Private Limited (IYM) *% investment Source: The Motor Industry of Japan,

6 (km/l) 18 Japan (fuel efficiency; diffusion rate) Japan Manufacturers Association, Inc. [1] Expanded Use of Fuel-efficient Vehicles Data on gasoline vehicle fuel efficiency and diffusion rates of variable valve timing technology / CVT -- The use of fuel efficiency improving technologies on the steady increase -- (%) 100 (%) 100 China (diffusion rate) Average fuel efficiency 16.2 km/l Variable valve timing CVT 83 43% Variable valve timing 80% CVT 7% Source: JAMA data 6

7 [2] Construction of Ecological and Productive Plants <<Overseas production by Japanese automakers>> Japanese automakers are engaged in overseas vehicle production at our plants in China, India, and Southeast Asia. [Number of Japanese automakers' overseas production sites (as of 2008; including part production plants)] 2003 Southeast China India Asia 22 sites 7 sites 54 sites sites 10 sites 76 sites (2 sites under construction) (1sites under construction) (1 sites under construction) Source: The Motor Industry of Japan, 2003,2008 7

8 [2] Construction of Ecological and Productive Plants <<Environmental measures at Japanese automakers overseas plants>> Levels of energy efficiency and pollution control facilities at Japanese automakers plants in China and India are equivalent to those in Japan. Japanese automakers production operations are also making contributions to improving the environment of the countries. 8

9 [3] Expansion of local parts purchasing (Local contents) Data on vehicle production volume and local purchasing rate of Japanese automakers Production volume at Japanese/partner production sites are on the increase. ten thousands units China ten thousands units India Total production in China Production by Japanese-host partnerships Local purchasing rate in % Year Total production volume Local purchasing rate in % Production by Japanese-host partnerships Source: Data from JAMA data 9 Year

10 Activities on Traffic Flow Improvement Cooperation for traffic flow improvement in Thailand Increases in Average Vehicle Speed by Setting Traffic Lights with Systematic Control Before project After project Speed Gain ( + km/h ) Average for total area 12.4 km/h 19.1 km/h 6.7 Reductions in Greenhouse Gases after Project Implementation Daily Emissions Vol. Before Daily Emissions Vol. After Daily Reduct. Vol. 54,336 kgco2/day 45,576 kgco2/day 8,763kgCO2/day Statistical data compiling Annual Reduct. Vol. 3,197 tco2/year Reduct. Rate (%) 16.1% Japan is planning to conduct a preliminary survey for the compilation of statistical traffic data in collaboration with Indian governments and Industries. By compiling statistical data in a road traffic, verification of the effectiveness of technology transfer can be achieved. (1) Proposal of a running volume (distance) investigation technique (2) Investigation on running speed 10

11 <<Conclusion 1>> By increasing the use of advanced energy-saving and environmental technologies for automobiles worldwide, both protection of climate change and sustainable mobility can be achieved at the same time. Specifically, it is important to improve vehicle production efficiency and vehicle fuel efficiency on a global scale. Since advanced technologies related to production and products are very essence of the competitiveness of automakers, these technologies are transferred on a business basis. Japanese automakers are increasing fuel-efficient vehicles through capital tie up with local partners. Capital tie up not only contributes to the wider use of fuel-efficient vehicles, but also raises the production efficiency through localized production. In addition, it improves the production/product technologies of suppliers through expansion of local parts purchasing. 11

12 <<Conclusion 2>> Through correct management of intellectual property, automakers corporate activities are stimulated, which in turn promotes more business entries and accelerates technology transfers. CO2 reductions in a road transport sector requires not only greater fuel efficiency but traffic flow improvement, efficient use of vehicles and diversification of automotive fuel supply. In addition, statistical data collection for analyzing effectiveness of each measure is also important. These can be best achieved through technology transfers and government-industry collaborations. 12

13 Thank You 13

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