Establishment of Automotive Parts Company in Guanajuato, Mexico
- Base for manufacturing automotive wire harnesses for customers in Mexico -

April 30, 2013

Furukawa Electric Co., Ltd. and its subsidiary Furukawa Automotive Systems Inc., (hereafter, the Group) will establish an automotive parts company in the state of Guanajuato, Mexico. The new company will manufacture and sell wire harnesses to Japanese automotive manufacturers in Mexico. Sales are expected to reach approximately 5.0 billion yen in FY2016.
The company will expand its business with a view to selling automotive parts, including steering roll connectors (SRCs) for airbags as a safety device.

Objective of the establishment

In September 2011, Furukawa Wiring Systems America Inc., a Group company engaged in manufacturing and sales of automotive wire harnesses in North America, was integrated into American Furukawa, Inc., a wholly owned subsidiary of the Group that also manufactured and sold automotive parts, mainly SRCs, in North America, in efforts to create synergies including improvement of QCDDM(note 1) for further expansion of the trade area of the automotive part business in North America. The Group resultantly enjoyed increased orders from Japanese automotive manufacturers in the wire harness business. Above all, orders from companies in Mexico have been increasing in recent years due to entry of Japanese automakers into the country and increase of these companies' production.

The new company will manufacture and sell wire harnesses and other products in the Mexico market. It will also make use of the Generalized System of Preferences(note 2) in the country for automotive parts as a whole, including wire harnesses, to expand its trade area to South American and European markets.

Outline of new company

Company Name TBD
Head Office TBD
Investment ratio Wholly owned by the Group
(Furukawa Electric: 40%, Furukawa Automotive Systems: 60%)
Capital $5,500,000 (approx. 500 million yen)
To be established May 2013
Planned beginning of operations January 2014
Employees 300 (2014), 1,000 (2016)
Manufacturing base (factory) Acámbaro, Guanajuato, Mexico
Business line Automotive wire harnesses, automotive parts

(note 1)QCDDM stands for quality, cost, delivery (strict observance of delivery time), development (development capability), and management (operational management) that automobile manufacturers require of suppliers.

(note 2)An agreement took effect between Mexico and MERCOSUR countries (Argentina, Brazil, Uruguay, and Paraguay) under which they extend preferential tariff treatments to each other (ACE No. 55), especially concerning automobiles and automotive parts. With European countries, Mexico has also concluded the Mexico-EU Free Trade Agreement (with the Spanish acronym TLCUEM) and EFTA-Mexico Free Trade Agreement (ESFTA).