Denso has launched its 2018 Annual Report, which is the first account of company activities following the release of its long-term policy.

Specifically this addresses issues such as:

  • Increasing performance in the fields of electrification and automated driving
  • Realigning organisational structure to accelerate business execution, R&D, collaboration, and other efficiencies; and focussing on key initiatives both in and outside the auto industry to add value

“Our long-term vision is a future with enhanced mobility, safety and peace of mind, with less impact on the environment,” said Denso CEO, Koji Arima. “We still have a deep commitment to protecting lives, but we are ready to realise our second founding.” This means we must change our own organisation to prevail in the rapidly changing business landscape and provide value to our customers that goes beyond a vehicle-centric focus to enrich society’s broader needs.”

Denso will continue in the fields of electrification and automated driving to achieve sustainable growth. The company aims to achieve revenues of JPYY7tn (US$62B) and an operating profit ratio of 10% by 2026.

In 2017, Denso announced it would invest US$1bn by 2020 in its Maryville, Tennessee location. The investment advanced the US role in the future of electrification and safety technology, as well as making Maryville a primary manufacturing centre in North America for electrification and safety systems.

The investment also expanded multiple production lines to produce safety, connectivity, and electrification products for hybrid and electric vehicles.

Denso has undergone restructuring with the aim of accelerating business execution during major industry change. Specific examples include:

  • Reduced the number of members on the board of directors and separated the roles of business management and execution
  • Clarified roles of directors in charge of management, senior executive directors and executive directors
  • Made one person the lead in R&D in North America and European Union to promote collaboration, particularly in advanced technology.
  • Strengthened business in China with plans to establish a China division to enhance strategy-making capability
  • Reorganised product groups to support Denso’s focus on key fields and initiatives; new business groups include: Thermal systems, Powertrain systems, Mobility systems, Electrification systems and Electronic Systems
  • Arranging satellite R&D facilities globally, which are able to react in the changing business environment and execute advanced R&D more speedily
  • Formed alliances and partnerships with like-minded organisations to help advance Denso’s R&D function, increase speed and realise agile global development. Recent partnerships span areas such as artificial intelligence, autonomous driving, cybersecurity, electrification and agricultural technologies and include: Toshiba, Plug and Play, NRI SecureTechnologies, Dellfer, Aisin Seiki, Asai Nursery, InfiniteKey, Joled and the University of Michigan

Focussing on key initiatives:

Denso plans to focus on the areas of electrification, automated driving and connected cars to advance the future of mobility. It will also focus on non-automotive business, particularly on factory automation and agro-industrialisation. Recent investments and partnerships in these key areas include:

  • Electrification: Aisin seiki and Denso have reached a basic agreement on the establishment of a joint venture company to develop electrified drive modules and are preparing for establishment
  • Automated Driving: Aisin seiki, Advics, JTEKT and Denso have signed a basic agreement concerning the establishment of a joint venture for the development of integrated ECU software for automatic operation and are preparing for establishment. Additionally, Denso’s investment in ThinCI speeds the development of semiconductor devices with deep learning capabilities required for next-generation automated driving technology
  • Connected Cars: The investment in Creationline upgraded Denso’s system to develop cloud solutions and open source software. Denso’s collaboration with Ridecell advances the development of carsharing and ridesharing technologies and services
  • Non-Automotive Businesses: Asai Nursery and Denso’s joint venture will create a next-generation model for horticulture using large-scale greenhouses and agricultural technology. The companies will build one of Japan’s largest agricultural greenhouses and develop technologies to improve cultivation productivity for growing vegetables. Construction is scheduled to begin in 2019