Denso wants to vault from the middle of the field into Europe’s top 5 by 2010. To do so, the Japanese supplier is investing heavily in the region – and losing some money in the process.
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Denso posted an operating loss in Europe for the second straight year in its 2004-2005 fiscal year. It blamed the €63 million shortfall on the costs of opening a heating, ventilation and air conditioning plant in the Czech Republic and expanding a Hungarian diesel systems facility.
Overall, Denso reported record global revenues of 2.8 trillion yen (€20.1 billion) during its 2004-2005 fiscal year ending March 31. Denso was profitable in its other regions: Japan, Americas and Asia-Oceana.
Denso’s European deficit in the 12 months ending March 31 was double the previous financial year’s €33 million loss. It reflects heavy investment in technologies and facilities to boost its position in Europe. European net revenue for the year rose to $2.59 billion (currently E2.14 billion) from $2.02 billion.
Denso CEO Koichi Fukaya confirmed his goal to become a top-5 European supplier by 2010 at the 2004 Paris motor show. That would be a massive jump.
Last year Denso ranked No. 20 in Europe, with only a third the revenue of No. 5 Siemens VDO Automotive at $7.77 billion.
“In Europe we still have some catching up to do,” Denso Europe president Michio Fukazaki said.
Denso’s push parallels that of its best customer, Toyota, which wants to build a greater proportion of its European-market cars in Europe.
Toyota owns 24.6% of Denso.
