Challenges to Address
The automotive industry, where the G-TEKT Group operates, is in the middle of a major, unique turning point from advancements in CASE, or connected cars, autonomous driving, shared and electric vehicles, as well as mobility-as-a-service (MaaS). With this in mind, we aim to be a specialized auto body manufacturer handling all the processes from development to mass production that lead to the creation of automobiles built with the environment and safety as priorities. This work is guided by our vision to “shape a better future for people and automobiles through the fusion of passion and innovation.”
Based on our understanding of the business environment brought about by progress in CASE and MaaS, we expect some polarization in automobile pricing due to the shift to electric vehicles and the growth of car sharing; that an increased burden on automakers to develop vehicles with built-in CASE-related technologies will encourage greater use of outside suppliers; and that environmental regulations will further heighten the need for lighter weight. In response, we are promoting the following four priority measures.
Enhance Corporate Structure
G-TEKT will work to boost productivity and reliability (quality) to improve our corporate structure. We will promote the automation of press processes, welding processes, and logistics to boost productivity at manufacturing sites. In addition, we will look to improve operational efficiency by using digital information technology, including in back-office operations. Quality forms the backbone of the relationships of trust we enjoy with our customers. We aim to further improve reliability, or the quality of our products, through better quality assurance systems based on camera imaging and image analysis technologies, and by taking highly precise measurements and by implementing quality inspections at our production lines.
Expand Sales and Profit
Technological development is indispensable to the sustainable growth of the manufacturing industry, and we aim to accelerate body in white development as well as drive further evolution in existing technology. Body in white development requires improvements in complex analysis systems. Moreover, to create advanced, high-value-added automobiles, information from global bases and technology from engineering service companies in Europe will be concentrated at G-TEKT TOKYO LAB (GTL) with the objective of developing new core technologies. We will take part in the development race for high-value-added luxury cars incorporating state-of-the-art technology and aim to propel evolution in weight-saving technology in line with the shift to electric vehicles. We will also further improve existing technologies, including processing technology for ultra-high tensile strength steel plates (ultra-high tensile steel), improved production efficiency for hot presses (hot stamping), minimal laser processing, the change to multi-materials, and developing a new battery case. Alongside initiatives to reduce costs by boosting productivity, we aim to increase sales per unit of popular models and to secure new orders.
In addition, we are promoting a project to boost productivity and reliability as well as reduce costs by, among others, saving on labor and autonomous operations using digital and image analysis technologies.
We will strive to secure and nurture human resources at every level of the organization because people are the cornerstone of our corporate growth. We will provide outside training for candidates for next-generation executive management positions as well as put them through a development program featuring internal experts aimed at passing on the keys to management. To complement abilities and skills at every level, from young recruits to mid-career workers, we will provide practical training that involves hard tasks and managerial experience at an overseas subsidiary. To cultivate new areas of growth, we will strive to secure specialists that will include bringing in external talent.
For sustainable corporate growth, we look to the United Nations Sustainable Development Goals (SDGs) as guidelines for responding to climate change issues, using renewable energy, and increasing corporate value.
Immediate and Future Measures against COVID-19
Since spreading around the world at the start of 2020, the novel coronavirus, or COVID-19, is having a huge impact on the global economy. This pandemic is also affecting the global automotive industry for both supply and demand, and there is deep concern over the long-term repercussions as people’s values and behaviors change.
The immediate measures we are taking in the face of this crisis include ensuring the safety of our employees, securing liquidity, and maintaining the supply chain. At our plants in Japan and overseas, we are implementing extensive procedures to prevent infection, such as taking people’s temperatures and verifying their health as they enter the plant, encouraging people to wear masks and to wash their hands, mandating voluntary self-isolation for employees returning from overseas, and practicing social distancing at work.
Labor and other fixed costs continue to mount up at sites where we have suspended operations. We are currently procuring funds from financial institutions in Japan, the United States, and elsewhere, and there are no issues with cash flow at any of our Group companies. In addition, on April 20, 2020, we attained a credit rating of A- from Rating and Investment Information, Inc. (R&I), and we are considering diversifying our funding sources going forward.
At our production plants in Japan and other countries, top management regularly monitors operations and gathers information on each operation and region via video conferencing. As well, they maintain and manage the personnel and equipment needed to ensure continuing production. We are also reducing costs and reviewing capital investments as well as working hard to prevent infection among employees and their families. To keep the supply chain up and running, we are making every effort to determine the business conditions of our partners, provide support where we can, and promote online purchasing.
Over the medium and long term, we will strive to boost profitability and provide guidance on management to ensure an effective equity ratio as well as liquidity at every Group company in order to strengthen our financial structure across the board.
In addition to reducing the risk of infection by automating some production, we are re-envisioning our approach to the work in back offices by introducing a work from home program, and we will strive to improve productivity in other areas, including sales, purchasing, technology, and administration.
As we head toward a new era where people’s values and behavior are shaped by the COVID-19 pandemic, we are committed to further refining our corporate structure and achieving sustainable growth by securing the confidence of the market and establishing a stable management foundation through strengthening our financial structure, by accelerating productivity improvements using digital technologies, and by transforming through new workstyles.