Unbeatable performance from land to sea: automotive components built to withstand all of nature’s elements

Can you please give us a brief introduction to your company?

Our company, Asahi Denso, was established in 1961, and this year marks the 60th anniversary of our founding. We have JPY 80 million in capital funds and are headquartered in Hamamatsu City, Shizuoka, Japan, with a factory in adjacent Iwata City that manufactures dies and resin molded products.

We deal with products including switches, locks, and electrical equipment used in motorcycles, marine vessels, and other vehicles. The strength and uniqueness of our company lies in our integrated processing methods from the design and manufacturing stages right through to the sales and marketing of the goods.

With regard to motorcycles, we work with all the major Japanese producers including Yamaha, Suzuki, Kawasaki and Honda and we also have many overseas customers as well, including Triumph, Ducati and KTM.

About 45% of our total sales come from switches and electrical components for motorcycles and our products include APSs (Axle Position Sensors) and Smart systems (hands-free ignition switches). In fact we are the world’s largest supplier of axle position sensors.

Asahi Denso marine-use products are fully waterproofed, resistant against salt and water leaks, as they would be exposed under severe environment in the ocean with salt water.

Since our products are also used in agricultural and construction machinery as well as leisure mobility we have to ensure that environmental conditions such as high dust levels or high and low temperatures do not affect the way they work.

We design products that will operate accurately under diverse environmental conditions, and manufacture them with responsibility.

Axle Position Sensor, Smart system, Control levers

Axle Position Sensor, Smart system, Control levers

Your company faces stiff price competition, especially in countries such as China and South Korea which are able to replicate those products using a cheaper labor force and therefore charging a lower product price. How are you able to remain competitive in the global market?

If price were the only consideration, it would indeed be difficult to compete with China and other countries. However, what Asahi Denso values is QCD - quality, cost and delivery, and the combination of these three factors makes us a strong competitor. We assure top quality and lower the costs as much as possible, and then provide prompt delivery.

There was a time in some Asian markets when cheap motorcycles and components sold well, but people began to realize that good quality was a necessity in motorcycles, and this is why we’ve been able to achieve and maintain our market share.

You mentioned one of your strengths was quality. Your company now has manufacturing sites overseas so how are you able to assure your customers that you can supply high-quality products on par with those made in Japan?

We adopt a global standard of quality to ensure that our products manufactured overseas are of the same quality as those made in Japan. We achieve this standard by dispatching our engineers to our overseas sites to train the local staff and we also take them to meet our customers so they can see exactly what the requirements are. We maintain our standards by regularly calling our overseas quality assurance staff to meetings in Japan. They come from sites in Taiwan, Thailand, Vietnam, Indonesia and India, and we train them all in Japan. We encourage effective communication based on common understanding and also try to incorporate any useful local knowledge into the Japanese way of production.

Your company has developed an anti-theft technology called the Smart System. Could you tell us a little bit more about this technology and how it enables you to protect the security of motorbikes?

The special thing about the Smart System is that you don't need to have a physical key. You can use a remote controller or be keyless in starting the engine. We are currently consulting with our clients to develop an integrated system to avoid theft. We’re trying to combat so-called ‘relay attacks’ that can be used to remotely steal the bike.

According to the ex-president of Honda, the motorcycle industry is expected to grow in the upcoming years by 7.5%. In fact by 2030, it is estimated that 1 out of 5 people in South East Asia will have a motorcycle. How do you plan to take advantage of this growth and what strategies will you be implementing to grow with the industry?

China used to be the leader in annual motorcycle sales but currently it is India with about 20 million to 25 million units sold per year whereas China and ASEAN each sell about 15 million. That accounts for most of the world's consumption of motorcycles, which is about 50 million to 60 million per year.

We are more focused on India and the ASEAN countries. We have our bases in Thailand, Indonesia and Vietnam and we have a close relationship with Honda and Yamaha who have a big market share in those countries, so we would like to continue working with them and developing products.

In ASEAN countries motorcycles are used for commuting and daily transport, but the Indian market is a bit different. They use a smaller motorcycle for their daily lives but at the same time they will also have a bigger motorcycle – above 300cc – and we just launched our factory two years ago in India, so we are still contemplating how to approach and penetrate the Indian market and we are now figuring out a way to engage in the market.

As for the European, US and Japanese markets, motorcycles are used more for hobby and leisure purposes, so there we are working together with the big four Japanese motorcycle companies as well as international companies such as Triumph, Ducati and KTM to develop the next generation of products.

Asahi Denso site overseas

The components your company makes have to work in a wide variety of environments around the world, how do you ensure that they can remain reliable across those varying climates and conditions?

Motorcycle switches must be strong against vibration and severe weather conditions as they are often left outside, under sunlight, heavy rain, and dust. They also need to be designed with an ergonomic approach and be downsized to fit in the limited spaces. We also focused on using the technology established for our motorcycle products for other types of vehicles such as boats and agricultural and construction vehicles which are typically subjected to harsher environmental conditions.

We perform many quality checks and do a lot of testing on our products, the results of which are fed back into the development cycle until we achieve the optimal level of quality for the product.

Our products fulfill those requirements and offer high-level performance and reliability that is recognized over the world.

In 2019 Japanese companies invested JPY 19 trillion in R&D, of which JPY 5 trillion came from the automotive industry and the motorcycle industry. Do you have any upcoming technologies or products that you'd like to share with our international audience?

Like many other Japanese companies, we put a lot of emphasis on R&D. For example, in terms of human resources, we have about 550 employees at our headquarters of which about 100 are in the R&D department. This is the second largest group of workers after the production line staff.

We’ve also established a research and development center in Thailand as well as in India. The Thailand site is to cater for the ASEAN market, and the reason why we have these overseas sites is because the use and preferences of motorcycles varies between regional markets and it is better to do market research and development if we are geographically located within the market.

So at the moment we are working closely with the Japanese, Indian and Thai research centers to come up with new research and development targets although unfortunately we cannot disclose information about new products at this point.

We’ve seen, for example, Harley-Davidson moving its production base to Asia in recent years. Do you have any plans to partner with western companies which may be looking to establish manufacturing processes in Asia?

We don’t engage in setting up production sites on behalf of western companies but we do have existing relationships with those who already have production facilities set up in the region. So for example our site in Thailand will communicate with Triumph, which also has a site in Thailand. Similarly, the Italian manufacturer Piaggio has a factory in Vietnam so we do business with them via our Vietnamese site.

What objectives would you like to achieve over the next five years, both professionally and personally?

I could answer this question in terms of sales or profit figures and by how much I would like to increase them but I am more focused on the fundamental happiness of our employees.

There are many answers to the question of who the company should be for – it could be for stakeholders, or for customers, for example – but I think the company’s most basic responsibility is for the happiness of its employees. Unless our employees are happy, we cannot satisfy our clients or our agencies or our stakeholders. So in five years from now I would like to proudly say that all our company employees are happy and that is also what I said two years ago when I became the CEO.