Japan's No. 3 car light maker aims high with French partner

Ichikoh and Valeo hope to re-energize alliance with ownership shake-up


TOKYO — Ichikoh Industries, Japan’s third-largest auto lamp manufacturer, will welcome Heiko Sauer as its new president and COO in June. Sauer will be the second chief who comes from Ichikoh’s French parent Valeo, after current president Ordoobadi Ali.

In January this year Ichikoh became a Valeo subsidiary as the French parts maker raised its ownership in the Japanese manufacturer from 32% to 55%. The two plan to fundamentally review their strategies and work together better to expand further in the global market. Next-generation technologies will be a main focus.

The partnership began in 2000 when Nissan Motor, then the largest shareholder of Ichikoh, handed over its stake in Ichikoh to Valeo. However, over the past 17 years, the partnership has not been especially fruitful, mainly because both manufacturers stuck to their own products and territories.

“The company’s profitability is weak while its competitiveness in development is limited,” an Ichikoh executive said. “We’re nothing more than the No. 3 parts maker.”

Ichikoh lags far behind Koito Manufacturing, Japan’s top car lamp maker, and the gap between the two is widening.

For the year through March 2016, Ichikoh group sales totaled 102 billion yen ($939 million), while Koito posted eightfold that of Ichikoh at 813 billion yen. Back in 1996 Koito’s sales were 212 billion yen, about twice those of the 113 billion yen for Ichikoh.

Whether that can be chalked up to Ichikoh performing poorly or Koito doing well, one thing is for sure: Ichikoh has been slow to expand into overseas markets. Its overseas sales ratio is currently 23%, much lower than 62% for Koito.

After Nissan cut the strings, Ichikoh expanded its customer base to Toyota Motor and other automakers. Ichikoh and Valeo also worked together on joint procurement of parts.

However, over the years the two have been heading in different directions, with Ichikoh focusing on Japan and Southeast Asian markets while Valeo expanded in the Americas. Disparate coverage has hampered them from making the most of the partnership, according to a source close to Ichikoh.

Source: Nikkei Asian Review