Deep dive into Denso: technology drives company's growth to top levels of automotive supply chain - Auto Diesel Tech

Diesel Progress North American Edition, Feb, 2004 by Rob Wilson

In 1949 Nippondenso Co. Ltd. was spun off from Toyota Motor Co. Ltd. with a modest capital base of [yen] 15 million, something less than $150,000 at today's exchange rate. In late 2003, the company now known as Denso Corp. projected record sales of $22 billion for its fiscal year ending in March, putting it comfortably among the top five OE automotive suppliers in the world.

Denso's growth very much parallels Toyota's success. In the years from 1988 to 2000, Denso total sales actually doubled. Though separated from Toyota for more than 50 years, very nearly 50% of Denso's sales are still credited to Toyota.

Conversely, however, that means some $11 billion in sales is to other automakers and engine builders of the world, and Denso is certainly out to win more. It consistently wire accolades from its customers. General Motors, for example, has named Denso supplier of the year For 10 consecutive years.

Denso's engine products are its largest product sector, representing 37% of its business, with climate control at 30%, computer-related products at 14%, with information and communication systems, instruments and small motors accounting For die balance. Information Technology Systems (ITS) are expected to be the largest area of growth in years ahead. The use of pre-crash safety systems and adaptive front lighting systems are also evolving rapidly.

Japan accounts for 57% of Denso's sales volume, the Americas for 23%, Europe for 12%, with the balance going to Asia, Oceania and other lands.

Following the 2003 Tokyo Motor Show, we received an extensive tour of Denso's R&D center, several engineering and production facilities, and were able to interview key executives and engineering managers about Denso developments and directions.

Our deep dive into Denso revealed a richly textured organization of 90,000 employees all seemingly moving in the same direction to produce world class quality products at the lowest cost with the least possible environmental impact.

"Denso considers environmental protection in all of its activities," said Koichi Fukaya, president and CEO, "including planning, development design, manufacturing, marketing and services. We are developing technologies that will reduce the environmental burden of vehicles.

"We're also tackling higher fuel efficiency, exhaust gas purification and automotive air conditioning systems that have minimal impact on global warming."

Denso's immediate strategy is to maintain its global leadership position in automotive air conditioning, achieve the leadership position in engine and powertrain products, and to further develop its ITS and telematics products, prominently including navigation systems. According to Hiroshi Uchiyama, senior managing director of Denso, the company is very focused on making ITS the third pillar of Denso's product portfolio.

Denso's efforts are backed by a strong commitment to research and development. The company R&D budget is typically in the range of 8% of net sales. The development work is organized into three areas: safety, environment, and information--matching up generally with the three product areas.

Specific product development, however, is separate from pure R&D and is "also budgeted separately. Some 70% of the corporate R&D would be classified as basic research in fields such as materials technology, semiconductors, nanotechnology, telecommunications, energy conversion, and biotechnology.

While most of this activity supports Denso's automotive-related product, the company indicates it will push into new fields if that's where its research takes it.

Denso automotive developments are both frequent and far ranging. In 2003 it introduced a novel new fuel pump, called the model GH, which is half the size of a conventional fuel pump and uses 25% less power. It is driven by a very compact d.c. motor with a high density winding. A highly optimized impeller on the pump helps achieve smooth fuel flow and efficiency.

On the diesel side, Denso has recently introduced a 26,000 psi common rail system, which meets Euro 4 emission regulations without a particulate filter. It is widely applied in Europe by Mazda, Toyota, and Nissan. Ford will adopt the new system in 2005. The system is currently being manufactured in Hungary and will also go into production in Thailand next year.

Denso claims to be the first fuel injection manufacturer to go into production with a common rail diesel injection system. That was in 1995. And this new system is currently the only one in production at the 26,000 psi range. A 29,000 psi system is being developed and it will use piezoelectric technology. That should see production in 2005.

The 26,000 psi bar system makes splitting a second like peeling an onion. Injectors can inject fuel in 0.4 millisecond intervals as precisely as one cubic millimeter per injection. Five multiple injections can be made each combustion stroke, and it may go to seven in the future, the company said.

The system also uses a software compensation method that compensates each injector individually for its manufacturing variance. Each injector has a two dimensional code that is read by the engine ECU and the system automatically compensates each injector by 0.5 cubic millimeters or less during injection.