Fuji Oozx is one of hundreds of automotive parts suppliers in Japan whose very existence is being threatened by the world’s shift toward electric vehicles.
For almost 70 years, the company has been making intake valves, an essential component of any petrol car that controls the flow of gas in and out of an engine’s cylinder. Typically made of copper, they are light and highly heat-resistant and use a decades-old technology that is not needed in any electric car.
“We have to start looking for a new business,” President Satoshi Tsujimoto, 63, said from his office adjacent to Fuji Oozx’s factory in Shizuoka prefecture, an elongated region that traces the coast of the Pacific Ocean. Fuji Oozx supplies car makers including Toyota Motor and Nissan Motor.
We have no choice but to fight for survival
Satoshi Tsujimoto,
president of Fuji Oozx
Valves for boat engines are one option but the Tokyo-listed company’s board is also looking farther afield, perhaps branching into medical devices. “We have no choice but to fight for survival. We’ll have to find an answer in the next decade,” Mr Tsujimoto said.
His predicament is one that other suppliers of traditional automotive parts around the world are confronting as the industry accelerates its shift away from the combustion engine. They either make the shift too, or find completely new avenues of business. The situation is particularly acute in Japan, where the government has pledged to go carbon neutral by 2050. A key part of that will be transitioning to cleaner cars, which currently only make up about 1 per cent of vehicles, compared with 30 per cent in parts of China, the global EV trailblazer.
Management consultancy Arthur D Little predicts that as many as 300,000 jobs may disappear in Japan if the automotive sector makes a full shift to EVs, equal to about 10 per cent of all jobs in the industry. In the US, it is estimated about 75,000 jobs could be lost if battery electric vehicles make up around 50 per cent of domestic auto sales by 2030.
“It’s the boiled frog phenomenon,” Arthur D Little consultant Kensuke Sobue said. Japan risks slowly but surely losing jobs as other countries, notably China, nurture the EV sector, creating employment opportunities.
Shizuoka is home to a many auto parts suppliers that count some of the industry’s biggest names as clients. It is one of Japan’s key centres for combustion-engine car-part manufacturers, accounting for more than half the prefecture’s supply chain in 2018, figures from the Shizuoka Economic Research Institute show.
After the Second World War, Shizuoka flourished. By the 1960s, the coastal city of Hamamatsu, the birthplace of legendary motorcycle manufacturers Yamaha Motor, Honda Motor and Suzuki Motor (there is a car and motorcycle theme park there to this day), was churning out the most two-wheelers anywhere in the world.
Motorcycle output peaked in the early 1980s but Hamamatsu embraced petrol cars. A decade ago, the city had an estimated 2,000 auto-parts makers supporting almost 100,000 jobs. As Hamamatsu’s two other major sectors – textiles and musical instruments – declined as cheaper manufacturing centres popped up elsewhere in Asia, auto suppliers held their ground.
Now, it is hard to see how they can hold back the rising electric car tide much longer.
Honda has said it will not sell combustion-engine cars beyond 2040 and has urged suppliers to get on board. Even Toyota, something of a laggard when it comes to going all electric, introduced a new battery-electric-vehicle series, Toyota bZ, in April as it works to eventually establish a full lineup of EVs, which would include hybrids and fuel-cell cars, starting with 70 models by 2025.
Conventional cars have about 30,000 parts, far more than electric ones, which can run without engine blocks, fuel pumps or mufflers. There’s competition also from China, where small, cheap electric cars are being mass produced in their thousands.
Authorities in Shizuoka are aware of the coming revolution. In 2018, they set up a next-generation car institute to help parts makers develop new EV components. The body receives funding from Japan’s Ministry of Economy, Trade and Industry to assist businesses with the transition.
“We’ve felt this sense of crisis well before Japan’s carbon-neutral announcement,” said Eiji Mochizuki, the research institute’s head. But while larger suppliers are making plans to adapt, smaller ones are still sleeping, he said. “We’re trying to wake them up.”
That may be easier said than done. Many smaller suppliers are already surviving on razor-thin margins, a function of the tactics employed by powerful buyers such as Toyota, which often pits parts makers against each other and selects the one that can make widgets the cheapest. Spare cash to expand into another area does not exist.
“Honestly, it’ll be hard to survive,” said Masakatsu Suzuki, the 56-year-old owner of Masa Engineer, a small business that makes equipment to assemble and check auto parts. “I wish I could actively make a move.”
Mr Suzuki has been in business for about 25 years. He worries about how he will pay his four workers as EVs become more popular; automobiles he likens to cheap panda cars at amusement parks – “all you need is a battery, a steering wheel and a chair.”
Others simply do nolt see EVs as an immediate threat.
Yaichi Sakai runs Hamamatsu Gasket, a family business passed down by his father. Among other things, the 67-year-old company makes cylinder-head gaskets, which provide the seal between an engine block and cylinder head that prevents coolant or engine oil leaking inside. Although cylinder-head gaskets are not needed in EVs, other sorts of seals are to shield an electric car’s motor from dust and water.
“I don’t have a sense of crisis now because gas-powered cars aren’t going to be zero immediately,” Mr Sakai said. He estimates about 20 per cent of Hamamatsu Gasket’s products will not be necessary in an EV era but says sticking to parts for engines is still more profitable in the short term.
RESULT
Arsenal 1 Chelsea 2
Arsenal: Aubameyang (13')
Chelsea: Jorginho (83'), Abraham (87')
ABU DHABI CARD
5pm: UAE Martyrs Cup (TB) Conditions; Dh90,000; 2,200m
5.30pm: Wathba Stallions Cup (PA) Handicap; Dh70,000; 1,400m
6pm: UAE Matyrs Trophy (PA) Maiden; Dh80,000; 1,600m
6.30pm: Sheikha Fatima bint Mubarak (IFAHR) Apprentice Championship (PA) Prestige; Dh100,000; 1,600m
7pm: Sheikha Fatima bint Mubarak (IFAHR) Ladies World Championship (PA) Prestige; Dh125,000; 1,600m
8pm: Sheikh Zayed bin Sultan Al Nahyan Jewel Crown (PA) Group 1; Dh5,000,000; 1,600m
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
The%20Roundup
%3Cp%3EDirector%3A%20Lee%20Sang-yong%3Cbr%3EStars%3A%20Ma%20Dong-seok%2C%20Sukku%20Son%2C%20Choi%20Gwi-hwa%3Cbr%3ERating%3A%204%2F5%3C%2Fp%3E%0A
How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
The Freedom Artist
By Ben Okri (Head of Zeus)
IPL 2018 FINAL
Sunrisers Hyderabad 178-6 (20 ovs)
Chennai Super Kings 181-2 (18.3 ovs)
Chennai win by eight wickets
PLAY-OFF%20DRAW
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The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
India cancels school-leaving examinations
The five pillars of Islam
MATCH INFO
Syria v Australia
2018 World Cup qualifying: Asia fourth round play-off first leg
Venue: Hang Jebat Stadium, Malayisa
Kick-off: Thursday, 4.30pm (UAE)
Watch: beIN Sports HD
* Second leg in Australia on October 10
TECH%20SPECS%3A%20APPLE%20WATCH%20SERIES%209
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Read more about the coronavirus
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Jumanji: The Next Level
Director: Jake Kasdan
Stars: Dwayne Johnson, Kevin Hart, Karen Gillan, Jack Black, Nick Jonas
Two out of five stars
The%20Emperor%20and%20the%20Elephant
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Killing of Qassem Suleimani
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
How to tell if your child is being bullied at school
Sudden change in behaviour or displays higher levels of stress or anxiety
Shows signs of depression or isolation
Ability to sleep well diminishes
Academic performance begins to deteriorate
Changes in eating habits
Struggles to concentrate
Refuses to go to school
Behaviour changes and is aggressive towards siblings
Begins to use language they do not normally use
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
West Indies v India - Third ODI
India 251-4 (50 overs)
Dhoni (78*), Rahane (72), Jadhav (40)
Cummins (2-56), Bishoo (1-38)
West Indies 158 (38.1 overs)
Mohammed (40), Powell (30), Hope (24)
Ashwin (3-28), Yadav (3-41), Pandya (2-32)
India won by 93 runs
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet