2010
NTN Signs an Alliance Memorandum in the Bearing Business with Luoyang LYC Bearing Co., Ltd.April 20, 2010
NTN Corporation (NTN) and China's Luoyang LYC Bearing Co., Ltd. (Luoyang LYC) have signed a memorandum that confirms the intention to begin study of an alliance between the two companies related to the bearing business, which the establishment of a joint venture to manufacture and sell automotive bearings in China.
1. Purpose of establishing a joint venture
As one of the issues emphasized in a new medium-term management plan “NTN 2010 for The Next Step”, NTN is accelerating the enhancement of sales and production system in emerging nations. NTN has been expanding a business of various automotive products in which NTN has high technologies and market share, including the top market share in the world for hub bearings, as well as industrial machinery products for the Chinese market where demand is rapidly increasing.
Luoyang LYC is a top-of-the-line Chinese bearing manufacturer. It boasts a wide sales and procurement network in China, and it aims at further development of sales in the automotive market.
By establishing a joint venture that will manufacture and sell 2nd and 3rd generation hubs and needle roller bearings in China, NTN and Luoyang LYC will achieve a high level of both quality and cost competitiveness, and will work toward increasing sales to automotive manufacturers both inside and outside of China. NTN and Luoyang LYC will also examine the possibility of an alliance that mutually utilizes the sales networks of both companies toward expanding sales of automotive and industrial machinery products in China.
2. Future plans
A joint-venture agreement is scheduled to be concluded by the end of July of 2010 followed by establishment of the joint venture and a technical license agreement to be entered into by the end of August. Mass production by the joint venture is expected to begin by the end of October of 2011. The total investment in that company is planned at about one billion yuan (about 13 billion yen).
Including those alliance-related sales, NTN aims at 100 billion yen sales in China within 5 years, by fiscal year 2015.
3. Outline of the alliance partner
| (1) Company name | Luoyang LYC Bearing Co., Ltd. |
|---|---|
| (2) Line of business | Manufacture and sales of various bearings |
| (3) Location | No. 96, Jianshe Road, Luoyang City, Henan Province, China |
| (4) Establishment | 1954 |
| (5) Registered capital | 1.13 billion yuan (about 14.7 billion yen) |
| (6) Annual sales | 2.7 billion yuan (about 35.1 billion yen) |
| (7) Employees | Approx. 9,900 |
President and General Manager Chen, Luoyang LYC and Chairman and CEO Suzuki, NTN at the signing ceremony
Reference
What are hub bearings?
3rd generation hub bearing
Hub bearings are installed inside the wheels of cars and play an important and indispensable role in the operation of each vehicle by enabling the wheels to rotate while supporting the load from the weight of the car body.
Hub bearings have evolved from their 1st generation to the 3rd generation design through the pursuit of ease of assembly and, as the generations advanced, they have become more unitized and the number of parts has decreased, resulting in a lightweight, compact design that also contributes to improving fuel consumption.
NTN offers all of kinds of hub bearings through its global supply system, and provides hub bearings to automotive manufacturers throughout the world.
What are needle roller bearings?
Needle roller bearings
Needle roller bearings are a type of roller bearing, with long, slender, needle-like rollers built into the rolling element. Their main features include a high load-carrying capacity and high rigidity for their size, and their use enables the design of lightweight, compact machinery.
Due to such features, many needle roller bearings are used for applications in which space-savings and a high load-carrying capacity are required, such as in automotive transmissions, etc.
NTN, which began producing needle roller bearings in Japan in 1962, has earned the trust of its customers over many years through superior cost competitiveness and state-of-the-art technology.