DENSO has been maintaining strong growth in essential automotive components. That growth is the result of expansion in new markets, new technologies, and strong relationships with our partners. To keep up that momentum, we are working on developing new products and applications for DENSO's automotive technology.

Our people are applying DENSO's traditional strengths in automobile systems in new electric cars. We have developed integral parts such as inverters, generators, and control units. And our technicians have modified sensors, air conditioners, and other traditional systems to work in vehicles that may take over the roads in the near future.

We have recently released new electronic toll collection equipment and other intelligent transport system products. And our business in areas removed from automobiles continues to grow: In 1996, our cellular phones had record sales, and our two-dimensional QR Code is finding applications in many new markets.

Alternative Power

DENSO supplies many components for Toyota's electric RAV 4. Those include meters and inverters (above left) designed specially for electric vehicles. We also make specialized generators (above right) for hybrid vehicles.

As emissions regulations get tougher, the potential role for electric cars gets bigger. We at DENSO develop components for all kinds of vehicles--including electric-powered cars. Our efforts in that new field paid off last year when Toyota's RAV4 EV electric car--with major components from DENSO--went on sale in Japan.

In addition to pure electric cars, DENSO is working on components for hybrid cars. Those vehicles have an electric power system and an engine to generate electricity or, in some systems, to supply auxiliary power to the wheels. Many of the parts that go into hybrid cars are similar to those in their pure-electric cousins.

DENSO's work in electric and hybrid vehicles spans two categories: propulsion system components and auxiliary components. We have developed inverters to change direct current to the alternating current that powers the drive motor. Our people have also come up with a highly accurate charge gauge to indicate how much energy is left in the battery.

Because electric vehicles have no engine, cooling and heating systems need to get their power from the drive battery. That, however, affects driving range. So, we developed a highly efficient heat pump system that features an innovative electric compressor and inverter. Our new system is so efficient that the heating function, for example, consumes up to two-thirds less power than conventional electric heaters. Thus, drivers of electric vehicles can enjoy the comfort of a conventional car without worrying about running down the batteries.

Smarter Highways

DENSO is producing new intelligent transport systems, such as equipment for electronic toll collection.

As the number of vehicles on the world's roads increases, so does the need for better ways to manage traffic. New technologies show promise in creating smoother and safer motor transport.

We expect cumulative sales in the emerging market for so-called intelligent transport system (ITS) products in Japan to reach 50 trillion yen by 2015. And DENSO-made equipment will play an important part in the growing ITS market. That will include products such as car navigation equipment and services, electronic toll collection systems for highways, vehicle management systems, and other information-intensive systems.

Work in car navigation at DENSO dates from 1983, when we started research into those systems. We have marketed a variety of car navigation and related products in Japan. And we are working on systems that pick up valuable information from outside the vehicle and transfer it to the driver.

Our communication system for commercial vehicle management, the Advanced Vehicle Operation System (AVOS) is another information-intensive system we are marketing in Japan. It tracks trucks and other vehicles across the nation, providing dispatchers information such as arrival times and drivers with traffic conditions and route changes. In September we started operations at a subsidiary to provide the satellite communications services for AVOS. DENSO markets the system components and software.

We also played an important part in the development of an electronic toll collection system for roads in Illinois. Our in-vehicle equipment, antennas, and smart cards help relieve congestion by letting drivers pay tolls without stopping.

Picking Up

Separating water from anitfreeze provides for cleaner disposal of used engine coolant.

Along with impact at the manufacturing stage, we are designing our components to have minimal environmental impact once they are on the road. Switching from ozone-harmful chlorofluorocarbon to safer alternatives was just one way we protect the environment.

The DENSO refrigerant recycler is a compact, convenient, system for collecting chlorofluorocarbon (CFC) gas during maintenance work on conditioners. It also removes oil, water, and other contaminants from the gas before putting it back in the car. In the past year, we also marketed an attachment to the unit that allows for collection of hydrofluorocarbon (HFC), an ozone-friendly substitute to CFC.

Our new engine coolant separator/concentrator allows for better disposal of used radiator fluid. Developed in cooperation with Toyota, the system separates the antifreeze and water in engine coolant. The output ethylene glycol is pure enough to use as a fuel additive in incinerators, boilers, and other applications. And the water meets rigorous municipal guidelines for waste disposal.

New Fields

DENSO automotive technology has spawned many spinoff products. Robots, cellular telephones, barcode readers, and others now make up an important and growing portion of our revenues.

During the past year, DENSO introduced seven new models of our cellular phones and their fast-growing personal handyphone system cousins. Telecommunications products have become big business for us, with 61.7 billion yen in revenues from portable communicators and related products.

The DENSO-developed two-dimensional Quick Response (QR) Code and its readers have made a big market impact in the past year. Those codes can hold up to 100 times more data than a barcode of similar size. Applications for QR Codes are growing in fields as diverse as manufacturing, distribution, medicine, and retail. Delivery companies are using the new codes in high-speed sorting systems. Manufacturers have started to use the code for managing data such as customer lists and orders to suppliers. And we are looking for QR Code to be the new de facto standard in printed data storage.

DENSO is an automobile component manufacturer. But we are always ready to develop new applications for our technologies. Other-than-automobile products are bringing some diversity to our company and at the same time creating new sources of revenue.