Toyota and DENSO Reach Agreement on Transfer Contract for Consolidating Electronic Component Operations

Apr. 5, 2019 News Releases

KARIYA (Japan) ― Toyota Motor Corporation (Toyota) and DENSO Corporation (DENSO) announce that they have made a formal decision and reached agreement toward concluding a contract to transfer core electronic component operations to DENSO. In June 2018, both companies reached a basic agreement to consolidate the core electronic component operations of both Toyota and DENSO within DENSO, and began detailed studies.

Currently, Toyota’s electronic component operations are conducted by both Toyota and DENSO. In the future, these development functions and production operations will be consolidated within DENSO.

By consolidating these operations within DENSO, which has a high level of expertise in the field of electronic components, a speedy and competitive development and production structure will be established. In doing so, the aim is to also maximize resource utilization, such as by shifting resources created by eliminating duplicate operations within the Toyota Group to new domains that will increase the value of future mobility, thus strengthening the competitiveness of the Toyota Group overall.

Initial discussions focused on consolidation of production operations by the end of 2019, and development functions from 2022, but in order to ensure a smooth transfer and to create the new structure faster, both companies agreed to consolidate both development and production in April 2020.

 

Main points of the contract

1)   Consolidation of production operations for electronic components
On April 1, 2020, production of electronic components at Toyota’s Hirose Plant will be consolidated within DENSO. The land, production infrastructure (including buildings, equipment, and software), and other items at Hirose Plant will be transferred to DENSO.

2)   Consolidation of development functions for electronic components
On April 1, 2020, the development functions for electronic components will be consolidated within DENSO. Relevant drawings, development equipment, and other items will be transferred to DENSO.

To survive in this era of profound transformation, Toyota and DENSO are accelerating their efforts to enhance the competitiveness of the overall Toyota Group by further strengthening coordination in the Group.

About DENSO Corporation

DENSO Corp., headquartered in Kariya, Aichi prefecture, Japan has approximately 220 subsidiaries in 35 countries and regions (including Japan) and employs approximately 170,000 people worldwide. Consolidated global sales for the fiscal year ending March 31, 2018, totaled US$48.1 billion. Last fiscal year, DENSO spent 8.8 percent of its global consolidated sales on research and development. DENSO common stock is traded on the Tokyo and Nagoya stock exchanges. For more information, go to www.denso.com, or visit our media website at www.denso.com/global/en/news/media-center/