1. Expansion of the thermal business

[1] Launching Brazil’s first car A/C business

Following the implementation of the government’s “Summer Plan” economic policy in January 1989, the Brazilian economy became excited with expectation, and its real GDP growth rate recovered to a 3.6% year-on-year increase.
The automotive industry also flourished and saw a flurry of new vehicle introductions as the economy reversed course from its zero-growth trajectory and finally began to show signs of an end to this period. NDBC also received orders from Fiat regarding the Heating Ventilation and Air-Conditioning (HVAC) system for the TEMPRA. NDBC began mass production of this system in 1990.

Although the installation ratio of car A/Cs was still only about 15% at the time, this ratio was expected to reach roughly 60% by 2000. Consequently, NDBC began operating the first car A/C plant for DENSO in 1991. Automobile manufacturers were also raising their localization ratios under localization regulations, which drove an increasing demand for cost reductions. NDBC built a new air conditioner plant ahead of its competition in aims of contributing to customers in the form of A/C systems and of expanding sales for DENSO.
In order to launch the business, NDBC built this new air conditioner plant with a floor area of 4,800 m2 on the grounds of the Curitiba Plant, where it installed air conditioner assembly and condenser lines. The plant details and specifications were basically planned by the local side.
However, this recovery in the Brazilian economy was little more than a temporary relief. When it became clear that the “Summer Plan” had failed, the consumer price inflation rate for 1989 reached a record high of 1,319.6% year-on-year, only to surpass this again the following year in March 1990 as it reached a new record high of 84.3% over the previous month.
Elected in November 1989, President Fernando Collor de Mello consequently launched the “Collor Plan” in March 1990. This plan sought to reduce Brazil’s budget deficit more thoroughly while at the same time freezing deposits in order to curb inflation. This freeze on deposits directly hit DENSO’s plans to build its new plant, and extended plant construction from what should have taken about 10 months to complete, to roughly one and a half years.
Likewise, the opening ceremony for the new plant was finally held in April 1992. The ceremony was held in conjunction with the 10-year anniversary of NDBC’s operations, and was attended by approximately 200 guests, including government officials from Paraná and Curitiba, President & CEO Tsuneo Ishimaru of DENSO Headquarters, Senior Executive Director Chosei Ujiie, and customers and suppliers from Brazil and abroad.

Following completion of the new air conditioner plant, NDBC also began producing condensers, pipes, and hoses in addition to compressors and HVAC systems in an effort to gradually transform itself into a car A/C system supplier.