1. Expansion of the thermal business

[4] Entering Argentina and establishing a joint venture company

In January 1995, Brazil, Argentina, Uruguay, and Paraguay concluded a customs duty union, thereby establishing MERCOSUR (Southern Common Market) in an effort to stimulate trade among the four countries. In response to this move, Fiat planned to expand production at its plant in the city of Córdoba, and Toyota Motor planned to open a new plant to produce the HILUX.
DENSO also conducted market research starting at the outset of the year as part of its investigation into opening a new plant in Argentina, which would become the second South American country it would enter after Brazil. In response to an official request from Fiat and Toyota Motor, in April of that year DENSO began an earnest investigation into this move. In March 1996, in partnership with Magneti Marelli Climatizzazione (MMCL), DENSO established a new company called Magneti Marelli DENSO in the city of Córdoba, where Fiat Argentina was located.
Having built up extensive experience in South America, Masahiko Osuka was appointed President & CEO in the new company. Annual production was forecast to reach 100,000 units for Fiat and 20,000 units for Toyota Motor.
MMCL was an Italian manufacturer of car A/Cs, and its parent company, Magneti Marelli, formed a comprehensive partnership agreement with DENSO, with DENSO and Magneti Marelli taking equity stakes in their respective subsidiaries in Europe. Under this partnership, DENSO held a 25% stake in MMCL.