2. Aiming for a further leap forward
[2] Integrating three companies (with the aim of improving customer proposal capabilities and efficiency)
As described thus far, there are five DENSO group companies in South America, four in Brazil and one in Argentina, each of which has different backgrounds, capital relationships, and management systems.
- DNBR, which traces back to the establishment of NIPPONDENSO REFRIGERACOES LTDA. (NDB) in 1975
- DNAR, established as a joint venture with MM
- DMBR, which became part of DENSO South America following the acquisition of MMM
- DTBR, established as a Brazilian subsidiary of MMCL
- DNAZ, established as a fully-owned subsidiary of DNBR
Of these, DNBR, DMBR, and DTBR will undergo a business merger in January 2024. This move seeks to reduce fixed costs further by eliminating overlapping areas in the sales, general, administration, and other indirect divisions, and aims to improve management efficiency, strengthen governance, speed up management, and enhance customer service capabilities.
Since 2016, structural reforms and a market recovery have put DENSO South America back on a growth trajectory. Behind this integration lies DENSO’s intention to restructure its production and supply systems, as well as strengthen management mobility, in a way that reflects its experience in overcoming economic crises, and thereby build a structure that can survive in the highly volatile South American market. DNAR and DNAZ are not included in this concept because DNAR is difficult to integrate across borders due to differences in legal and tax systems, while DNAZ must maintain its independence from the viewpoint of actively using the Manaus tax incentives.
DENSO’s future initiatives for the South American market are likely to be based on the key words of electrification and safety. Whereas policies intended to protect the ethanol industry are expected to ensure vehicles continue to be equipped with internal combustion engines in South America for some time, the market will likely see the gradual tightening of emissions regulations and energy efficiency regulations, as well as progress in electrification, albeit slowly, in order to achieve a decarbonized society on a global scale.
On the other hand, with more fatal motor vehicle accidents per 100,000 people than anywhere else in the world, the reality in Brazil means that the introduction of safety products is an urgent issue.
DENSO South America will continue to contribute to its customers and society by solidifying its business foundation as it increasingly addresses these challenges and demands.