2008 Progress Accelerating Distinctiveness

Railway, Automotive & Machinery Parts
Business Strategy
– Accelerating Distinctiveness –
1
Consolidated Sales by Each Sector
Sales target for FY 2006: Consolidated total sales of 100 billion yen
Automobile and construction
machine products 45 %
Railway products 40 %
Wheels
Axles
Brake disks
Bogie trucks
Couplers
Domestic 35 %
Crankshafts
Front axles
Aluminum wheels
Retarders
U.S. and China 10 %
Industrial equipment and
mechanical parts 15 %
2
VC rolls
High-pressure vessels
Dies & molds
Ring products
Railway Products - Part 1
Couplers
Bogie trucks
3
Railway Products - Part 2
Bogie trucks
Forged steel brake disks
Wheels
Driven wheelsets
Axles
Gear units
4
Automobile and Construction Machine Products
Engines for automobiles
(cross section)
Front axles for
trucks
Small-size crankshafts for
passenger cars
Large-size crankshafts for trucks and buses
5
Domestic Market Share of Products
Products
Railway
products
Automobile
and
construction
machine
products
(Based on our estimation)
Market share
Wheels
100 %
No. 1
Axles
100 %
No. 1
Forged steel brake disks
100 %
No. 1
Gear units
60 %
No. 1
Couplers
80 %
No. 1
Bogie trucks
25 %
No. 1
Small-size crankshafts for passenger cars
20 %
No. 1
Large-size crankshafts for trucks and buses
75 %
No. 1
Over 80 % of our whole sales have top shares of the respective markets
6
Growth of Sales Amount and Medium-Term Business Plan (Consolidated)
120
110
Industrial equipment and mechanical parts
Automotive products
Sales (JPY billion)
100
95
Railway products
100
77.9
80
64
66.4
67.5
02
03
60
40
20
0
01
7
04
05
06(Target)
08(Plan)
Strategies of Railway Product Business
• New technologies to domestic
markets
• Approach to overseas markets
8
Railway Products
Domestic: Increase of the Value Added by Offering Technologies for Higher
Speed and Functionality
Local line
High functionality
High
functionality
• Noise damped
wheels
• LightLight-weight
corrugated wheels
Shinkansen
High speed
• Tilting (control)
system
High
functionality
• LowLow-noise gears
Target
High speed
9
High speed
• Active
suspension
system
Railway Products
Highly Functional Products for Local Lines
Light-weight corrugated wheels
FEM image
Weight saved
by 7%
341kg/p
317kg/p
Noise damped wheels
Noise
damping
rings
Regular wheel
Round sectioned
ring type
Sandwiched ring
type
Effect of noise reduction by 10 to 20 dB
10
Railway Products
Technology for Higher Speed for Local Lines
Pneumatic spring tilting system
Max 2 degrees of
傾斜角　最大２°
g angle
tiltin
Exhaust Intake
for
for
ting
lif給気上昇
lowering
排気下降
Pneumatic
空気ばね
spring
Speeding up on the curved track ：
Meitetsu Airport Limited Express
max. +15km/h
・Customer’s top priority: traveling from Nagoya station to the Airport
“ within 30 min. ! ”
・Achievement of 28 min. by our new technologies
11
Railway Products
Technology for Higher Functionality for Shinkansen
Development of low-noise gears by our unique load tester
Conventional
Noise level [dBC]
gear tooth profile
Newly developed
gear tooth profile
Speed [km/h]
・Effect of noise reduction with newly
・World’s only gear unit load tester in the
anechoic room
・Max turning speed: 10,000rpm
（equivalent to 500km/h）
12
developed gear tooth profile (patent
pending）
Railway Products
Technology for Higher Speed for Shinkansen
Without controlled
Hayate of JR East
Lateral oscillation
Active suspension system: World’s first success in practical use
Controlled
Actuator
Cancel
Oscillation
Wheelset
13
Lateral oscillation
Vehicle body
Overseas - Part 1:Trend in Demand for Wheels in U.S.
Railway Products
Demand (thousand pieces)
2,500
1,500
1,000
500
0
01
02
03
04
05
06
07
08
(Forecast) (Forecast)
・Recurrence to railways for energy saving
Background of increase of demands
・Increase of distribution of import goods from China (West
Coast to East)
・Severer replacement standard → Shorter service life of wheel
14
Railway Products
Capacity Expansion of Wheel
240
Production volume (thousand pieces)
250
200
200
Production capacity
170
190
170
150
140
200
Wheels
for
export
110
100
Wheels
for
domestic
market
50
0
01
03
05
06(Target)
08(Plan)
Increase of our production capacity to meet the robust demands for wheels in U.S.
15
Overseas - Part 2:Shinkansen Projects in Taiwan and China
Railway Products
（Based on our estimation）
5
High-speed trains for China
Mid-speed trains for China
Sales (JPY billion)
4
Taiwan Shinkansen
3
2
1
0
03
04
05
06
(Target)
07
(Plan)
08
(Plan)
・Delivery of the parts to be installed in Shinkansen-type vehicles such as wheels, axles, gear
units and couplers
・Taiwan Shinkansen: Completion of the delivery of parts for new vehicles
・High-speed railway network in China: Plan to manufacture five thousand new vehicles in three
years.
(Number of Shinikansen vehicles in service in Japan: approx. four thousand vehicles)
16
Target for Sales of Railway Parts
Railway Products
50
Sales (JPY billion)
40
Export
30
Domestic market
20
10
0
01
17
03
05
08
Production Volume of Each Forged Steel Wheel Manufacturer
in the World
（Based on our estimation for FY05）
Railway Products
Vyksa (Russia)
N (Ukraine)
NT(Russia)
Global total:
approx. 3 million pieces
Maanshan (China)
S.S (US)
200
Sumitomo Metals
(FY2006 target)
Bona. (Czech)
Other cast steel wheels:
approx. 1.3 million pieces
Sumitomo Metals
Including wheels for highspeed trains
BVV (Germany)
Lucchini (Italy)
Only for local lines
Tai Yuan (China)
Top
production volume among wheel manufacturers1for
高速車両用車輪のメーカーで、生産量第
位
high-speed vehicles
【 質と量で世界一 】
Valdunes (France)
【 質と量で世界一 】
DSP (India)
[ Top quality and highest volume in the world]
Smorgon (Australia)
MWL (Brazil)
Others
0
18
100
200
300
400
500
Annual production volume
600
700
(thousand pieces)
Railway Products
Summary of Railway Product Business Strategy
1. Expansion of domestic railway business
• Promotion of the technologies for higher
speed and functionality to increase the
value added.
2. Approach to overseas markets
• Increase of our production capacity to
expand the sales of wheels for U.S. market.
• Participation in the projects in Taiwan and
China.
3. Implementation of the above-mentioned
initiatives to increase the sales by 15 %
from FY 2005 to FY 2008.
19
Strategies of Automobile and
Construction Machine Product Business
[Trend]
1. Worldwide expansion of automobile
production volume
2. Increase in use of forged steel crankshafts
3. Increase of V type-engines
20
Automobile and
construction machine
products
Worldwide Automobile Production Volume and
Future Outlook
(Based on our estimation)
Production volume by each region (million vehicles/year)
Worldwide
Worldwideautomobile
automobileproduction
productionvolume:
volume: Increase
Increaseby
byapprox.
approx.17
17%%(from
(from2005
2005to
to2015)
2015)
Automobile production volume by each region
80
70
The numerical values indicate the indices based
on the year 2005 as 100.
100
103
106
60
50
Other regions
40
Japan
30
Asia including
China
20
10
North America
125
150
100
110
100
107
113
126
2005
2006
2008
2015
0
2001
21
117
2002
2003
2004
Automobile and
construction machine
products
Comparison Between Forged Steel Crankshaft and Cast Iron Crankshaft
Characteristic
Forged
steel
Impact factor
Strength
{
Rigidity
U
Machinability
{
U→{
Machining costs
Manufacturing
costs
{
U→{
Costs
Functionality
22
Cast iron
Reliability and fuel
economy
Low oscillation and
low noise
Automobile and
construction machine
products
Share of Forged Steel Crankshaft for Automobiles
(Based on our estimation)
• •Smaller,
Smaller,more
morepowerful
powerfulengine
enginewith
withhigher
higherfuel
fueleconomy
economy⇒⇒Expansion
Expansionofofuse
useofofforged
forgedsteel
steelcrankshafts
crankshafts
• •Increase
Increaseininuse
useofofforged
forgedsteel
steelcrankshafts
crankshaftsininNorth
NorthAmerica
Americafrom
from40
40%%inin2005
2005toto60
60%%inin2015
2015
Share of forged steel crankshafts (%)
100
Use of forged steel crankshafts for automobiles
90
75%
80
64%
70
80%
80%
65%
68%
60%
Japan
60
60%
50
U.S.
55%
DCIクランク軸（=Ductile
Cast Iron 鋳物）
Europe
51%
40
40%
30
20
8%
10
0
1990
23
1995
2000
2005
2008
2015
Automobile and
construction machine
products
Mass-Production of V-Type Forged Steel Crankshaft
Conventional six-cylinder engine
Conventional crankshaft (For 3-liter passenger cars)
Total length: - 30 %
V-type six-cylinder engine
V-type crankshaft
Weight: - 1/3
33kg/p→22kg/p
Gnarled shape - advanced forging technologies are required.
Needs of automobile manufacturers
Our technologies achieved the world’s first
success in developing forging technology.
Demand for development of V-type
forged steel crankshafts
for smaller, more powerful engines
World’s first success in massproduction
24
(Award for Excellence in Formings granted by the
Minister of International Trade and Industry)
Automobile and
construction machine
products
Overseas Crankshaft Business and Production Capacity
Year
Facility construction
1992
ICI (US)
First term
6,000-ton die forging press line installed
1997
ICI (US)
Second term
7,000-ton die forging press line installed
2004
Huizhou Sumikin (China)
First term
6,000-ton die forging press line installed
(2008)
Huizhou Sumikin (China)
Second term
(Under construction)
(2009)
ICI (US)
Third term
(Under construction)
ASEAN (Undecided)
First term
------
Sumitomo’s production capacity
Production capacity (million pieces)
10
9
8
Japan
U.S.
7
China
ASEAN
(100)
6.3
5
3.4
4
(116)
7.3
+1
6
3
(159)
10
+1.2
+0.3
+1.2
4.1
2.3
2
1
0
1990
25
1995
2000
2005
2008
2015
Automobile and
construction machine
products
Sales Volume of V-Type Forged Steel Crankshafts
Installation
Installationof
of“Twisters”
“Twisters”to
tomeet
meetincrease
increaseininsales
salesvolume
volumeof
ofV-type
V-typeforged
forgedsteel
steel
crankshafts
by
luxury-oriented
trends
crankshafts by luxury-oriented trends
Sales volume (million pieces/year)
6
Our sales performance
5
4
Others
3
2
V-type
crankshafts
1
0
90
26
95
00
05
Automobile and
construction machine
products
Aim Over 10 % World Share
•Expansion
•Expansionininthe
theworld
worldmarket
market
•Leading
to
growth
in
Japanese
•Leading to growth in Japaneseautomobile
automobilemanufacturers’
manufacturers’production
production
•Resulting
in
an
increase
in
Sumitomo’s
crankshaft
business
•Resulting in an increase in Sumitomo’s crankshaft business
through
throughour
ourresource
resource
Achievement of Global 10
Osaka
Europe
Approx. 21 million
vehicles
China
Approx. 10 million
vehicles
Asia
Approx. 10
million vehicles
2005 3.4 million pieces
2008 4 million pieces
2015 4 million pieces
Japan
Approx. 11 million
vehicles
North America
Approx. 19 million
vehicles
ICI
2005 1.3 million pieces
2008 1.5 million pieces
2015 2.7 million pieces
Huizhou Sumikin
New facility
2005
2015
2005
2008
2015
27
0 million pieces
1.2million pieces
2005 0.3 million pieces
2008 1.8 million pieces
2015 2.1 million pieces
South America
Approx. 5
million vehicles
Worldwide automobile
production
Japanese manufacturers
Sumitomo’s
production
65 million vehicles
22 million vehicles
5 million crankshafts
69 million vehicles
25 million vehicles
7.3 million crankshafts
76 million vehicles
31 million vehicles
10 million crankshafts
Sumitomo’s
share
8%
11%
13%
Automobile and
construction machine
products
Production Volume of Forged Steel Crankshafts
(Based on our estimation for FY 2005)
Sumitomo Metals
Aichi Steel
KAKUTA IRON WORKS
Global total of
38.4 million pieces
Bharat Forge (India)
Forja de Monterry (Mexico)
Automobile manufactures’
inhouse manufacturing
Others
Annual Production Volume
28
(million pieces)
Automobile and
construction machine
products
Crankshaft Business Strategy
Business climate
1. The automobile production will grow in China and U.S.
2. The forged steel crankshafts will be increasingly used.
3. The trends in crankshafts will shift to the V-type
crankshafts that require advanced forming
technologies.
Business strategy
1. Active approach to the markets in North America and
China
2. Focus on high-grade crankshafts and acceleration of
distinctiveness at each facility around the world
3. Increase of our sales by 17 % from FY 2005 to FY 2008
29
Source of Strengths and Business Strategies
of Railway, Automotive & Machinery Parts Company
30
Cycle of Manufacturing
31
Engineering
design
Manufacturing
Evaluation/
improvement
In service
Cycle of Manufacturing by Ordinary Manufacturer
Manufacturer
User
Drawing
Specifications
Engineering
design
Manufacturing
No more than drawingbased manufacturing
Delivery
Evaluation/
improvement
32
In service
Cycle of Value Added Manufacturing by
Railway, Automotive & Machinery Parts Company
Capability of rotating the whole cycle by ourselves
Engineering
design
Manufacturing
Analytical technology
such as FEM
World’s highest technologies
for manufacturing
Delivery
Evaluation/
improvement
Utilization of various
testers to reproduce the
service conditions
33
Customers’
Customers’
needs
In service
Monitoring the service
conditions jointly with
customers
Engineering Capability
Our advanced stress analysis technologies
contribute to product design.
Engineering design
Analytical technology
such as FEM
Evaluation/improvement
Utilization of various testers
to reproduce the service
conditions
Manufacturing
World’
World’s highest technologies
for manufacturing
In Service
Monitoring the service
conditions jointly with
customers
1. Our development of stress analysis techniques for designing the Shinkansen parts was an
origin of our milestone.
2. Subsequent further advanced developments have been applied to various analyses such as
steel solidification, heat-treatment transformation and residual stress.
Example of application to heat-treatment analysis on crankshaft
Max stress reduced by 35 %
Development of our proprietary
software for hardening analysis
Proposal of optimum shape and
adoption for mass-production
Before change
34
After change
World’s Highest Strength in Manufacturing
Engineering design
Manufacturing
Analytical technology
such as FEM
World’
World’s highest technologies
for manufacturing
Source of our strengths in
manufacturing
Evaluation/improvement
Utilization of various testers
to reproduce the service
conditions
1. All-round production from steel making, forging, heattreatment, finishing and further to dies/molds to be used
Meet various needs from customers and achieve the shortest
delivery time
2. Application of Converter-CC materials
Higher yield and cleanliness
3. Development of ingenious forging facilities
Higher yield and productivity
35
In Service
Monitoring the service
conditions jointly with
customers
Ingenious Forging Facilities
Engineering design
Analytical technology
such as FEM
SIRD press for forming the
wheels
(World’s only facility)
Manufacturing
World’
World’s highest technologies
for manufacturing
Evaluation/improvement
In Service
Utilization of various testers
to reproduce the service
conditions
Monitoring the service
conditions jointly with
customers
5,000-ton full automatic high-speed crankshaft
forging line
Principle of SIRD
Rotary forging
• Excellent forging
capacity with a
smaller force
• Closed die
forging
36
Yield increase
by 7 %
Production efficiency: 450 P/H
ManMan-power: 2 operators (only for monitoring and
diedie-change)
Evaluation / Improvement:
Testing Facilities
Engineering design
Analytical technology
such as FEM
Evaluation/improvement
Utilization of various testers
to reproduce the service
conditions
High-speed bogie testing stand
Brake tester for Shinkansen
37
Fatigue tester for
the actual size
wheels
Engine tester
Manufacturing
World’
World’s highest technologies
for manufacturing
In Service
Monitoring the service
conditions jointly with
customers
Prototype Evaluation Cycle in Development of New Products
Capability of rotating the development cycle by ourselves
Engineering
design
Analytical technology
such as FEM
Evaluation/
improvement
Utilization of various
testers to reproduce the
service conditions
38
Manufacturing
World’s highest technologies
for manufacturing
In service
Steering Bogie Truck
Traveling on straight track
Direction of travel
Traveling on curved track
Direction of travel
Regular
bogie truck
Difference in direction between the track and
the wheel travel
Steering
bogie truck
Same direction between the track and the
wheel travel
Direction of
track
Direction of wheel travel
Link mechanism
39
• Resistance to
derailment
• Lower noise
• Lower wheel
abrasion
Large-Scale Testing Facility: Small Radius Test Track
• Construction of the small
radius test track in our shop
• Three rail track for testing on
both narrow and standard
gages
A truck for trailing
• Effective tool for developing
the special bogie for a snaked
line
Test bogie truck
Curved track
Total length:
Approx.200m
40
41