Transmission Maker Aisin AI Shifts Into High Gear

TOKYO – It is one of the auto industry’s best-kept secrets.

Virtually unknown outside the industry, Aisin AI is Japan's leading manufacturer of manual transmissions. Its main customer is Toyota, whose affiliated suppliers include Aisin Seiki, parent company of the transmission maker.

The Toyota 86, Subaru BRZ and Lexus LFA, among the sportiest of sporty cars in Japan, all feature transmissions made by Aisin AI.

In addition to Toyota, the company supplies Mazda and Mitsubishi in Japan and PSA Peugeot Citroen, General Motors and Lotus overseas. The supplier also is working with Porsche to develop a new 6-speed transmission for the 911 sports coupe.

Aisin projects fiscal-2013 transmission sales of ¥131.3 billion ($1.3 billion), marginally down from prior year.

The supplier is forecasting output of 1.56 million units, also down slightly from the previous year’s levels and well below the fiscal-2007 peak of 2.2 million.

Aisin produces 21 transmission series. All but three are 5- and 6-speed manuals, both front- and rear-drive. The others are automated manuals.

The supplier’s most popular transmission is the 5-speed AR5 developed for fullsize SUVs and pickups, including the Toyota Land Cruiser and Mitsubishi Triton. A close second is the BC25, another 5-speed gearbox, built for the Toyota Corolla series, Vitz, Yaris and Brazil-made Etios, followed by the 6-speed BG6.

Aisin has production facilities in Japan, China and Thailand, while holding equity in Toyota’s main European transmission plant in Walbrzych, Poland.

Management is exploring opportunities elsewhere including India, one of the world’s largest manual-transmission markets.

“We’ve made no decisions (about India),” Aisin President Kazumichi Sugiura says in a recent interview. “Frankly, we don’t have products to compete,” he adds, suggesting Aisin transmissions are a bit pricy for many emerging markets.

An added obstacle to setting up production in India is that Toyota already manufactures manual transmissions at a subsidiary plant in a suburb of Bangalore, where the automaker operates two vehicle factories.

In January 2013, Toyota Kirloskar Auto Parts opened a 5-speed manual transmission plant with yearly capacity of 240,000 units. The $81 million facility, which also produces engines, was built mainly to supply the Etios.

Sugiura says that before proceeding with production in India, the supplier would have to lower unit costs through, among other things, building a local supply base, which currently is not feasible.

Meanwhile in China, Sugiura sees growth potential in the below-1.6L vehicle segment. The supplier produces both front- and rear-drive transmissions at an 18-year-old plant in Tangshan, Hebei province. Toyota’s RAV4 is among the vehicles equipped with the gearboxes.

Concerning technology, Aisin is focusing on improving active shift feeling, while reducing noise and size. Sugiura believes a 5% size reduction is possible.

Aisin also is studying the feasibility of developing a manual-based automatic transmission for the European market as a means offering the reliability of manuals with the convenience of automatics.

Toyota introduced such a system, called multimode transmission, on the Toyota Aygo and Peugeot 107 in 2005. The automaker produces the transmission at the Polish plant.

Another management initiative is to work more closely with group companies to develop synergies in drivetrain and powertrain development. Sugiura says collaborations mainly involve sharing information between, for instance, Aisin Seiki, which produces clutches for both manual and automatic transmissions.

Aisin Seiki’s automatic-transmission subsidiary, Aisin AW, projects fiscal-2013 production of 6.2 million units, up 9% over the previous year. Of the fiscal-2012 total, an estimated 10% were hybrid transmissions and CVTs.

Based in Anjo, Aichi prefecture, Aisin AW anticipates fiscal-2013 sales and earnings of ¥1.05 trillion ($10.2 billion) and ¥65 billion ($633 million), up 7.8% and 0.6%, respectively.