Variable Market

Japan's leading maker of continuously variable transmissions is gearing up for a big increase in sales over the next five years.

Jatco Ltd., a Nissan Motor Co. Ltd. affiliated supplier, predicts domestic demand for CVTs will grow to 2 million to 3 million units by fiscal 2007, up from an estimated 600,000 in the fiscal year ended March 2002, and will account for more than one-third of new vehicles sold in the market.

The company expects a jump in demand overseas as well, initially in the U.S. and later in China. It plans to begin CVT production in Aguascalientes, Mexico, in mid-2005. Located near Nissan's Aguascalientes plant, Jatco Mexico S.A. de C.V. reportedly will produce 300,000 steel-belted units annually.

Jatco attributes the growth to an expanded product lineup (including belt-type CVTs with 258 lb. ft. [350 Nm] of torque capacity) and lower manufacturing costs. Its 258-lb.-ft. CVT appears on Nissan's 3.5L Tiano sold in Japan and Murano sold in the U.S.

Through a series of tie-ups, including the July 2002 takeover of Mitsubishi Motors Corp.'s transmission unit, Jatco has broadened its customer base to include Mitsubishi and Hyundai Motor Co. Ltd.

In 2006, Jatco will supply CVTs for Fuji Heavy Industries Ltd. (Subaru), the first Japanese OEM to market CVTs a decade ago.

Last year, Jatco and Fuji started a 50-50 joint venture, Fuji AT Ltd., to produce CVTs for small cars, including 0.66L minis. Planned output in the first year is 120,000 units. Production will take place at Fuji's Oizuma plant in Gumma prefecture.

Toyota Motor Corp. affiliate Aisin AW Co. Ltd. began producing 110-lb.-ft. (150-Nm) CVTs at its Okazaki plant in fall 2002. A latecomer to the market, Toyota offers nine models with CVTs, including the Vitz, Sienta and hybrid Prius.

Mazda Motor Corp. plans to introduce a CVT in the next two years. Suzuki Motor Corp., Japan's largest minicar maker, phased out its CVT offerings in 2001.

In the last fiscal year, Jatco estimates Honda Motor Co. Ltd. sold more than 335,000 cars with CVTs, followed by Nissan at 130,000 (half of which were built at Nissan Motor Mfg. [U.K.] Ltd.), Mitsubishi at 100,000, and Fuji at 60,000.

Nissan, market leader in fiscal 2001, registered an estimated 30% decline due mainly to management's decision to discontinue the CVT version of the March and U.K.-built Micra.