Omron Makes Gains in North America

While many automotive suppliers are crying the blues and cutting back production and head counts, at least one relative newcomer to the North American market has yet to see any softening in demand.

On the contrary, Omron Automotive Electronics Inc. (OAE), the North American unit of Japan's $5.7-billion Omron Corp., actually has seen a spurt in bookings that indicates major growth lies ahead.

Established in 1985, OAE recorded $160 million in North American sales in fiscal 2000 ended March 31 last year and $210 million in fiscal 2001, says G.W. (Jerry) Bricker, vice president and general sales manager. He expects to reach $300 million two years hence. “We should be able to triple our sales between 1998 and 2003,” he tells WAW.

If that happens, North America will pass Japan as Omron's largest automotive electronics market, he says. In fiscal 2000 Omron's global revenues were $400 million.

OAE in August moved to a new 12,000-sq.-ft. (1,100-sq.-m) North American headquarters facility in Novi, MI, to get closer to its customers. Employing 750, it has a plant in St. Charles, IL, and two in Canada that manufacture a wide range of sensors, relays and switches for remote keyless entry devices, power window and sliding-door anti-pinch devices and numerous other electronic control units.

It also is working with another supplier on a tire sensor that alerts drivers when tires are under-inflated, a technology spurred by the Ford/Firestone controversy.

In Japan, and likely soon in North America, Omron has developed an adaptive cruise control device (currently on the Infiniti Q45 sold there) and is working on ground-condition warning and radar braking devices for future models.

One reason for OAE's bullish outlook, says Mr. Bricker, is the average 7% annual growth in automotive electronics even though global vehicle sales are rising at only 3% per year. So far this year, he says, automotive electronics revenues are running 10% ahead of 2000, he says.

OAE reports to the automotive division of Omron's Electronics Components Co. (OEC) headed by President Hisao Sukata.

Asked how OAE has gotten off to a relatively fast start in North America, he credits its independence from Japan's traditional keiretsu system, where auto-makers control many of their suppliers, as the main reason.

“They (keiretsus) are like elephants, and we are just a rabbit,” he says, “but a rabbit can move quickly to satisfy customers.”