Omron Gets Large Contracts with Ford and GM

10/15/96

Comline has reported that Japanese automotive electronics supplier Omron has gotten large orders from both General Motors and Ford. Omron will supply both carmakers with power seat switches at the rate of about 1.2 - 1.3 million units annually, starting in 1998.

Until now, Detroit's Big Three automakers acquired most off their electronic parts from domestic electronic parts makers. This transaction marks the first time any of the big three have sought power seat switches internationally. Omron will produce and supply the switches to both companies through Dualtech Automotive Electronics, in Canada. GM's truck and bus division will buy the parts, while all of Ford's divisions will buy them.

Omron's new contracts start during the second half of 1998. They are expected to triple the amount of trade the Japanese auto parts industry has with North America: Japan's auto parts sales in North America have been stalled at the 1995 rate of 4.5 billion yen, but these contracts will expand that market to over 10 billion yen in 1998 and to 14-15 billion yen by the year 2001.

Omron currently supplies its Electronic Control Units only to Japanese automakers, but these new contracts will make it the world's largest ECU supplier. Omron began selling electronic parts in the auto market in the 1980s, but saw its income in Japan shrink from 23.4 billion yen in 1993 to 18 billion yen in 1996. The company sought international trade as a way to supplement weakening domestic demand.

Paul Dever -- The Auto Channel