Japanese investor sizes up Midlands

A Japanese vehicle transmissions company was this week evaluating potential West Midlands suppliers for what could be a multi-million pound investment in the region. Jatco, based in Fuji City, Japan, exports automatic transmissions to Rover and Volkswagen. It is considering opening a European assembly plant within the next two years, creating 100 jobs. Nearly 30 […]

A Japanese vehicle transmissions company was this week evaluating potential West Midlands suppliers for what could be a multi-million pound investment in the region.

Jatco, based in Fuji City, Japan, exports automatic transmissions to Rover and Volkswagen. It is considering opening a European assembly plant within the next two years, creating 100 jobs.

Nearly 30 local companies involved in casting, machining and pressings were interviewed by purchasing executives from Jatco during last week’s Manufacturing Week trade show in Birmingham. The meetings were organised by the West Midlands Development Agency’s Regional Supply Office.

Earlier this week, Jatco representatives visited ten firms that had been shortlisted in the area.

‘We are looking at quality systems, defects ratios and prices,’ said purchasing general manager Kazuo Ohashi.

Ohashi said UK suppliers were generally smaller than their Japanese counterparts and their prices were higher. ‘Their labour productivity is not as high as in Japan,’ he said. ‘But the quality levels are the same.’

Jatco is also understood to be considering locations in mainland Europe. ‘But in terms of labour costs and management the UK is strong,’ he said.

Ohashi expressed misgivings about the UK’s stance on the euro, saying that it was making it ‘very difficult’ to decide to site a plant in the UK. ‘But if we can enjoy lower costs, it is still a possibility,’ he added.

A final decision on inward investment in the UK will also depend on continued growth of the automatic transmission market, and is not expected to be made for at least another 12 months.

Jatco’s plan is to assemble a minimum of 20,000 units a month in Europe. Machining facilities would be added to the plant later.