Showa could review acquisition offers for UK arm - spokesperson

24 January 2020 - 04:53 pm UTC

by Ryuya Shiga in Tokyo

Showa, a Saitama, Japan-based automotive components maker, could evaluate acquisition offers for its wholly owned UK-based unit Showa UK Limited if approached by interested buyers, the company’s spokesperson said.

 

The company, which has a market cap of JPY 173.4bn (USD 1.5bn), announced last month it has started consulting with employees regarding the future of its UK operations due to the planned closure of Honda’s UK-based plant in 2021. Honda is Showa UK’s sole customer, and it would be challenging for Showa to maintain its UK operations after the closure, it said.

 

Showa is currently exploring all possible options to determine whether or how it could continue the UK business, the spokesperson said. It is not actively pursuing the sale of the subsidiary at this stage but could consider such offers, he added.

 

Showa UK has around 100 employees and is engaged in the final set-up of shock absorbers and electric power steering, which are produced in Japan, exported to the UK and supplied to Honda, according to the spokesperson.

 

Showa UK was established in September 1995, according to the company’s financial statement.

 

The company does not disclose any financials regarding Showa UK.

 

Honda UK’s other suppliers

 

Honda announced in February 2019 it will shut down the Swindon, UK-based vehicle manufacturing subsidiary Honda of The UK Manufacturing in 2021. The plant currently produces 150,000 cars per year, and has about 3,500 employees, as per a press release. The car maker also said it would also cease manufacturing in Turkey the same year.

 

Honda’s suppliers in response have started reviewing their businesses in Europe.

 

Saitama-based automotive seat maker TS Tech also announced last month its British unit TS Tech UK has started discussions with employees to determine the direction of the company following Honda UK’s planned closure.

 

TS Tech UK has around 400 employees and manufactures automotive seats and supplies for Honda, according to a spokesperson for TS TECH. Honda is currently the seat maker’s sole customer, and is now exploring other potential clients to supply products, she said.

 

TS Tech is reviewing various options, including shut-down of the UK business, as announced. The spokesperson declined to comment if a potential sale could be among those options.

 

TS Tech didn’t disclose financials for the UK operation but sales from the unit is limited, less than 1% of the company’s consolidated sales, according to her.

 

Yutaka Giken, a Hamamatsu, Japan-based producer of torque converters and exhaust systems, announced on 7 January it has decided to close down its Oxford-based manufacturing subsidiary UYS in FY21. UYS is engaged in manufacturing catalytic converters and silencers, as per its website.

 

Tokyo-based engine management systems developer Keihin said last August it would shut down its Glasgow-based distribution subsidiary Keihin Europe in December 2021, in light of Honda’s closure of plants in UK and Turkey.

 

Unipres, the Yokohama, Japan-based manufacturer of automotive body parts, also said it will cease operations at one of its two UK-based plants, according to a Nikkei report in May 2019.

 

Kobe-based automotive hose maker Nichirin has also decided to suspend its operation in Nichirin UK, the Manchester-based manufacturing base in June 2020, according to a company’s press release.