Unlocking Market Potential in an Evolving Automotive Landscape

Antonio López Arce, CEO, Gestamp Asia
Takeshi Narui, Senior Project Manager, Gestamp Hotstamping Japan

March 2024

Gestamp, a Spain based multinational company is known worldwide for its innovative design, development and manufacture of highly engineered metal automotive components for leading vehicle manufacturers. By specializing in components that contribute to lighter, safer vehicles with improved energy efficiency and reduced environmental impact, Gestamp plays a crucial role in advancing automotive technology.

This expertise led them to expand into the Japanese market, a strategic move in their global journey. We sat down with Antonio López Arce, CEO of Gestamp Asia, to discuss this significant expansion, exploring their approach, technological innovations and immersion in Japan's manufacturing culture. In addition to López Arce's strategic insights, we also engaged with Takeshi Narui, Deputy Plant Manager at the Matsusaka facility in Mie Prefecture located near Osaka, who provided a detailed perspective on their operational success in the eco-car sector. These conversations offer valuable lessons for any company looking to navigate the complexities of entering the Japanese market, highlighting the importance of adaptability and innovation in meeting the unique demands of Japan's automotive industry.

Japan's stature in the global automotive market is both influential and highly respected, underscored by its position as one of the largest automobile producers in the world. With a production of 8.57 million vehicles in 2023 and home to iconic brands like Toyota and Honda, Japan is recognized as a trendsetter in the industry. This respect and recognition are crucial in understanding Japan's appeal to global investors and companies like Gestamp. CEO of Gestamp Asia Antonio López Arce further elaborates, "Japan's focus on technology and innovation makes it a benchmark for industries and attracts international investment, particularly in the automotive sector."

Gestamp's decision to venture into the Japanese market was driven by the need to align closely with key Original Equipment Manufacturers (OEMs) in the country. The establishment of an R&D center in Tokyo in 2017 followed by the opening of a manufacturing plant in Mie in 2018 was testament to Gestamp's deep commitment to the Japanese market. But Gestamp's ties with Japan go back further: "This endeavor began in 2009, with Gestamp deploying engineers to work closely with our OEMs, contributing to design and developing various solutions," López Arce states.

This strategic presence in Japan is not just about local manufacturing; it's about leveraging Gestamp's global footprint, which spans 24 countries and over 110 locations, to collaborate with Japanese OEMs both locally and globally. "Being in Japan allows us to foster closer relationships with our clients, understand their needs more deeply, and respond promptly," he adds.

Gestamp's experience in Japan goes beyond just technological advancements; it represents a journey of both learning from and contributing to Japan's famed monozukuri (craftsmanship in pursuit of perfection) culture. López Arce emphasizes, "Japan, with its extensive history in lean manufacturing and system development, has been a key reference point for us."

This deep engagement with Japan's manufacturing ethos is further enriched by Gestamp's 15-year partnership with Mitsui & Co., Ltd., a major trading company in Japan. This collaboration has been pivotal, enabling Gestamp not only to align with Japanese OEMs but also to explore new avenues across the supply chain. López Arce elaborates on this relationship, noting, "Our partnership with Mitsui has broadened our scope, enhancing our cooperation beyond OEMs to work closely with steel suppliers and develop new materials that meet evolving industry standards."

Furthermore, Gestamp's immersion in Japan's manufacturing culture has led to the incorporation of global best practices, blending traditional manufacturing methods with modern technologies. "We've embraced digitalization and Industry 4.0, introducing virtual factories that draw from Japan's long-established principles, allowing for predictive maintenance and manufacturing processes," López Arce adds.

Gestamp's future in Japan is shaped by a commitment to innovation and sustainability in the evolving automotive industry. López Arce highlights the company's adaptive approach: "Currently, the spotlight is on electric vehicles, but they are not the only path forward. Our clients, notably Japanese OEMs, are exploring sustainable alternatives, including hydrogen, among other technologies”.

Looking ahead, Gestamp's vision in Japan involves actively supporting the evolving needs of their clients, ensuring they remain at the forefront of the automotive industry. "Japan remains a significant market for us. We aim to support our customers both here and globally, constantly seeking new opportunities to apply our expertise," López Arce says.

The plant in Matsusaka, Mie, is Gestamp's flagship manufacturing site in Japan. The plant manufactures and supplies high-tensile steel hot-stamped body frame parts and other products to automakers in Japan. According to deputy plant manager Takeshi Narui, Gestamp's technology definitively meets the needs of Japanese automakers: "There is clearly a major trend in Japan toward the conversion to eco-cars such as hybrids, plug-in hybrid electric vehicles (PHEVs) and electric vehicles (EVs). However, EVs are heavier than other types of cars, weighing 250 to 300 kilograms more. "

Narui emphasizes an ever-increasing need to build cars that are "robust, lightweight and safe for drivers at an affordable price." Gestamp's hot stamping technology, he explains, "permits the design, development and manufacture of safer and lighter parts, in line with the needs of these automakers."

There were several reasons for selecting Matsusaka City, located in central Japan between Nagoya and Osaka, as the site for Gestamp's plant. Narui sheds light on the strategic decision-making process: "When we were thinking about establishing a plant in Japan, we had a number of potential locations in mind. Matsusaka City in Mie, offers good access to the bases of key Japanese automobile manufacturers."

The local government's support in Matsusaka City emerged as a critical element of Gestamp's successful expansion in the region. Narui notes, "The biggest success that derived from building the plant in this location was that we received many orders from customers in the Nagoya area." He further elaborates on the logistical advantages, "Our geographical location also gives us the advantage of being able to deliver to Kyushu1 and Kanto2, so in that sense Matsusaka is a well-balanced base." Beyond logistics, the plant plays a pivotal role in the company's operations: "As Gestamp's flagship plant in Japan, it is very important as a communication hub for our business." This role leverages the global prominence of Japanese cars, opening significant business opportunities by connecting with users and stakeholders worldwide.

In addition to its accessibility, it also stood out due to the local government's eagerness to attract foreign investment: "They provided subsidies and other support, while cooperating in diverse ways on issues such as securing local human resources. I think that we created a win-win relationship along with the local government in terms of creating jobs in the area."

The R&D center in Yaesu, Tokyo, plays a critical role in building relationships with customers and co-developing products. Narui speaks to the center's mission: "The R&D center in Yaesu is in charge of development of vehicle designs and the proposal phase." This facility enables Gestamp to work closely with automakers to develop vehicles that balance strength with lightness. "We are already engaged in a number of collaborative development projects with our customers in Japan, involving dispatching our engineers to automotive manufacturers," Narui shares, highlighting the successful integration of Gestamp's global expertise with the specific needs of the Japanese market. He concludes, "There is a common misconception that one must overcome various linguistic and cultural challenges when one works with Japanese companies, but once mutual trust has been established, it is clear that the process of working with Japanese manufacturers is very smooth."