Denso Wants To Grow Hybrid Electronics Business Beyond Toyota

Denso Wants To Grow Hybrid Electronics Business Beyond Toyota

By John O'Dell November 3, 2009

No. 2 Global Auto Parts Supplier Also Sees Future in Lithium-ion Battery Manufacturing

Japanese auto parts giant Denso Cop. says it sees a hybrid wave coming and intends to catch a long and profitable ride.

The company, the world's No. 2 parts supplier, now counts Toyota Motor Corp. - Denso's major shareholder - as its principal hybrid systems customer. It wants to standardize its hybrid battery and engine control units, power inverters and compressors so they can be sold to other automakers as well.

Denso also might start making lithium-ion batteries to keep pace with rival Robert Bosch. The German auto parts  company - the worlds largest - has a battery-building partnership with Samsung that is expected to start producing lithium-ion batteries for BMW in 2011.

Denso has been developing lithium battery technology since 1995, mainly for consumer electronics such as cell phones but also builds some for automotive use for in-house testing of its its hybrid control components.

Denso President Nobuaki Katoh told an Automotive News interviewer that he sees battery making as a crucial segment going ahead.

"Battery technology is one of the most important technologies for the rise of hybrid and electric vehicles,"  he said.  "They are such an important component that if we could manufacture them on our own, that would be great. But it's not so simple."

Denso expects hybrids to account for 15 percent of the world's auto market by 2020, up from less than 1 percent now.

By expading its hybrid control systems customer base beyond Toyota, Denso could begin realizing greater economies of scale that could reduce parts costs and, ultimately, help automakers cut the cost of the so-called technology premium that makes hybrids pricier than their conventionally powered counterparts.

John O'Dell:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.