Furukawa Electric to quadruple lightweight wire harness output in Vietnam
HO CHI MINH CITY, NNA - Furukawa Electric Co. plans to quadruple its production capacity of lightweight aluminum wire harness in Vietnam in about three years to meet rapidly growing global demand for the auto part that supports fuel efficiency.
Furukawa Automotive Systems Inc. will spend 3.5 billion yen ($32 million) to build a two-storied assembly plant with a total floor space of 28,000 square meters, in the Tan Thuan Export Processing Zone in Ho Chi Minh City, the Japanese company said in a statement Monday.
The new plant is scheduled to start operations in September 2020 and will be operated by Furukawa Automotive Parts（Vietnam）Inc.
Furukawa also plans to shift the production of aluminum wire harness from its existing plant in Vietnam to the new one in order to boost efficiency, with the aim of quadrupling its total production capacity of the key auto part in Vietnam by December 2021.
Wiring harness is designed to connect various devices mounted on automobiles and to deliver electricity and signals throughout the automotive system.
Furukawa Automotive System aims to increase the production share of its lightweight aluminum wire harness to 30 to 40 percent of its total wire harness output sometime after 2021, up from the current 10 percent.
The demand for the auto part is rapidly growing, thanks to the global shift toward more fuel-efficient and less polluting vehicles.
The latest move by Furukawa is part of its growth strategy for its automotive parts business.
The Furukawa Electric group has allocated some 10 billion yen for an eight-year period ending in March 2026 to invest in boosting its wire harness output in the Philippines and Vietnam, which in turn should enhance its capacity to meet strong demand for the product from carmakers that have factories in North America.
The group plans to increase global sales of its automotive parts segment, which includes Furukawa Automotive Systems, to around 260 billion yen in fiscal 2020 from 250 billion yen forecast for the current fiscal year ending in March.