As the global transition to electric vehicles (EVs) rattles the industry's supply chain, the US private equity firm, Carlyle Group Inc., plans to increase its presence in the Japanese automotive industry. Auto parts suppliers in Japan are reconsidering methods that were previously designed for combustion-engine cars as the world transitions to EVs. The market volume of electric cars in Japan increased in 2022 over that in the previous years, according to GlobalData.
A centuries-old holding company system – a hierarchical structure of equity-interlocked providers with automakers on top and ensuring business security – used to be a source of strength for the Japanese auto industry. However, the switch to EVs, which need fewer parts but other knowledge, including software engineering, would probably change Japan's main industry. It would not be possible for automakers to sustain all keiretsu businesses in the future.
In November 2022, Carlyle announced a JPY38 billion ($270.75 million) tender bid for Totoku Electric Co Ltd, a manufacturer of electric wires that also produces cabling for seat heaters for automobiles. Carlyle Group Inc could support portfolio firms in their international expansion by assisting them in global talent acquisition, automation, sourcing, and compliance.
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