As part of its four-year effort to invest nearly $1 billion in North America by 2017, global automotive supplier DENSO announced plans to spend $400 million to expand its electronics manufacturing capabilities and build a new warehouse at its DENSO Manufacturing Tennessee (DMTN) manufacturing facility in Maryville. The expansion is expected to add 500 new hires.
The new 186,528-square-foot warehouse will allow DMTN to consolidate its warehouse operations in the Maryville area into one location on its campus, and the additional manufacturing space will be used to manufacture products such as head-up displays, meters and electronic control units. The warehouse is expected to be completed by October 2017.
In addition to better supporting its North American customers, the expansions are fueled in part by increased car production in North America. DENSO reported revenue of $2.3 billion for the first quarter, ending June 30, 2015, in North America, a 26.3 percent increase from the previous year. The significant growth is thanks to increased car production supported by steady economic growth, said DENSO.
The U.S. automobile manufacturing industry has recovered in the five years since the recession due to increased consumer confidence and low interest rates, according to a recent IBISWorld report “Over the five years to 2020, the strengthening economic conditions and returning consumer confidence will continue to fuel the industry. Automakers will also seek growth potential in the hybrid and fuel-efficient car market, as they focus on developing gas-electric hybrid vehicles to increase fuel efficiency and cut exhaust emissions."
Earlier this year, DENSO also announced a $53.6 million investment at its DENSO Manufacturing Michigan, Inc. (DMMI) facility in Battle Creek, Michigan, adding 100 new jobs. The investment enabled the company to develop new manufacturing lines for advanced thermal systems, add additional labs for new product testing and validation, and expand logistics and packaging operations.
As part of the investment, DENSO purchased two buildings in the Fort Custer Industrial Park, increasing DMMI’s footprint to more than 1.3 million square feet of space for manufacturing, warehousing, product testing, and other support functions. One building will be used for warehousing parts and packaging, as well as shipping and receiving for some customers. The other building will support new product testing, engineering process changes and other product reliability testing for its Battle Creek, Arkansas, Canada and Mexico thermal plant locations.
In addition, late last year, DENSO spent about $6.7 million to open a 165,000 square-foot warehouse in DENSO’s new location, DENSO Logistics Nashville Tennessee (DLNT) to meet increasing sales in North America, and invested about $1.6 million to expand its DENSO Logistics Michigan (DLMI) warehouse, located in Belleville, Michigan.