Market and product

Sanyo Electric Co. has announced plans to boost the production capacity for lithium-ion batteries at its newly built plant in Kasai, Hyogo Prefecture, tenfold by 2015.

The plant, which began operations in July, is on track to achieve its initial production target of 1 million lithium-ion battery units per month during the fiscal year ending March 2011, the company said Monday.

The production capacity will be raised to 10 million per month in 2015, according to Sanyo, a major affiliate of Panasonic Corp.

Indications are that the already intense competition between Japanese and South Korean lithium-ion battery manufacturers is becoming even more fierce as new investments and business tie-ups emerge, analysts said.

Hitachi, Ltd. announced the same day it will form a partnership with Johnson Controls, a leading auto parts manufacturer in the United States, to market lithium-ion batteries and other cutting-edge energy-storage technologies.

Lithium-ion batteries are indispensable for the production of personal computers, cellular phones, electric cars and gas-electric hybrids.

Producing 1 million units per month, Sanyo's Kasai plant has 10 times the operating capacity of the firm's plant in Tokushima, which until the Kasai facility's July opening was Sanyo's largest production base, company sources said.

The projected increase to 10 million units per month will be implemented in stages, they said.

The Osaka-based Panasonic group has the biggest share of the global lithium-ion battery market, with 27 percent.

However, South Korean makers such as Samsung SDI Co. and LG Chem are poised to overtake Panasonic, having already surpassed Sony Corp.

The Panasonic group, for its part, is likely to continue large-scale capital investment as it attempts to stave off the challenges of the South Korean rivals, which are on the offensive due to the weakness of the won, according to analysts.

At a press conference Monday at the Kasai plant, Sanyo President Seiichiro Sano said, "Although competition is certain to get tougher, we'll deal with it by making a priority of enhancing our products' value-added properties, such as their quality and reliability."

The tie-up between Hitachi and Johnson Controls, meanwhile, involves an agreement to jointly market lithium-ion batteries for use in automobiles and to consider building plants in the United States, Europe and Asia.

The two firms are considering joint research and development programs into next-generation batteries, with a view to alleviating their future capital investment costs, according to the analysts.

Hitachi was a late starter in terms of supplying lithium-ion batteries to overseas carmakers, and hopes to make up lost ground through the tie-up with Johnson, which has strong sales networks in the United States, the analysts said.