Nippon Sharyo

Basic Information

Stock Code
7102
Industry
Transportation Equipment
Category Detail
Transportation Equipment
Prefecture
Aichi Prefecture
Establishment Year
September 1896
Listing Year
May 1949
Official Website
https://www.n-sharyo.co.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
Toyo Denki Manufacturing, Morio Electric, Kinki Sharyo, Nanshin

Overview

Nippon Sharyo is a major transportation equipment manufacturer centered on railway vehicle production since its founding in 1896. As a subsidiary of JR Central, it boasts high technological capabilities both domestically and internationally.

Current Situation

In the fiscal year ended March 2020, it achieved consolidated sales of approximately 94.6 billion yen and operating profit of approximately 8.5 billion yen. In the railway vehicle sector, it supplies high-performance vehicles to domestic JR companies and private railways, with abundant experience in manufacturing Shinkansen and linear motor cars, earning high praise. In recent years, it has pursued diversification into construction machinery and environmental businesses, but infrastructure-related sales are on a declining trend due to reductions in public works spending. It is also focusing on overseas market development, continuing to expand sales in Southeast Asia even after closing its U.S. factory in 2018. Through capital alliances with JR Central, it has strengthened technological collaboration and is involved in linear motor car development. Moving forward, key challenges include bolstering production systems amid growing order backlogs and developing environmentally responsive products, with the aim of achieving sustainable growth.

Trivia

Interesting Facts

  • Cumulative railway vehicle production exceeds 3,000 units, top class in Japan
  • First company in Japan involved in linear motor car manufacturing
  • Significantly reduced vehicle body manufacturing costs with proprietary block method
  • Has received numerous Blue Ribbon Awards from the Railway Friends Association
  • Tokyo's Warabi plant had facilities suitable for Type A transportation since pre-war
  • U.S. subsidiary's Rochelle plant closed in 2018
  • Past business suspension due to public works bid rigging
  • Provides technology for large bridge construction in addition to railway vehicles
  • Became a subsidiary of Central Japan Railway Company (JR Central) in 2008
  • Once opened a vehicle exhibition shop called Nippon Sharyo Dream Workshop in Nagoya

Hidden Connections

  • Deep technological collaboration with JR Central on linear development
  • Developed standard body designs for many local private railways, shaping industry standards
  • Construction machinery foundational technology derived from steam locomotive boiler manufacturing
  • Expanding involvement in linear projects and railway vehicle development overseas
  • Owns dedicated sidings specialized for Type A transportation of railway vehicles
  • Joint manufacturing of railway wheel stops with Kayaba Industry
  • Many JR conventional line commuter trains based on Nippon Sharyo block method
  • Aggressive expansion plans into Southeast Asia even after U.S. withdrawal

Future Outlook

Growth Drivers

  • Increasing demand for superconducting Chuo Shinkansen linear motor car vehicles
  • Expansion of vehicle replacement and new manufacturing demand from domestic JR and local private railways
  • Growth in overseas railway markets centered on Southeast Asia
  • Rising demand for environmentally friendly construction machinery and infrastructure products
  • Enhanced competitiveness through high-safety and energy-efficient vehicle development
  • Improved production efficiency via digital technology utilization
  • Long-term orders expected from aging public transportation infrastructure countermeasures
  • New market creation in diversified environmental business fields
  • Deepening linear and Shinkansen technology development through cooperation with JR Central
  • Brand strengthening through disaster recovery support and social contribution activities
  • Improved corporate image through strengthened sustainability efforts
  • Provision of vehicles compliant with international safety standards

Strategic Goals

  • Expand into world markets with linear motor car-related technologies
  • Increase overseas railway vehicle production ratio to over 20%
  • Full lineup of energy-saving vehicles compliant with environmental regulations
  • Market share expansion through electrification and efficiency improvements in construction machinery
  • Promotion of supply chain digitalization and cost reduction
  • Strengthen collaboration with local communities to advance sustainable corporate activities
  • Revenue diversification through new business development domestically and internationally
  • Achieve fully digital design system for vehicle manufacturing
  • Achieve 40% CO2 emission reduction by 2030
  • Enhance technology succession among employees and diverse talent utilization

Business Segments

Railway Vehicle Manufacturing

Overview
Main business division handling vehicle manufacturing for JR companies and private railways, as well as overseas market development.
Competitiveness
High-quality Shinkansen vehicle technology and environmental responsiveness
Customers
  • JR Central
  • JR West
  • Nagoya Railroad
  • Keisei Electric Railway
  • Odakyu Electric Railway
  • Various local private railways
  • Overseas railway operators
Products
  • Shinkansen vehicles
  • Conventional line commuter trains
  • Limited express vehicles
  • Diesel multiple units
  • Railway vehicle parts
  • Vehicle modifications and overhauls

Construction Machinery Manufacturing

Overview
Manufacturing and sales of foundation work machinery for civil engineering and construction sites.
Competitiveness
High durability and versatility
Customers
  • Construction companies
  • Civil engineering contractors
  • Infrastructure companies
  • Local governments
Products
  • Pile drivers
  • Crawler cranes
  • Excavators
  • Ground improvement machines

Transportation Equipment Manufacturing

Overview
Design and manufacturing of large transport equipment and containers for various industries.
Competitiveness
Large structure manufacturing technology and compliance with safety standards
Customers
  • Logistics companies
  • Air cargo operators
  • Chemical and petroleum manufacturers
Products
  • Large transport carriers
  • High-pressure gas tank lorries
  • ULD containers for aviation

Bridge and Infrastructure Structure Construction

Overview
Handles design, construction, and maintenance management of large bridges.
Competitiveness
Abundant experience in constructing large civil structures
Customers
  • Railway operators
  • Construction consultants
  • Ministry of Land, Infrastructure, Transport and Tourism
  • Local governments
Products
  • Railway bridges
  • Road bridges
  • Connecting bridges
  • Bridge repair works

Agricultural Facility Equipment Business

Overview
Design and manufacturing of storage and processing facility equipment for agriculture.
Competitiveness
Specialized technology and know-how in agricultural machinery
Customers
  • Agricultural cooperatives
  • Agricultural facility operators
  • Primary industry-related companies
Products
  • Country elevator equipment
  • Rice center equipment
  • Seed center equipment

Competitive Advantage

Strengths

  • High technological capabilities in Shinkansen vehicles and linear motor car development
  • Strong capital and business alliance with JR Central
  • Abundant track record and brand power in domestic railway vehicles
  • Risk diversification through multi-faceted business expansion
  • Production system centered on the Toyokawa plant
  • Track record in domestic and international railway markets
  • Efficiency of vehicle delivery system using dedicated sidings
  • Technological accumulation in bridges and foundation machinery
  • Stable revenue base supported by long-term order backlog
  • Customer response through local sales office network
  • Accumulated technology and experience of employees
  • New ventures into environmental businesses
  • Numerous awards from the Railway Friends Association
  • Management base rooted in the Chubu region
  • High automation and efficiency of production equipment

Competitive Advantages

  • Overwhelming dominance with about 50% share of Tokaido Shinkansen
  • Early orders and manufacturing capacity for superconducting linear vehicles
  • Stability as a consolidated subsidiary of major domestic JR Central
  • Low-cost manufacturing via standardized Nippon Sharyo block method
  • Strategic entry and rich track record in overseas railway vehicle markets
  • Bridge construction capabilities in public infrastructure
  • Diverse product lineup of various construction machinery
  • Quality assurance through superior design and R&D systems
  • Establishment of high-efficiency transport network for railway vehicles
  • Long-term management structure backed by solid financial base
  • Nationwide sales and support network
  • Strong relationships with local communities
  • Design and construction capabilities for railway vehicle maintenance facilities
  • Manufacturing technology for high-pressure tanks and special transport containers
  • Long history and reliability in the industry

Threats

  • Decline in bridge and construction machinery orders due to public works cuts
  • Rise of competitors in overseas markets
  • Cost pressures from fluctuating raw material prices
  • Business contraction risk from U.S. market withdrawal
  • Supply-demand fluctuations due to long replacement cycles for railway vehicles
  • Changes in public policy for transportation infrastructure development
  • High costs and technical difficulties in new technology development
  • Increased burden for product adaptation to stricter environmental regulations
  • Impact of natural disasters on production facilities
  • International exchange rate fluctuation risks
  • Challenges in talent acquisition and technology succession
  • Price competition pressure from rivals

Innovations

2023: Strengthening Superconducting Linear Motor Car Vehicle Development

Overview
Advancing manufacturing of L0 series vehicles for JR Central's Chuo Shinkansen linear line. Main contractor following Mitsubishi Heavy Industries' withdrawal.
Impact
Promoting practical implementation of next-generation high-speed rail technology

2022: Improvement of Nippon Sharyo Block Method

Overview
Improved lightweight, high-durability stainless steel body manufacturing method to enhance production efficiency and maintainability.
Impact
Cost reduction in manufacturing and extended service life

2021: Development of Environmentally Friendly Construction Machinery

Overview
Began manufacturing low-environmental-impact construction machinery such as electric and hybrid pile drivers.
Impact
Contributes to low emissions and strengthens compliance with environmental regulations

2024: Overseas Railway Vehicle Market Expansion

Overview
Strengthening sales networks for railway vehicles centered on Southeast Asia and vehicle development tailored to local needs.
Impact
Increased overseas orders and diversification of revenue base

2020: High-Performance Parts Development for Railway Vehicles

Overview
Enhanced development of new bogies and body parts to improve safety and durability.
Impact
Expansion of competitive product lineup

Sustainability

  • Technology development to improve energy efficiency of products
  • Expansion of environmentally considerate materials
  • Promotion of CO2 emission reductions and waste reduction at factories
  • Thorough compliance with environmental laws and strengthening of environmental management
  • Business operations considering coexistence with local communities