NTN Corp., the world’s third-biggest bearing maker, will increase global output on rising demand from automakers including Honda Motor Co. and Nissan Motor Co. as it targets boosting sales a third to 700 billion yen ($8.4 billion) in three years.

The company plans to increase bearing production by 50 percent at a plant near Chicago starting in April as U.S. parts makers lose ground, Yasunobu Suzuki, chief executive officer, said last week in an interview at NTN’s Osaka headquarters. It will also boost output in China, India, Romania, Brazil and Thailand to help combat the effects of the yen’s strength.

“We want to use local materials and local labor, so we don’t have to worry too much about the effects of currency fluctuations,” said Suzuki, 73.

NTN has had more than 40 new orders for car parts since April, adding several billion yen to second-half sales, Suzuki said, without giving a specific figure. The company, which competes with Sweden’s SKF AB and Germany’s ThyssenKrupp AG, targets a 16 percent increase in annual sales to 523 billion yen. Over the past two years, NTN posted annual losses and revenue fell 15 percent amid the global economic slowdown.

Net income for the six months ended September may have “slightly exceeded” the company’s forecast of 7 billion yen, Suzuki said. NTN in July raised its full-year forecast by 42 percent to 13.5 billion yen as worldwide demand recovered.

Car Sales Rebound

U.S. sales of cars and light trucks rose about 29 percent during September compared with a year earlier, and have risen more than 10 percent this year, according to data compiled by Bloomberg. Asian automakers including Toyota Motor Corp. and Hyundai Motor Co. reported increased sales last month, and Volkswagen AG, Europe’s largest automaker, sold 14 percent more vehicles, according to researcher Autodata Corp.

NTN’s three-year plan, which starts in April and targets a 34 percent increase in sales, also includes building a research and development center in Shanghai to meet demand in China, the world’s largest auto market, as well as a new facility in Chennai, India, Suzuki said.

“Eighty-three yen per dollar makes things extremely hard for us,” said Suzuki.

The yen, which has risen 11 percent against the U.S. dollar and 9.8 percent against the euro since NTN’s fiscal year started in April, traded at 83.06 against the dollar as of 4:02 p.m. in Tokyo. A stronger yen hurts overseas income at Japanese companies when converted into their home currency.

Deming Prize

NTN’s stock closed 3.9 percent higher today at 377 yen on the Tokyo Stock Exchange, the biggest increase in a month. It has declined 9.6 percent this year compared with a 4.6 percent drop in the 121-member Topix Machinery Index.

NTN’s forerunners, Nishizono Ironworks and Tomoe Trading Co. started sales of bearings in Osaka’s Nishi ward in 1923. The company in 1954 was the first Japanese machinery maker to receive the Deming Prize for quality control, according to NTN’s website, and now employs about 18,000 people worldwide.

Suzuki said NTN is seeking new sales opportunities as U.S. auto-parts makers see their market share shrink and manufacturers in China and developing countries are starting to demand higher-quality components.

NTN, whose bearings are also used in printers and food production equipment, gained about 67 percent of its sales from the components last fiscal year. Meanwhile, the proportion of sales in Japan has decreased in each of the past five years, ceding ground to the U.S., Europe and Asia.

“I don’t think the number of cars in Japan will increase,” Suzuki said. “In China, people are starting to drive luxury cars. As the yuan strengthens and the euro weakens, we’ll start to see more of this phenomenon.”

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