New England Bearing
New England Bearing & Axel Company, (NEB) is the world's largest manufacturer of wheels, axels and bearing subassemblies (collective Products) for the automotive, truck and aircraft markets, having a worldwide market share of approximately 19%. The international market for Products is dominated by 3 major manufacturers (including NEB), one of which is European and another of which is Japanese (Asahi Bearing). The Japanese market for Products is the largest in the world (because of the international market share held by Japanese automobile makers) followed closely by the United States and the European Commonwealth (EC).
NEB wishes to expand into the market for Products in Japan and has been engaged in discussions with Minami Bearing Company (MBC) for the distribution of NEB's products in Japan and the manufacture in Japan of NEB's Products under a technology and know-how license from NEB. MBC is a mid-sized Japanese wheel, bearing and axel manufacturer and distributor, which supply the automotive and aircraft original equipment, replacement and repair and wheel aftermarket (OEM sales constitute roughly 50% of total sales, replacement and repair sales constitute approximately 20% of total sales, and wheel aftermarket sales constitute approximately 30% of total MBC sales). Approximately 50% of MBCs profits, and 40% of total sales, are generated by sales of precision bearings and wheels for precision machinery applications and, as such, do not compete with NEBs sales of Products.
MBC is the second largest manufacturer in Japan, but has very little international presence (it supplies several Korean automotive manufacturers from its factories in Japan). MBC has a strong distribution and repair network in Japan, which has been developed over a 40-year period.
The NEB negotiating team will be traveling to a meeting with MBC in Japan to negotiate a technical know-how license and distribution agreement for automotive subassemblies and automobile and aircraft wheel aftermarket sales.