Company history

The company that exists today was born twice, a year apart. In 1917 the storage-battery works of Shimadzu Seisakusho was spun out in Kyoto as Nippon Denchi, with Shimadzu Genzo as its first president and 145 employees; its early customers were the Navy, Railway and Communications ministries. In 1918, in Osaka, Yuasa Shichizaemon founded the Yuasa Storage Battery Works. Both began building automobile batteries almost immediately — 1919 for each — and both chased the same government contracts and the same carmakers. From the first year, Japan's lead-acid industry was two firms, in two cities, selling the same product to the same buyers.

Neither swallowed the other for more than eighty years, and the physics of the product explains why. A lead-acid battery is heavy, cheap for its weight and consumed rather than kept, so freight is a large share of its cost and regional supply points pay for themselves. As long as demand grew, two makers could both earn a return. Postwar motorisation supplied that growth: by 1967 Nippon Denchi held 36% of domestic output, the largest share in the country.

The profit, though, did not come from the carmakers. Roughly half of automotive battery demand was original equipment and half replacement, and it was replacement that paid — the neighbourhood repair shop was a weak negotiator, while assemblers pressed relentlessly on price. President Okada Tatsuzo told an interviewer in 1967 that the lead battery had grown chiefly on the back of the automobile and had another decade of life in it. He was right about the decade. The replacement franchise held for more than twenty years, and it was the whole engine of the GS brand.

In the 1990s the premise dissolved. Car servicing consolidated into auto-parts chains and dealer networks, and those buyers could push back on price exactly as the assemblers always had; the weak counterparty the industry had depended on simply stopped existing. At the same time better cars made batteries last longer, stretching the replacement cycle. The domestic replacement market shrank from ¥70.6 billion in fiscal 1993 to ¥59.9 billion in fiscal 2002, and the unit price fell from about $54 (¥6,000) to about $29 (¥3,600) — roughly 40% in ten years. Volume and price gave way together.

Nippon Denchi posted a net loss of $30.7M (¥4bn) for the year to March 1999 — its first as a listed company — and shut lines at its Fujisawa plant. Yuasa Corporation (renamed from Yuasa Battery in 1992, and by 1998 developing lithium-ion polymer cells) faced the identical market. There was no longer room in Japan for two lead-acid makers of comparable size.

What followed was not the usual consolidation. Ordinarily the strong absorb the weak; here neither side was strong, and the point of combining was not scale but less capacity. In July 2003 the two signed a basic agreement, and in April 2004 the joint holding company GS Yuasa Corporation was listed in Tokyo and Osaka with both firms beneath it. Rivals who had spent eighty-six years fighting for the same customers joined hands in order to close factories.

The first year of the combined company produced a net loss of $133.5M (¥15bn), including ¥7.6 billion of write-offs and restructuring charges; the following year added ¥5.3 billion for 496 voluntary redundancies, ¥2.2 billion of pension charges and ¥4.1 billion tied to redeveloping the closed Takatsuki site, and only asset sales kept the result positive. The pain was not shared evenly. Takatsuki descended from the Osaka plant Yuasa had built in 1919; the holding company's head office was Nippon Denchi's address in southern Kyoto, and Nippon Denchi was the surviving entity when the two merged outright in 2006. Management had said as much at the outset: cut fixed costs at home, invest in Asia abroad, and put the research money into lithium-ion.

The lithium strategy had one governing rule — never build the capacity alone. A joint venture halved the capital and the development risk and, crucially, came with a customer attached, which for a latecomer facing Panasonic and the Koreans was the only realistic way in. So: Tata AutoComp GY Batteries in India (2005), Lithium Energy Japan with Mitsubishi Corporation and Mitsubishi Motors (2007) for PHEVs and EVs, and Blue Energy with Honda (2009) for hybrids — one partner per segment, each with its own dedicated line. Equity issues in 2009 lifted paid-in capital to ¥33.0 billion, a convertible bond in 2014 raised ¥25 billion more, and in March 2012 the first Lithium Energy Japan building opened in Ritto, Shiga.

Lead, meanwhile, was not left to die. GS Yuasa consolidated Siam GS Battery in Thailand (2013), took a stake in Turkey's Inci Aku (2015, renamed Inci GS Yuasa), added Yuasa Battery Malaysia, opened GS Yuasa Hungary in 2017 — and in 2016 paid $147M (¥16bn) for the lead-acid business Panasonic was exiting. Overseas revenue in Europe and the Americas alone passed ¥180 billion by the year to March 2015, replacing what Japan had lost. Consolidated operating profit rose from ¥18.1 billion (FY2013) to ¥22.6 billion (FY2018). The lithium ventures, accounted for by the equity method, were almost invisible in those segment numbers: lead earned the money, lithium consumed it.

From the year to March 2021 automotive lithium-ion finally appeared as its own consolidated segment: ¥165.3 billion of revenue and ¥12.2 billion of operating profit, then ¥186.7 billion and ¥10.0 billion the year after. Visible at last, and visibly thin — a margin in the 5% range, far below what the old replacement business had earned. Around it the company squared off four pillars: domestic automotive, overseas automotive, industrial batteries and power supplies (enlarged by the 2021 purchase of Sanken Electric's social-systems business), and automotive lithium. Even then the old Yuasa side kept contracting; the Odawara works closed in 2021, seventeen years after the merger.

2023 was the pivot. GS Yuasa published Vision 2035 — a declaration that it intends to become an energy-management company rather than a battery maker — and in July set up Honda·GS Yuasa EV Battery R&D to develop next-generation BEV cells. A December share issue raised paid-in capital to ¥52.8 billion to fund a second lithium plant in Shiga, planned with Honda at roughly $3.1B (¥434bn) of combined investment and 20 GWh a year from 2027. In the same month the Chinese subsidiaries in Tianjin and Shunde were deconsolidated: with Chinese and Korean makers now entrenched at home, the resources were pulled back to Japan, Europe and ASEAN.

The other half of 2023 was an admission. Lithium Energy Japan — the 2007 venture that was supposed to carry PHEVs and EVs — never saw the demand it was built for, accumulated losses, and was taken fully in-house, its business transferred to the parent in March 2024 and the company liquidated that September. Seventeen years after choosing partners so as not to bear the risk alone, GS Yuasa took the risk onto its own balance sheet. Murao Osamu, president for nine years and the author of Vision 2035, handed over to Abe Takashi in June 2024. Fiscal 2024 then produced record figures — ¥580.3 billion of revenue and ¥50.0 billion of operating profit — driven by overseas lead-acid, price increases, a weak yen and the consolidation of Turkey. Automotive lithium reached about ¥260 billion of revenue but only ¥18.7 billion of operating profit, a 7.2% margin. Twenty years of funding, and the money is still made in lead.