Innovation is the Key to NGK's Success

NGK was established in 1936 and the initials stand for Nippon Gaishe Kaisye (Japanese Insulator Company). This is the familiar brand used to market plugs, but the company also operates another brand for its ceramics and sensors business – NTK which stands for Nippon Tokusy-Tougyou Kaisya (Japanese Techn. Ceramic Company). Ceramics give the company a real strength because the products are not just used for engine plugs. They are used for tappets and non-automotive products in the computer sector. Together NGK and NTK also manufacture caps/cables, glow plugs, aircraft plugs, cutting tools and ceramic rotors – all contributing to a global presence and a European turnover topping £116m.

NGK’s specialism in ceramics also means that its insulation material is second to none and channelling a massive voltage down the centre of an insulator efficiently is crucial to retaining spark integrity and combustion efficiency. The electrode has to work effectively across a broad range of temperatures, so this too needs to be designed with a wide heat range. So core material and electrode design is crucial. And this must be researched in association with the engine cylinder head designer - with future emissions legislation requirements in mind. It’s a partnership approach rather than a solo flyer aloof from the practicalities of the industry.

Massive investment in R&D gives NGK the means to work closely with automotive and aircraft engine designers, anticipating the changes that will affect the spark plug and sensors markets. As well as enabling them to become a major player in the provision of o.e. plugs it also allows them to be very aware of aftermarket needs and keeps them ahead of those companies not involved with o.e.

Market Shares and O.E. Growth

NGK hold a 49% share of the UK independent garage market for plugs, and its European aftermarket sales has grown by 25% since 1993. In fact NGK is the number one brand for o.e. plugs worldwide. But in Europe it is still best known for its aftermarket strength with a market split is 68% aftermarket, 14% o.e.m. and 18% o.e.s. But recent o.e. sales have shown a dramatic increase.

Sales Development - NGK Europe

Source; NGK

Share per Sales Channel - NGK Europe

Source; NGK

The move into sensors was a natural one with tighter emissions controls demanding even more sensor equipment. And there will be a useful replacement market for sensors because they are lifed up to 100,000 miles – at least one replacement is likely.

R&D – The Powerhouse of Success and the Guardian of its Independence

The NGK aim is to always develop the most advanced product in the sector. So it devotes 6% of the company'’ turnover to R&D compared with the Japanese average of 3.2%. The company’s European Technical Centre at Ratingen near Dusseldorf in Germany was opened in 1990 and represented an initial investment of £13m at today’s prices. The facility has a total area of 2,200 sq. m and is designed to give European car manufacturers all the support they need in engine and chassis testing, cold climate simulation and specialised exhaust emissions work. At the facility, vehicle manufacturers and NGK work together to solve problems, and it is seen as an investment for future business rather than a service to sell at a profit per job.

NGK’s sheer technical ability is probably the most important single factor contributing to its success. The company is constantly developing plugs for the future with even longer life and even more effective multi-ground electrode design and smaller sizes to fit into crowded cylinder heads. Being a leading edge company maintains a value on innovation, and this is the core strategy across all the products within the NGK and NTK portfolio. It keeps re-inventing the technology in its areas of specialism and this keeps it ahead of the competition and gives it a higher value than a component manufacturer simply following trends. Without it, the relatively small size of the company in global terms would make it a ripe target for acquisition by a bigger player such as a vehicle manufacturer. (9/99)