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A new process for manufacturing high-strength gears has been developed to meet the requirement of automobile transmission miniaturization. The points of the process are to increase the shot peening intensity and to perform optimal control of the initial (before shot peening) microstructure by heat treatment corresponding with the peening intensity in order to obtain higher residual compressive stress. The new process, named Carbonitriding and Hard Shot Peening in Mazda, brings a much higher fatigue strength than the one obtained by the conventional carburizing and shot peening process.