Automotive Industry Demand and Economic Fluctuations in Major Markets

「In the automotive industry, the shift toward BEVs is viewed as a medium- to long-term trend, while demand growth has recently slowed. The operating environment is becoming more complex by region, due to factors including environmental regulations in Europe and intensifying competition from Chinese OEMs. Global business operations therefore require the flexibility to respond based on policy developments and market characteristics.」

「Net sales decreased by ¥2,855 million, or 1.7%, year on year to ¥165,706 million, due to lower production volumes in Japan, Mexico and Thailand.」

「In Japan, revenue was ¥50,018 million, down ¥3,557 million (6.6%) from the same period of the previous year, due to a decline in production volumes by major customers.」

「The company faces rapid changes in the operating environment, including the advance of emerging Chinese manufacturers in China and Southeast Asia and developments in US policy.」

「In the automotive parts market, the Group’s principal business area, the impact of the semiconductor shortage was eliminated and production began to recover, putting the market on a recovery track.」

「In the automotive parts market, the Group’s principal business area, the impact of the semiconductor shortage was almost eliminated and production began to recover, resulting in a continued gradual recovery.」

「During the three months ended the first quarter (1 April 2023 to 30 June 2023), the impact of COVID-19 and the semiconductor supply shortage was recovering, but raw-material and energy prices remained high due to the Russia-Ukraine situation and other factors.」

「During the consolidated fiscal year ended 31 March 2023 (1 April 2022 to 31 March 2023), efforts to realize a sustainable society, including carbon neutrality and the SDGs, and the development of next-generation vehicles accelerated further. Although the decline in production caused by the prolonged global impact of COVID-19 and the semiconductor supply shortage was recovering, raw-material and energy prices remained high due to the Russia-Ukraine situation and other factors, significantly affecting the company’s business activities.」

「During the six months ended the second quarter (1 April 2022 to 30 September 2022), uncertainty continued due to the impact of overseas lockdowns caused by the spread of COVID-19, the global semiconductor shortage, and rising raw-material and energy prices associated with the prolonged Russia-Ukraine situation.」

「The stagnation of economic activity caused by lockdowns overseas due to COVID-19 made it difficult for automotive manufacturers to procure some parts for domestic production, resulting in work stoppages and other issues. The company was consequently required to implement measures including temporary closures, and uncertainty continued.」

「Regarding the outlook, we expect uncertainty to persist, as the global economy faces concerns over a downturn caused by the Russia-Ukraine conflict in addition to the lack of a clear end to the COVID-19 pandemic.」

「For the first 3 quarters of the current consolidated fiscal year, consolidated revenue decreased by ¥21,715 million, or 20.4%, from the same period of the previous year to ¥84,533 million. Although revenue increased as a result of expanding sales channels, this was more than offset by lower production volumes at customers and the impact of changes in accounting standards, among other factors.」

「During the six months ended the second quarter (1 April 2021 to 30 September 2021), the outlook remained uncertain as the spread of COVID-19 led to lockdowns overseas, including in Southeast Asia, and the declaration of a state of emergency in Japan.」

「In the economic environment, sales volumes at automakers have been affected by the global semiconductor shortage. Accordingly, the Company worked toward achieving the targets of the medium-term management plan reviewed in October 2020 while monitoring changes in the business environment and other factors.」

「In the automotive market surrounding the company, changes in people’s movements due to COVID-19 led to some reassessment of automobiles as a means of transportation and an increase in demand, but concerns remain about the extent of the market’s recovery. In addition, Japanese, US and European overseas manufacturers have been forced to adjust production because of the semiconductor shortage, raising concerns that production volumes may decline. The outlook therefore remains uncertain.」

「For the nine months ended the third quarter of the current consolidated fiscal year, consolidated revenue was ¥106,248 million, down ¥31,062 million (22.6%) from the same period of the previous year, due to production cuts in the first quarter resulting from the impact of COVID-19 and a fire at a consolidated subsidiary.」

「For the six months ended the second quarter of the current consolidated fiscal year, consolidated revenue was ¥62,999 million, down ¥31,436 million (33.3%) from the same period of the previous year, due to production cuts by major customers resulting from the impact of COVID-19.」

「For the first quarter of the current consolidated fiscal year, consolidated revenue was ¥27,118 million, down ¥22,526 million (45.4%) from the same period of the previous year, due to substantial production cuts by major customers resulting from the impact of COVID-19.」

「Due to production cuts by major customers in Japan, China and Mexico, revenue was ¥182,219 million, down ¥2,094 million (1.1%) from the previous consolidated fiscal year.」

「Global production by domestic automotive manufacturers remained slightly below the previous year overall.」

「Due to sluggishness in the Chinese market, sales to major customers by the Chinese subsidiary decreased, and revenue was ¥2,502 million, down ¥718 million (22.3%) from the same period of the previous year. Segment profit (operating profit) was ¥104 million, down ¥158 million (60.2%), as efforts to reduce costs were outweighed by the impact of lower revenue and other factors.」

「Regarding the outlook, we expect uncertainty to persist, as the global economy faces significant concerns over the impact of changing political conditions, including the slowdown in the Chinese economy, trade friction stemming from US protectionist policies and the unresolved issue of the UK’s withdrawal from the EU.」

「We expect uncertainty to persist, owing to the economic slowdown accompanying structural reforms in China and concerns over trade friction with related countries arising from US trade policy, among other factors.」

「Economic trends, interest rates, foreign exchange rates and other factors in key markets (Japan, North America, Europe and Asia) may affect the Group’s operating results and other aspects of performance.」

「Because the sales performance of automotive-related manufacturers may be affected by economic conditions in the countries or regions where their products are sold, economic trends, interest rates, foreign exchange rates and other factors in key markets (Japan, North America, Europe and Asia) may affect the Group’s operating results and other aspects of performance.」