Demand fluctuation risk in the automotive and construction equipment industries

「Sales in the special steel products business were ¥64,905 million, down ¥16,621 million, or 20.4%, from the previous fiscal year. Although the overseas business in Indonesia recorded higher sales volume, sales were unchanged year on year due to foreign exchange effects. Meanwhile, lower demand and lower sales volume due to a blast furnace failure and fire at the Muroran complex resulted in a decline in sales for the special steel products business as a whole.」

「During the interim consolidated accounting period, demand declined in the construction equipment, industrial machinery and machine tool industries, which are major sources of demand for our Group, due to the deterioration in the global economy. The previously firm automotive industry was also affected by weak sales at certain manufacturers in North America and declining commercial vehicle production in Japan and Southeast Asia.」

「Meanwhile, demand in the construction equipment industry declined sharply from the second half, while demand in the industrial machinery and machine tool industries also continued to decline, significantly affected by the deterioration in China's economy.」

「In the construction equipment industry, demand declined amid concerns over an economic slowdown」

「Meanwhile, in the construction equipment industry, demand remained firm through the previous fiscal year, but signs of inventory adjustments have recently emerged.」

「In the automotive industry, production volumes recovered despite the impact of the Shanghai lockdown and prolonged shortages of semiconductors and other components. In the construction equipment industry, demand remained firm.」

「In the automotive industry, production continued to recover, although it was affected by the Shanghai lockdown and prolonged shortages of semiconductors and other components. Meanwhile, demand in the construction equipment industry remained strong.」

「In the automotive industry, production has improved, particularly in North America, from the previous year, when semiconductor shortages had a significant impact on production cuts. However, production cuts due to supply chain disruption caused by the Shanghai lockdown and shortages of semiconductors and other components continue to have an impact, leaving the outlook uncertain. Meanwhile, demand from the construction equipment industry has remained strong.」

「In the automotive industry, domestic and overseas demand was recovering, but the prolonged semiconductor supply shortage continued to affect new-vehicle sales, which remained depressed. Meanwhile, demand in the construction equipment industry, which had recovered sharply from the second half of the previous fiscal year, remained strong.」

「Demand in the construction equipment industry, which recovered sharply from the second half of the previous fiscal year, has remained strong. In the automotive industry, new vehicle sales, which had declined substantially, have recovered in China, North America and Japan despite the impact of semiconductor shortages.」

「In the automotive industry, new vehicle sales, which had temporarily declined sharply, have recovered mainly in China and North America, and domestic demand is also recovering, but recovery has been slow in Southeast Asia and Europe. In the construction equipment, industrial machinery and machine tool industries, demand, which had declined sharply due to the effects of the COVID-19 pandemic in addition to sluggish demand for domestic manufacturers since the previous fiscal year due to the US-China trade dispute, has been recovering since the second half in the construction equipment industry, while the industrial machinery and machine tool industries are still in the process of recovery.」

「In the automotive industry, temporary production stoppages by automakers and a sharp decline in demand caused new vehicle sales to fall substantially worldwide. Demand has recently recovered in China and North America, and signs of recovery have emerged in Japan, but recovery has been slow in Southeast Asia and Europe, leaving the outlook uncertain. In the construction equipment, industrial machinery and machine tool industries, demand had already been sluggish since the previous fiscal year due to the US-China trade dispute involving domestic manufacturers, and declined sharply due to the significant impact of the contraction in economic activity caused by COVID-19.」

「In the spring business, factory shutdowns at major automotive and construction equipment customers due to the effects of COVID-19 caused sales in our production locations, particularly the North American subsidiary, to decline sharply in April and May. Demand also declined as economic activity contracted in Japan and overseas. As a result, sales were ¥6,320 million, down ¥5,360 million, or 45.9%, year on year.」

「In the automotive industry, new vehicle sales declined in Japan due partly to the effects of the consumption tax increase in October of the previous year, while overseas sales declined due partly to the prolonged US-China trade dispute. In the construction equipment industry, domestic demand remained firm in the first half, but sales declined in the second half as construction equipment manufacturers reduced production following typhoon damage. Inventory adjustments also occurred due to sluggish exports resulting from lacklustre demand growth, particularly in Southeast Asia.」

「In the automotive industry, domestic conditions remained resilient, but production volumes declined in North America, China, Southeast Asia and Europe, in addition to the North American and Chinese markets, due to the effects of the US-China trade dispute and other factors. In the construction equipment industry, lower production at major customers in Japan led to lower sales and signs of inventory adjustments. Overseas, demand remained sluggish in parts of Southeast Asia, including Indonesia. Demand in both domestic and overseas markets also declined sharply in the industrial machinery and machine tool industries.」

「The automotive industry remained firm in Japan, but sales volumes declined in China and North America due to the effects of an economic slowdown. In the construction equipment and commercial vehicle industries, signs of weakening demand were seen in parts of Southeast Asia, including China and Indonesia.」

「In the construction equipment industry, domestic demand recovered from the decline following rush demand ahead of emissions regulations, while overseas demand remained firm, centered on strong demand in Europe, North America and Asia. In the automotive industry, domestic demand was driven by sales of light vehicles, while overseas demand remained firm, particularly in North America and Southeast Asia, despite concerns about the widening U.S.-China trade friction and the resulting slowdown in the Chinese economy.」

「During the six-month period ended 30 September 2018, the business environment surrounding our Group remained as follows. In the construction equipment industry, domestic conditions remained firm despite falling below the same period of the previous year, when there was rush demand ahead of emissions regulations, while overseas conditions remained strong, led by demand in China. In the automotive industry, domestic demand for mini vehicles drove overall sales, which remained firm.」

「Many of our Group's principal products are supplied to the automotive and construction equipment industries. Accordingly, if production levels in these industries decline, business performance could be affected.」

「During the nine-month period ended 31 December 2017, the business environment surrounding our Group remained as follows. In the construction equipment industry, domestic demand declined following the rush demand ahead of emissions regulations, but remained firm, while demand in China and Southeast Asia remained solid. In the automotive industry, sales of mini and compact vehicles drove the domestic market, while strong demand continued overseas, particularly in Europe, the United States and China.」

「During the second quarter of the fiscal year under review (April 2017 to September 2017), in the construction equipment industry, domestic demand remained supported by rush demand ahead of emissions regulations, while overseas demand, particularly in China and Southeast Asia, remained strong. In the automotive industry, sales of light and compact vehicles recovered, while exports, mainly to Europe and North America, remained firm.」

「During the three-month period ended 30 June 2017, the business environment surrounding our Group remained as follows. In the construction equipment industry, domestic demand was supported by rush demand ahead of emissions regulations, while overseas demand, particularly in China and Southeast Asia, continued to recover. In the automotive industry, conditions remained firm in Japan and overseas, particularly in North America and China.」

「In the construction equipment industry, demand in Japan and across Asia, including China, has been recovering since the second half.」

「During the third quarter of the fiscal year under review (April 2016 to December 2016), conditions in the construction equipment industry remained severe, although signs of improvement emerged in North America and China. In the automotive industry, North America remained firm, while domestic sales continued to be sluggish.」

「During the second quarter of the fiscal year under review (April 2016 to September 2016), demand in the construction equipment industry remained weak, although signs of bottoming out emerged, amid a continued appreciation of the yen. In the automotive industry, North America remained firm, while domestic unit sales declined due in part to the impact of last year's increase in the light-vehicle tax.」

「During the first quarter of the fiscal year under review (April 2016 to June 2016), the business environment surrounding the Group was affected by an appreciation of the yen. Demand in the construction equipment industry remained sluggish, including in Japan and China. In the automotive industry, North America remained firm, but domestic unit sales declined due in part to the prolonged impact of a decline following last year's increase in the light-vehicle tax.」

「Many of our Group's principal products are supplied to the automotive and construction equipment industries. Accordingly, if production levels in these industries decline, business performance could be affected.」