Growing Dependence on the Chinese Market and Political and Economic Volatility

「In China, capital investment demand remained weak against a backdrop of intensifying price competition in the new energy vehicle (NEV) market and more cautious investment decisions by major EV manufacturers. Our sales to major EV manufacturers also fell below the previous year, causing net sales to fall below those of the same quarter of the previous year.」

「Although the Company was affected by sluggish demand growth amid intensifying price competition and slower growth in the EV market, it secured a slight increase in revenue for the full year. The sales environment in the EV market remained challenging overall due in part to changes in the production and investment trends of major customers and intensifying competition between Chinese and overseas manufacturers. Meanwhile, progress in winning large projects, mainly in the automotive battery sector, supported the Company's sales.」

「Uncertainty driven by US-China relations, Japan-China relations, and developments in various regulations continued, requiring a cautious response in the supply chain and business operations.」

「However, capital investment trends vary among companies and require continued monitoring. As a result, revenue for the interim consolidated period substantially exceeded both the year-earlier period and the initial plan, due to strong orders for hand nutrunners from major Chinese EV manufacturers, as well as large-scale equipment orders and the results of initiatives to diversify customers.」

「Although exports in China have recently shown some improvement, a sharp recovery is not expected, domestic demand is likely to remain sluggish for the time being, and capital investment is also weak. In the automotive industry, the Company's main sales market, declining capital investment by Japanese automakers has continued to increase. Although some companies have begun to review and expand investment in hybrid-related equipment, investment sentiment overall remains weak. As many EV manufacturers have emerged and gone bankrupt, the local automotive market is showing signs of restructuring. Some major EV manufacturers are actively investing in equipment, and the Company's sales to one such manufacturer increased despite intense price competition, resulting in revenue for the interim consolidated period exceeding the year-earlier period. However, no improvement is expected for the time being in the overall market's weak capital investment from the second half onward, and continued monitoring of overall market investment trends is necessary.」

「The Chinese economy continued to slow moderately from the previous year, with domestic demand remaining sluggish. Although exports were trending upward, they depended on EVs, and EV exports were also expected to reach a ceiling as excess inventory led to dumping and prompted importing countries to raise tariffs. Overall, the economy is expected to remain at a low level.」

「The Chinese economy remained sluggish, as the recovery at the beginning of the year proved temporary and the impact of the collapse of the property bubble was substantial. Personal consumption and trade declined, with no signs of recovery. In the automotive industry, China became the world's largest automobile exporter, with exports increasing by more than 50% year on year. However, the investment environment was unfavorable due to the withdrawal and investment restraint of some Japanese automakers, a growing number of bankruptcies among emerging local automakers, and declining profit margins across the automotive industry. Despite receiving some large orders, total product sales declined 18% year on year, led by hand nutrunners.」

「The Chinese economy slowed further due to weak consumption and exports and the property market downturn, and the economic stagnation spread across both domestic and external demand.」

「The Chinese economy had been recovering following the lifting of the zero-COVID policy, but shifted into a slowdown due to deterioration in the property market. Trade, capital investment, and personal consumption all showed sluggish growth or weakness. In the automotive industry, the Company's main sales market, EV-related capital investment plans had remained solid, but recently began to slow, and the outlook became uncertain. The Company's product sales declined from the prior fiscal year, led by hand nutrunners.」

「Although services consumption in China was recovering following the lifting of the zero-COVID policy, the overall pace of economic recovery was slowing. In the automotive industry, the Company's main sales market, plans for EV-related capital investment remained solid, while both orders and sales in each segment remained firm.」

「Economic activity in China stagnated amid concerns over an economic downturn caused by the government's large-scale quarantine measures under its zero-COVID policy. Industrial production, exports, and imports also remained sluggish, while the automotive industry continued to reduce production.」

「The Chinese economy experienced intermittent lockdowns as COVID-19 infections spread, causing personal consumption to fall short of expectations, while manufacturing output recovered gradually.」

「The Chinese economy temporarily weakened as the spread of COVID-19 infections led to lockdowns in some areas, but it gradually moved toward recovery as the lockdowns were lifted. In the automotive industry, plans for EV-related capital investment remained firm, as they had the previous year. By product category, servo presses generated lower revenue than in the year-earlier period, while all other segments generated higher revenue than in the year-earlier period.」

「As a result, revenue for the consolidated fiscal year increased amid active investment related to EVs, with demand for hand nutrunners expanding particularly in motors, electrical control equipment, and automotive batteries. Capital investment by Japanese transmission manufacturers also remained firm. Meanwhile, investment related to engines declined substantially, resulting in a year-on-year decrease in nutrunner revenue.」

「The Chinese economy, which slowed temporarily during the summer, shifted toward recovery from early autumn due in part to expanding exports and the easing of investment restraint measures. By product category, hand nutrunners remained firm in the second quarter, mainly among Japanese automakers. Equipment-related sales of nutrunners and screw-tightening equipment also increased due to capital investment by Japanese automakers.」

「In the first half of the year, China's exports and imports were both on an expansionary trend and domestic demand, including personal consumption, capital investment, and employment, remained firm. However, economic activity slowed due to the government's investment restraint policies and semiconductor shortages.」

「The Chinese economy continued to recover, with both exports and imports on an expansionary trend and domestic demand, including personal consumption, capital investment, and employment, remaining firm. By product category, both nutrunners and hand nutrunners remained firm, mainly among Japanese automakers.」

「Currently, the Company's joint venture and its initiatives in the Chinese market are progressing smoothly.」

「Corporate earnings and capital investment declined significantly due to the impact of the COVID-19 pandemic, but economic activity recovered ahead of other regions. Although the recovery in large-scale capital investment was expected to take some time, demand for hand nutrunners, which are tools, recovered early and exceeded the year-earlier period. Overall revenue recovered to a slight year-on-year increase.」

「Corporate earnings declined significantly due to the impact of the COVID-19 pandemic, and capital investment also fell substantially. However, economic activity has gradually recovered since May, and the Company will closely monitor the recovery in capital investment in the automotive industry based on the degree of recovery in domestic demand going forward.」

「Corporate earnings declined substantially due to the impact of the COVID-19 pandemic, and capital investment also fell significantly. However, economic activity has gradually recovered since May, and the Company will closely monitor the recovery in capital investment in the automotive industry based on the degree of recovery in domestic demand going forward.」

「While external demand in the Chinese economy had remained sluggish due to the effects of trade friction between the United States and China, exports began to recover as a result of an agreement with the United States to ease some restrictions, and employment and income conditions remained stable. In the automotive industry, new-vehicle sales remained sluggish and automakers' capital investment also remained weak. Against this backdrop, sales of both hand nutrunners and nutrunners were below the prior-year level.」

「Although there were signs that the Chinese economy was bottoming out, including a bottoming out in private investment due to the effects of government policies, external demand remained sluggish because of trade friction between the United States and China, and the recovery in domestic demand was delayed. In automotive-industry capital investment, restrictions on infrastructure investment were eased and there were signs of improvement despite uncertainty about the outlook, but companies continued to take a cautious stance toward capital investment. Against this backdrop, sales of all products except servo presses remained below the prior-year level.」

「The Chinese economy continues to suffer from sluggish external demand due to trade friction between the United States and China, while the recovery in domestic demand has also been delayed. In automotive-industry capital investment, there were signs of improvement as the government's restrictions on infrastructure investment were gradually eased, although the outlook remained uncertain. Against this backdrop, sales of nutrunners and screw-tightening equipment for automation systems remained below the prior-year level, while hand nutrunner sales remained firm.」

「External demand remained sluggish due to trade friction between the United States and China, while domestic demand also continued to slow. Although the automotive industry was becoming increasingly cautious about its outlook for capital investment, sales of hand nutrunners expanded and remained relatively firm during the cumulative first quarter of the consolidated fiscal year.」

「Although downside risks to exports intensified in some industries amid concerns over trade friction with the United States, capital investment in the automotive industry increased through the expansion of new plants and automation of production equipment. All 3 main product categories, led by hand nutrunners, remained firm and exceeded the initial forecast, including nutrunners and screw-tightening equipment.」

「Income conditions continued to show strong growth, and personal consumption remained firm due to the effects of tax cuts. However, as downside risks to exports intensified amid concerns over trade friction with the United States, capital investment in the automotive industry remained firm and exceeded the initial forecast. In the cumulative third quarter, sales of hand nutrunners expanded in particular, while nutrunners and screw-tightening equipment also generated higher revenue than in the year-earlier period.」

「As restraint on manufacturing output and capital investment gradually intensified amid concerns over trade friction with the United States, capital investment in the automotive industry remained firm and exceeded the initial forecast. In the cumulative second quarter, sales of hand nutrunners expanded in particular, while nutrunners and screw-tightening equipment also generated higher revenue than in the year-earlier period.」

「Although exports expanded against a backdrop of a recovery in the global economy and domestic and external demand remained firm, some areas showed weakness, including slower fixed-asset and infrastructure investment. With the outlook remaining uncertain amid concerns over trade friction with the United States, and with automotive-industry capital investment requiring careful monitoring, nutrunner sales remained firm in the first quarter and revenue exceeded the year-earlier period.」

「The Chinese market is expected to continue growing significantly. In addition, as the Company has established a joint venture in Shanghai and is developing its business there, its dependence on the Chinese market is expected to increase gradually. Against a backdrop of an economic slowdown and declining automotive demand following the end of tax incentives for automobile purchases, capital investment in the automotive industry continued to slow moderately. Nutrunner sales exceeded the prior-year level, but hand nutrunner sales were below the prior-year level.」

「While personal consumption and exports remained solid, capital investment is expected to enter a phase of gradual slowing. Capital investment by the automotive industry is also trending downward. Nutrunner sales exceeded the previous year, but sales of hand nutrunners fell below the previous year.」

「As signs of a slowdown have begun to emerge across the Chinese economy and a gradual economic slowdown is expected to continue, capital investment by the automotive industry is also trending downward. Nutrunner sales exceeded the previous year, but sales of hand nutrunners fell below the previous year.」

「In China and South Korea, orders showed signs of slowing in the first quarter, and developments from the second quarter onward require close monitoring.」

「The Chinese market is expected to grow significantly in the future. In addition, as we have established a joint venture in Shanghai and are developing our business there, we expect our dependence on the Chinese market to gradually increase.」

「The global economy continued to expand moderately overall, supported by the US economy, which remained on an expansionary trend amid expectations of large-scale fiscal spending under the Trump administration, and by policy support for the Chinese economy through monetary and other measures.」

「The Chinese economy remains relatively resilient in consumption, supported by public investment and expectations of further economic measures, but weakness continues across the economy, including slowing capital investment.」

「China's economic growth rate continues to slow, and economic growth across Asia is also slowing. In overseas markets, although cautious capital investment conditions persisted in China due to the economic slowdown, orders, particularly for tools, continued to trend upward.」

「The Chinese market is expected to grow significantly in the future. In addition, as we have established a joint venture in Shanghai and are developing our business there, we expect our dependence on the Chinese market to gradually increase.」