Improving profitability through exceptional quality and indirect structural reform

「After consolidating the former Modules and Systems business into the Mobility business, we will continue shifting toward higher-value-added products, centered on the digital cabin field. At the same time, we will pursue a fundamental review of our earnings structure, including exiting unprofitable products, selectively concentrating the product portfolio, reorganizing production sites and applying investment decisions rigorously based on ROIC.」

「Operating profit increased year on year, owing not only to higher revenue but also to the reduction and improvement of unprofitable products, improvements in abnormal costs for products whose production began two fiscal years earlier, lower provision for allowance for doubtful accounts and improvements in operating-level variances, among other factors.」

「We also discontinued the Second Medium-Term Management Plan, whose final fiscal year was the fiscal year ending March 2025, and positioned the fiscal year ending March 2025 as a period of management structural reform, devoting every effort to fundamental reform. As a result, together with the effects of measures planned under cost-structure reform, which formed part of the management structural reform, we achieved higher profit than in the previous fiscal year.」

「The situation continues to require a flexible response to change, rather than relying solely on conventional appropriate-pricing and cost-control measures.」

「Operating profit improved year on year, despite higher costs associated with the production launch of new modules for Europe, owing to higher revenue and progress in achieving appropriate pricing.」

「Operating profit improved year on year, despite higher costs associated with the production launch of new products, owing in part to progress in achieving appropriate pricing and reductions in logistics costs.」

「Although we focused on efforts to achieve appropriate pricing with business partners for higher material and logistics costs and on cost reductions, the recovery in operating profit was gradual because material costs remained high and the contribution to performance from the yen’s depreciation was limited for some products.」

「In the second quarter of the consolidated fiscal period, operating profit improved significantly, owing not only to higher revenue from the recovery in new-vehicle production, but also to stronger efforts to achieve appropriate pricing for increases in material and logistics costs charged to business partners, ongoing cost-cutting measures and the contribution to performance from the yen’s continuing depreciation.」

「Although higher component and logistics costs had a significant impact, and we worked to contain fixed costs, including by reviewing resource allocation, we limited the deterioration in performance as much as possible, but」

「Although we have been working to contain fixed costs, including by reviewing resource allocation, higher material costs and increased logistics costs resulting from supply-chain disruptions had a significant impact, resulting in lower revenue and lower profit year on year.」

「In addition, we received an award from an overseas automaker in recognition of the “provision of innovative, high-quality products and services.”」

「We also received awards from overseas automakers in recognition of our creation of outstanding added value and introduction of innovation, among other achievements.」

「We also completed the transition to the international quality-management-system standard “IATF16949” at all overseas local manufacturing entities. In addition, we have received quality and other awards from various domestic and overseas automakers.」

「Based on this plan, we implemented structural reform through group reorganization, including the absorption-type merger of our domestic technology-development subsidiary to strengthen our technology-development capabilities and efforts to improve the productivity of the 3 domestic manufacturing subsidiaries integrated at the beginning of the fiscal year, thereby advancing the development of a stronger business base.」

「Based on this plan, we implemented structural reform through group reorganization, including the absorption-type merger of our domestic technology-development subsidiary to strengthen our technology-development capabilities and efforts to improve the productivity of the 3 domestic manufacturing subsidiaries integrated at the beginning of the fiscal year, thereby advancing the development of a stronger business base.」

「Based on this medium-term management plan, we implemented structural reform through group reorganization, including the absorption-type merger of our domestic technology-development subsidiary to strengthen our technology-development capabilities and efforts to improve the productivity of the 3 domestic manufacturing subsidiaries integrated at the beginning of the fiscal year, thereby advancing the development of a stronger business base.」

「Across the company, we will work on product structural reform, design-process reform and the “exceptional inbound and market quality” initiative, while actively investing in equipment for production-management reform, with the aim of improving quality and strengthening price competitiveness.」

「We will further pursue improvements in customer satisfaction through our pursuit of exceptional quality, as well as indirect-cost structural reform, to improve profitability and strengthen our management base.」