Economic Downturns and Declining Automotive Demand in Key Markets

「Despite the impact of the strengthening yen, revenue increased to ¥3.5905 trillion, up ¥115.6 billion, or 3.3%, year on year, due to higher vehicle sales, particularly in North America and Asia, and expanded sales of products in focus areas and other products.」

「Despite weak vehicle sales in Asia and vehicle production cuts associated with operating stoppages at Japanese customers, revenue increased to ¥7.1618 trillion, up ¥17.0 billion, or 0.2%, year on year, due to the weakening yen and stronger recovery of research and development costs, among other factors.」

「Despite the weakening yen, revenue declined to ¥3.4749 trillion, down ¥38.6 billion, or 1.1%, year on year, due to vehicle production cuts associated with operating stoppages at Japanese customers and weak vehicle sales in Asia.」

「Although China remained sluggish and emerging markets slowed, the global economy as a whole entered a growth trend as the disruption to economic activity caused by COVID-19 subsided.」

「Revenue increased year on year in every region due to the easing of the semiconductor shortage and strong vehicle sales, particularly in Japan and North America.」

「Although weak sales of Japanese and Western vehicles in China continued, revenue was supported by strong vehicle sales centered on Japan and North America, the weakening yen, and expanded sales, particularly in focus areas such as electrification, comfort and safety products,」

「As the semiconductor shortage began to ease, revenue increased to ¥1.7129 trillion, up ¥297.9 billion, or 21.0%, year on year, supported by the recovery in vehicle production, the weakening yen, and expanded sales, particularly in focus areas such as electrification, comfort and safety products.」

「During the fiscal year, the global economy entered a gradual recovery trend as restrictions on economic activity imposed due to COVID-19 were progressively eased.」

「Although the results for the nine-month period ended [this quarter] were affected by the spread of COVID-19 in China and the semiconductor shortage, vehicle production was still in the process of recovering year on year,」

「Although vehicle production cuts occurred in the first quarter due to lockdowns in China and the semiconductor shortage, vehicle production has been on a recovery trend since the second quarter,」

「During the three-month period ended [this quarter], although vehicle production cuts due to the semiconductor shortage, lockdowns in China and other factors had an impact, revenue increased to ¥1.4150 trillion, up ¥58.1 billion, or 4.3%, year on year, supported by expanded sales, particularly in focus areas such as electrification, and more favorable foreign exchange rates.」

「Global automobile production was strong and exceeded the previous year in the first quarter of the fiscal year, but shortages of semiconductors and raw materials became more severe from the second quarter onward, forcing vehicle production cuts and temporary shutdowns. In addition, numerous events affecting business activities occurred, including soaring component prices and material costs, logistics disruptions and higher transportation costs, particularly in the United States, the spread of COVID-19 variants, and the worsening situation in Ukraine.」

「Recovery from the impact of COVID-19 progressed, mainly during the first half, and revenue increased year on year in all regions.」

「During the six-month period ended [this quarter], although vehicle production cuts by automakers due to the semiconductor shortage and other factors had an impact, production and sales recovered from the impact of COVID-19 in the previous year. As a result, revenue increased to ¥2.5829 trillion, up ¥508.2 billion, or 24.5%, year on year.」

「During the cumulative first quarter, vehicle production and sales, which had declined the previous year due to the impact of COVID-19, recovered steadily.」

「Uncertainty over the outlook due to COVID-19 remained high. Domestic vehicle production and exports in Japan began to recover after reaching a low in May, but vehicle production declined year on year both globally and in Japan due to the unstable COVID-19 situation and shortages of semiconductors and materials.」

「During the cumulative third quarter, the global economy slowed due to the impact of COVID-19, and vehicle sales fell sharply in the first quarter. Although sales began to recover from the second quarter onward, revenue decreased to ¥3,508.6 billion, down ¥386.4 billion, or 9.9%, from the same period of the previous year.」

「Revenue declined to ¥2,074.7 billion, down ¥543.7 billion, or 20.8%, from the same period of the previous year, as vehicle sales fell sharply in the first quarter due to the impact of COVID-19. Although vehicle sales began to recover in the second quarter, revenue for the first half as a whole decreased.」

「The global spread of COVID-19 had a negative impact on economic activity in many countries. By segment, revenue declined significantly in all regions due to the impact of COVID-19.」

「The automotive market contracted in China and the United States due to trade friction, in India due to financial instability, and in ASEAN due to tighter loan regulations and other factors. It also contracted in Japan due to the impact of the consumption tax increase and other factors. In addition, the effects of the spread of COVID-19 became apparent from February 2020, and all markets turned negative year on year.」

「Although volumes increased through efforts to expand sales and other measures amid signs of an overall slowdown in the automotive market, revenue decreased to ¥3,895.0 billion, down ¥84.6 billion, or 2.1%, from the same quarter of the previous year, due to foreign exchange effects.」

「In Europe, amid a slowing market, revenue decreased to ¥295.0 billion, down ¥37.5 billion, or 11.3%, from the same quarter of the previous year. Operating profit decreased to ¥6.3 billion, down ¥3.2 billion, or 33.9%, due to unfavorable operating-volume variances and the effects of foreign exchange. In Asia, amid a slowing market, revenue decreased to ¥660.0 billion, down ¥58.1 billion, or 8.1%, from the same quarter of the previous year. Operating profit decreased to ¥50.4 billion, down ¥17.4 billion, or 25.7%, due to unfavorable operating-volume variances and the effects of foreign exchange.」

「In Europe, amid a slowing market, revenue decreased to ¥158.7 billion, down ¥23.3 billion, or 12.8%, from the same quarter of the previous year. Operating profit decreased to ¥3.2 billion, down ¥3.8 billion, or 53.9%, due to unfavorable operating-volume variances and the effects of foreign exchange, despite rationalization efforts. In Asia, amid a slowing market, revenue decreased to ¥329.1 billion, down ¥29.1 billion, or 8.1%, from the same quarter of the previous year. Operating profit decreased to ¥25.1 billion, down ¥8.6 billion, or 25.5%, due to unfavorable operating-volume variances and the effects of foreign exchange.」

「The automotive market expanded in emerging economies such as India and ASEAN, where economic conditions were firm, but the two largest markets contracted: China because of weak private consumption and the United States because of higher interest rates and other factors.」

「Although the Company has recently been affected by slowing markets in Europe and China」

「An economic downturn and the resulting contraction in automotive demand in the major markets of the consolidated companies, including Japan, North America, Europe and Asia, could adversely affect the consolidated companies' operating results and financial condition.」

「No new business or other risks arose during the cumulative third quarter, and there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「No new business or other risks arose during the six-month cumulative period under review. There were also no material changes to the business and other risks described in the annual securities report for the previous consolidated fiscal year.」

「An economic downturn and the resulting contraction in automotive demand in the major markets of the consolidated companies, including Japan, North America, Europe and Asia, could adversely affect the consolidated companies' operating results and financial condition.」

「No new business or other risks arose during the cumulative third quarter, and there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「An economic downturn and the resulting contraction in automotive demand in the major markets of the consolidated companies, including Japan, North America, Europe and Asia, could adversely affect the consolidated companies' operating results and financial condition.」