Economic downturns, declining demand and price competition in Japan and overseas

「In light of the easing of U.S. automotive environmental regulations during the fiscal year, we reviewed the medium- to long-term outlook for demand for electrified vehicles in the United States. As a result, we reassessed the recoverability of development assets related to our battery EVs and recorded an impairment loss.」

「Overall automotive demand in the US, our priority market, was approximately 15.8 million units, about 11% above the previous consolidated fiscal year.」

「Sales volume remained firm, led by the US, a priority market, and overseas sales volume increased by 101,000 units, or 18.1%, year on year to 660,000 units」

「Overseas sales volume remained solid, led by the US, a priority market, and increased by 39,000 units, or 22.3%, year on year to 215,000 units.」

「Demand for SUBARU vehicles remains strong, led by the US, and dealer inventory remains low.」

「Overseas sales volume remained firm, led by the US, a priority market, and increased by 24,000 units, or 15.9%, year on year to 175,000 units.」

「Overall automotive demand in the US, our priority market, was approximately 14.5 million units, about 4% below the previous fiscal year. Overall domestic automotive demand was approximately 4.2 million units, about 9% below the previous fiscal year.」

「Demand for SUBARU vehicles remains firm, led by the US, a priority market, but production and sales volume declined year on year due to these effects」

「Although production is constrained by a global semiconductor shortage and other factors, overall automotive demand is recovering, led by the US, a priority market.」

「The global economy remained in a difficult situation throughout the fiscal year due to the worldwide spread of COVID-19. Although some areas showed signs of recovery as economic activity gradually resumed, the automotive industry remains in an uncertain and unforeseeable situation due to factors including a global semiconductor shortage from the fourth quarter onward.」

「During the cumulative third quarter of the consolidated fiscal year, sales, particularly in North America, our priority market, showed signs of recovery from the impact of the novel coronavirus disease from the second quarter onward, and remained above the previous year's level in the third quarter. However, the impact on production and sales in the first quarter could not be fully absorbed, and revenue fell by ¥409.7 billion, or 16.5%, year on year to ¥2,074.8 billion due to lower automotive vehicle sales.」

「However, because the impact during the first quarter was substantial, revenue for the 6-month period ended the second quarter declined by ¥387.3 billion, or 24.1%, year on year to ¥1,218.4 billion due to lower automotive sales volume. Although expenses declined as selling, general and administrative expenses were reduced and warranty repair costs fell, operating profit declined by ¥64.2 billion, or 67.7%, year on year to ¥30.6 billion, and profit before tax for the quarter declined by ¥57.0 billion, or 61.2%, year on year to ¥36.1 billion, due to lower automotive sales volume.」

「Revenue for the 3-month period ended the first quarter was ¥457.0 billion, a year-on-year decline of ¥376.4 billion, or 45.2%, due to a worldwide decline in automotive sales volume caused by the spread of COVID-19. Operating loss was ¥15.7 billion, a year-on-year deterioration of ¥107.9 billion, also due to the sharp decline in automotive sales volume.」

「From January 2020 onward, the outlook for the economy became uncertain as the global spread of COVID-19 led to a stagnation in economic activity worldwide.」

「The global economy remained firm, but slowed in the second half of the fiscal year amid uncertainty surrounding developments in trade issues.」

「Revenue for the 9-month period ended the third quarter was ¥2,377.4 billion, a year-on-year decline of ¥60.3 billion, or 2.5%, due to lower automotive sales volume and lower sales associated with foreign exchange movements.」

「Combined domestic and overseas sales volume declined by 49,000 units, or 9.3%, year on year to 482,000 units, while revenue declined by ¥105.3 billion, or 6.9%, year on year to ¥1,416.4 billion.」

「A recession or decline in demand in Japan and, in particular, North America, our Group's principal market, or intensifying price competition could adversely affect sales and the profitability of the products and services provided by our Group.」

「In terms of profit, despite the effects of foreign exchange movements and an improved sales mix, operating profit declined ¥0.5 billion, or 0.1%, year on year to ¥306.3 billion, due to higher expenses, mainly selling expenses associated with rising US interest rates, and higher R&D expenses」

「In terms of profit, despite higher expenses, mainly selling expenses associated with rising US interest rates, and higher R&D expenses, operating profit increased ¥3.6 billion, or 1.7%, year on year to ¥212.1 billion, due to foreign exchange movements and an improved automotive sales mix, although」

「Sales of mini-vehicles declined by 1,000 units, or 6.8%, year on year to 16,000 units, partly due to the impact of the mini-vehicle tax increase introduced last year.」

「A recession or decline in demand in Japan and, in particular, North America, our Group's principal market, or intensifying price competition could adversely affect sales and the profitability of the products and services provided by our Group.」