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5. Aisin Corporation (Formerly Aisin Seiki Co., Ltd.) Business Report FY ended Mar. 2020

Aisin Corporation (Formerly Aisin Seiki Co., Ltd.) Business Report FY ended Mar. 2020

Recent Development

Integration with Aisin AW
-The Company announced on October 31 that it has reached an agreement on business integration with Aisin AW Co., Ltd. (Aisin AW), an Aisin Group automatic transmission (AT) maker, in April 2021. Sales of ATs in China are declining rapidly, and the Company has judged that early integration with Aisin AW is necessary in order to enhance managerial efficiency and to invest in CASE (connectivity, autonomous driving, shared service, and electrification) businesses. Toyota Motor Corporation, which has a stake in Aisin AW, also agreed on the business integration, and will transfer all of its Aisin AW shares to the Company as early as April 2020. The Company will be the surviving company. (From an article in the Nikkan Jidosha Shimbun on November 1, 2019)

-In April 2019 the Company consolidated the business operations of Aisin AI and Aisin AW, merging all of Aisin AI’s operations into those of Aisin AW. In April 2021, the Company plans to consolidate Aisin AW into Aisin Seiki, which will complete the consolidation of Aisin Seiki, Aisin AI, and Aisin AW into one company.

CASE Business Operations
<Increase sales of autonomous driving-related parts>
-The Company has revealed plans to increase its sales of autonomous driving-related parts to JPY 200 billion by fiscal year 2023 (ending in March 2024). The company expects to receive orders for collision-mitigation braking and driver monitoring systems, as well as systems used for parking assistance or autonomous valet parking. The Company commercialized a parking assist system that eliminates the need for steering operation in 2003 by applying image processing and sensor technologies for back guide monitors. An advanced version of the system that also eliminates the need for acceleration and braking operation has been adopted for the all-new Yaris scheduled to be launched in Japan by Toyota Motor Corporation in February 2020. This system is also expected to be adopted for the all-new Yaris scheduled to be released in Europe by Toyota. The Company is also developing a system that starts automated parking by remote control by the driver who has got off the vehicle and a valet parking system that works in conjunction with the infrastructure and allows a vehicle to drive at a dedicated parking lot and park in a space without human intervention. (From an article in the Nikkan Jidosha Shimbun on January 30, 2020)

<Expanding CASE Business Operations>
-The Company will actively focus on business in the fields of Connected and Shared out of CASE (Connected, Autonomous, Shared, Electric). The company plans to operate its Choisoko shared shuttle bus service for elderly people in ten urban areas in Japan by the end of 2021, and to start demonstration tests for road maintenance based on the information obtained with sensors mounted on vehicles. This summer, the Company will release the ILY-Ai one-man electric mobility. The company will improve its profitability in the fields of autonomous driving and electrification, and also secure profits in the fields of Connected and Shared, where the company can promote many business projects on its own. The Company aims to triple CASE business sales to JPY 1 trillion by the fiscal year that ends in March 2024. (From an article in the Nikkan Jidosha Shimbun on January 23, 2020)

<Verification tests for autonomous valet parking>
-Amano Corporation (Amano) announced that it will conduct verification tests for autonomous valet parking at a general parking lot in Nagoya City in cooperation with the Company. The verification tests will include an evaluation of customer acceptance on the assumption that autonomous valet parking is used for car sharing services. Until now, Amano has researched and developed a parking lot control system using license plate recognition and other image processing technologies. In this effort, the company developed a camera system that detects and measures positions of vehicles and pedestrians moving at a parking lot by applying image analysis technology using artificial intelligence. This camera system provides autonomous vehicles at a parking lot with data about the situation in the area to support safe autonomous driving. (From an article in the Nikkan Jidosha Shimbun on January 29, 2020)

<New artificial intelligence (AI) development facility>
-The Company announced that it will establish Kyushu Development Center Hakata Laboratory, a new artificial intelligence (AI) development facility, in Hakata ward, Fukuoka city in Japan. The Company plans to open the facility in May 2020 to strengthen the company’s development regime for AI that is indispensable for CASE technologies. The facility aims to develop software that monitors the surroundings of the vehicle and estimates passengers’ positions inside the vehicle, which utilizes AI based image analysis. On the other hand, Kyushu Development Center which was established in 2014 conducts component technology development for hardware such as sensors that detect objects by using light and radio waves and undertakes test evaluations using actual vehicles. (From a press release on December 5, 2019)

System to display advertisements while vehicle is traveling on the road
-The Company announced that it will conduct a demonstration test for a next-generation in-vehicle advertisement system along a route in Chita Peninsula, Aichi Prefecture, from March. The Company, with its newly developed Rhythm Platform that predicts the status of passengers on the move, will broadcast voice entertainment contents and voice advertisement about destinations and surrounding areas, shops, facilities, merchandise, and services, whenever necessary, in accordance with the destination, vehicle location, and the level of traffic congestion. The Company will verify marketing approaches appropriate for customers on the move. (From an article in the Nikkan Jidosha Shimbun on February 8, 2020)

Joint research agreement in the field of AI
-The Company announced that it has signed a joint research agreement with the Indian Institute of Science (IISc) in the field of artificial intelligence (AI). IISc, established by a founder of the Tata Group, is a science and technology research and education institute. Many AI applications at present are incapable of dealing with situations which had not been assumed in the development phase and both organizations are conducting research on the Versatility of an AI that can realize adaptive ability equivalent to humans. By utilizing the domain knowledge of the Company and the advanced expertise of IISc, they started Unsupervised Domain Adaptation, a kind of Transfer Learning, from October and they will also further develop Continual Learning. At the same time, they aim to apply their research outcomes to other fields such as quality inspection, predictive maintenance and connected cars. (From a press release on November 14, 2019)

-The Company announced that it has begun joint development of explainability in artificial intelligence (AI) with a Canada-based AI start-up. The Company has formed partnership with Element AI (EAI), which offers AI-powered services to businesses. AI is used to learn massive amounts of data and make accurate assessments. However, AI poses the black box problem with pass/fail results such that a process of judgment is not revealed to humans. Experts point out that this may encourage discrimination. When AI is applied to production technologies for automobiles and parts, a basis for judgment is unknown in some cases, causing concern that quality could instead decline. Through joint development with EAI, the Company intends to overcome these disadvantages and promote active use of AI. (From an article in the Nikkan Jidosha Shimbun on October 21, 2019)

Demonstration of a road maintenance management service
-The Company and Aisin AW Co., Ltd. announced that they will start demonstration of a road maintenance management service with Okazaki city in Japan from October 2, 2019. By detecting road surface condition errors based on information collected from vehicles on the roads, the service shares this information, supports planning for repair, and implements countermeasure work. Aisin Group will provide services that support road patrol work and manager’s repair planning work by utilizing data from vehicles using connected technologies and sensor information analysis technologies. (From a press release on September 30, 2019)

Two Group software companies were consolidated
-The Company announced on August 29 that it has officially decided to consolidate its two software development subsidiaries on October 1. Aisin comCruise Co., Ltd. (Nagoya City, Aichi Prefecture) and AW SOFTWARE Co., Ltd. (AW SOFTWARE, Sapporo City, Hokkaido) will be integrated to establish Aisin Software Co., Ltd. The new company will be headquartered in Kariya City, Aichi Prefecture, and Yasunobu Ito, President of AW SOFTWARE, will become the president. It will have JPY 98 million in capital. The Company will own 58.9%, and Aisin AW Co., Ltd. 41.1%. The new company will have six sites in Japan and the number of employees will be about 735. Aisin Group has been enhancing its development ability and efficiency by consolidating its managerial resources. The integration of these two software companies will be one of these efforts. (From an article in the Nikkan Jidosha Shimbun on August 30, 2019)

Outlook for FY ending Mar. 31, 2021

-Outlook for the fiscal year ending in March 2021 is undetermined.

Major R&D Achievements

• The Company’s e-Axle is being equipped on Toyota’s redesigned BEVs, the C-HR and IZOA; and on Lexus’ BEV, the Lexus UX300e.
• Self-parking technology that eliminates the need for steering, accelerating, and braking is being equipped on the Toyota Yaris.

Established the Connected & Sharing Solutions business in Aisin AW

-In October 2019 in Okazaki, Aichi Prefecture the Company started actual demonstrations and testing of road-patrol (monitoring) work and support for repair-planning operations, making use of its existing navigation-system and connected technology.

R&D Activity

Self-driving concept car
-Aisin Group announced it will unveil its i-mobility Type C-20, an autonomous concept vehicle for community use that will demonstrate the connection and interaction between the vehicle, its human riders and cloud-based data at CES 2020 in Las Vegas. An in-cabin monitoring system and location-based data combine to provide transportation that connects with external information resources, meaning onscreen graphics can change and respond to rider interest and local attractions. The driverless i-mobility TYPE-C20 vehicle uses a number of sensors to detect obstacles outside the vehicle to provide safe and comfortable mobility. The zero-emission i-mobility TYPE-C20 uses Aisin's eAxle; regenerative brake system; electric ramp and lower, rail-free power sliding doors; and heat management and optimal thermal control. Additionally, Aisin Group will introduce services that detect road surface conditions by using location information platforms (such as the logistics support system based on car navigation technology) and actuator information technology. To demonstrate personal mobility, Aisin Group will show its ILY-Ai, the world's first multi-functional, electric intelligent personal mobility vehicle. Aisin will also show its frame-model product demonstration vehicle, i-mobility Type-T, which is equipped with a wide range of the latest products in the Aisin Group lineup. (From a press release on December 13, 2019)

>>>Click here to view product images

Displayed Solutions for Electric Vehicles at Frankfurt Motor Show
-The Company announced that it will showcase products for electric vehicles (EVs) such as thermal management and light weight technologies at IAA 2019. The company will introduce its Aisin EV system comprising eAxle, electric pumps, regenerative braking systems, and aluminum battery frames. Aisin will also exhibit six types of electric water pumps from small general purpose to FC stack cooling. BluE Nexus, a joint venture between Aisin and Denso, will present drive modules for electrified vehicles and 1-motor hybrid transmissions. (From a press release on September 5, 2019)

Investment outside Japan

<China>
-On May 23, 2019, a joint venture between GAC Trumpchi and Aisin AW, GAC Aisin AW Automatic Transmission Co., Ltd., officially launched the construction work in the GAC Zhilian Electric Vehicle Industrial Park. GAC Aisin AW held a cornerstone laying ceremony on December 23, 2018. Its primary products are 6-speed automatic transmission, and the company plans to launch the mass production by the and of 2020. Upon completion, it’s going to have an annual production capacity of 400,000 units, and its sales are expected to exceed CNY 3.5 billion. (From a press release on May 31, 2019)

-The Company announced on April 17 that it has jointly established Aisin (Anqing) Auto Parts Co., Ltd. with Anhui Ring New Group Co., Ltd. (Anhui Ring New Group) to support production expansion of passenger car automatic transmissions (ATs) in China. The joint venture will produce aluminum die-cast parts such as AT cases. It has CNY 237 million (JPY 4.03 billion) in capital. The Company owns 85%, Anhui Ring New Group 15%. Production is scheduled to start in August 2020. In China, Aisin group has been supplying aluminum die-cast parts from plants in Tangshan, Taizhou, and Foshan, to AT and engine plants. The joint venture will boost supply capacity mainly for the group’s plants in Eastern China. It has 29,400 square meters of total floor area, and will have about 150 employees at the end of 2020. (From an article in the Nikkan Jidosha Shimbun on April 18, 2019)

<Thailand>
-According to Bangkok Post, Aisin Asia Thailand, the auto parts distributor of Japan's Aisin Group, announced a 3-year plan to achieve THB 2 billion in annual revenue by 2022, emphasizing parts distribution in the replacement market in Thailand and neighboring countries. In FY2019 (started in April 2019), the company aims for THB 1 billion. Some 70% of annual revenue of the company comes from Thailand, with the remainder from Cambodia, Laos, Myanmar, Vietnam and other countries. Those countries have immense potential for Aisin, especially the replacement markets because many cars in those countries are imported from China, so the replacement market will become more competitive as new cars come onto the roads. (From an article of Bangkok Post on May 15, 2019)

Planned Capital Investments

-The planned budget for capital investments in the year ending in March 2021 is undecided because of COVID19.