Clarion Co., Ltd. Business Report FY ended Mar. 2017

Financial Overview

(in million JPY)
FY ended Mar. 2017 FY ended Mar. 2016 Rate of change (%) Factors
Sales 194,841 216,227 (9.9) -Sales significantly fell year-over-year (y/y) because of the effect of negative currency translation due to the high valuation of the yen, even though OEM sales increased in the Americas and China.
Operating income 11,367 11,551 (1.6) -Operating income fell due to lower sales and other factors, in spite of the fact that the Company controlled operating costs by implementing effective cost-cutting initiatives.
Profit before tax 10,992 10,495 4.7 -
Profit for the year attributable to owners of the parent 7,727 7,743 (0.2) -


-While sales of safety and information systems increased, overall sales decreased by 16.3% y/y due to lower sales of conventional products.
-Income increased 32.1% y/y due to effective cost-cutting initiatives and higher operating ratios because of increased production volumes of products for North America.

-Sales decreased 3.5% y/y and income decreased 25.5% y/y because of the effect of negative currency translation due to the strong valuation of the yen, in spite of the fact that new-vehicle sales in the USA were robust and sales volumes of products sold to the OEM market increased.

-Even though sales increased y/y on a local currency basis, overall sales and income decreased 3.7% and 61.7%, respectively, due to the effect of negative currency translation because of the high value of the yen.

-Even though OEM sales increased in China, sales and income were lower 14.3% and 12.3% y/y, respectively, due to lower OEM sales in Thailand and the effect of negative currency translation because of the high valuation of the yen.


-The Company announced that it has developed a new SurroundEye parking assist camera system for the Volkswagen Golf and Golf Variant sold in Japan. The SurroundEye system, which was jointly developed with Volkswagen Group Japan (VGJ), was released as optional equipment for these models. By utilizing four cameras mounted around the vehicle, the new SurroundEye creates and displays the vehicle's surroundings images as if viewed from directly above. When the driver puts the car in reverse, the monitor of Volkswagen's infotainment systems (Discover Pro or Composition Media) shows the vehicle's surroundings with four camera views, which allows drivers to park their vehicles in perpendicular or parallel parking space more easily. Combined with the Optical Parking System, standard equipment on some Volkswagen models, the SurroundEye improves safety by providing visual displays and audible warnings utilizing sensor technologies. (From an article in the Nikkan Jidosha Shimbun on May 18, 2016)

Business Development in China

-The Company announced that it will establish a joint venture (JV) in May 2016 for developing intelligent terminal software in China with Wuhan KOTEI Informatics Co., Ltd. (KOTEI), a software developer for navigation systems. Clarion is looking to respond to the needs of the global market speedily by finding new customers and improving its product planning, while at the same time strengthening its software development organization in China. The new JV will begin operations in June. It will be headquartered in Wuhan City, Hubei Province and capitalized at CNY 10 million (JPY 167 million). KOTEI's stake will be 75% and Clarion will own 25%. The new JV will have 113 employees at the time of its establishment. KOTEI develops software for navigation systems as well as software and hardware for embedded automotive and communication systems, and provides authoring solutions for navigation system map data. Clarion and KOTEI have been cooperating in the development of software for in-vehicle devices. (From an article in the Nikkan Jidosha Shimbun on May 25, 2016)

Outlook for FY ending Mar. 2018

(in million JPY)
FY ending Mar. 2018
FY ended Mar. 2017
(Actual Results)
Rate of Change
Revenue 200,000 194,841 2.6
Operating income 10,500 11,241 (6.6)
Profit before tax 10,000 10,992 (9.0)
Net income 7,000 7,727 (9.4)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

(in million PY)
FY ended Mar. 2017 FY ended Mar. 2016 FY ended Mar. 2015
Overall 17,338 19,509 17,536

R&D Activities

(1) Developed integrated HMI devices for cockpits
-The Company is providing its customers a high level of product value by connecting and integrating HMI devices designed for cockpits by making use of its strong development capabilities gained through many years of developing HMI software and hardware for the OEM market, acoustics technology focused on audio systems, design capabilities developed through user experiences, valuable experience gained from developing application services at the consumer-products business, and R&D capabilities in core technologies such next-generation HMI systems.

(2) Development of new safety and information technologies
Enhanced driver assistance function with image processing technology and cameras
-The Company has been working on putting automated parking technology into practical use by leveraging image recognition and vehicle control technology, utilizing an on-board camera that improves object detection, and adding improved image processing functions with the SurroundEye digital image transmission system.

-The Company improved its safety systems after collecting customers feedback, and began full scale development towards mass production in FY ended March 2016. Anticipating further requirements for more advanced systems, it is working on introducing a more sophisticated route guidance system by use of multiple sensors, expanding detection range, and achieving integrated control with on-board communication systems.

-SurroundEye is being adopted also for commercial vehicles, and is targeted at the global market.

-In the area of autonomous vehicles, which are expected to be introduced around 2020, the Company is developing technologies like microprocessor units (MPUs) for accurate position detection, advanced image recognition systems, and on-board communication systems through collaboration with the Hitachi Group.

C2X Communication Technology
-In the fall of 2015, the Company began full-scale production and supply of its TCU modules, which provide increased driving comfort, safety, and security. The modules can control air conditioners before drivers get in a car, and also support emergency call systems in Russia.

-In collaboration with the Hitachi Group, the Company is developing C2X platform for car-to-car and car-to-infrastructure communication systems for next-generation vehicles to provide improved driving safety.

(3) Advanced auto-interior acoustics technology to meet diversified demand
-The Company developed "Intelligent Tune App" automatic sound space compensation smartphone application in June 2015.

(4) Full digital speaker
-At the end of 2015, the Company developed high-power LSI that supports full digital sound technology for automotive applications. The technology was introduced into a high-resolution car audio system released in April 2016.

(5) Others
-The Company has developed a new car navigation system that can split the display into 4 screens and will bring it to market during fiscal year 2017. Users can adjust the size of each split screen by touching the screen with their fingertips. Multiple functions such as navigation and menu setting are displayed in one screen to allow desired functions to be selected intuitively. The system also provides safety features such as making related screens larger automatically when an in-vehicle camera detects an approaching vehicle. Clarion will market this system as a new human-machine interface that offers total control of diverse information. (From an article in the Nikkan Jidosha Shimbun on January 19, 2017)

-Hitachi Automotive Systems, Ltd., and the Company announced the joint development of a remote parking system that automatically performs parallel and perpendicular parking as well as garage parking and exit from outside the vehicle through remote control using smartphones. The newly-developed remote parking system is an automatic parking system that combines Clarion's SurroundEye camera monitoring system with Hitachi Automotive Systems' vehicle control units and steering and brake actuator control technology to park a vehicle by remote control using a smartphone. (From a press release on December 22, 2016)

-The Company has developed a new seat system that alerts drivers to the surroundings of their vehicles through vibration and audio prompts. Speakers installed in the driver seat are activated when sensors detected imminent danger from situations such as the approach of other vehicles and warn the driver. Clarion intends to propose the new seat to automakers and seat manufacturers as one advanced driver assistance system for ensuring the safety of autonomous vehicles. (From an article in the Nikkan Jidosha Shimbun on October 6, 2016)

Technology Licensed-in Agreement

(As of Mar. 31, 2017)
Partner Country Outline of Licensing Agreement Contract period
Discovision Associates U.S. Licensed patent on manufacturing optical disc players

Dec. 1, 1994
to the patent expiry date

Vehicle Information and Communication System Center Japan License on the use of VICS technical information Nov. 28, 1995 -
expiry date agreed by two parties
Google Inc. U.S. License on the use of voice-recognition and retrieval technology Sep. 1, 2016
- Aug. 31, 2019

Capital Expenditure

(in million JPY)
FY ended Mar. 2017 FY ended Mar. 2016 FY ended Mar. 2015
Japan 1,549 1,527 1,319
Americas 761 547 782
Europe 258 374 151
Asia, Australia 1,295 1,439 2,746
Total 3,865 3,888 4,999

Investment in Japan

-The Company announced that it has established a new laboratory at its Tohoku Office (Koriyama City, Fukushima Prefecture) that can be used for autonomous driving technology development. Clarion is aiming to strengthen its safety and information system business. The new laboratory will be used for calibration technology development required for image recognition and other vehicle periphery recognition functions, and can accommodate a large bus. (From an article in the Nikkan Jidosha Shimbun on February 20, 2017)