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4. Clarion Co., Ltd. - Faurecia Clarion Electronics
5. Clarion Co., Ltd. - Faurecia Clarion Electronics Business Report FY ended Mar. 2018

Clarion Co., Ltd. - Faurecia Clarion Electronics Business Report FY ended Mar. 2018

Factors

-OEM sales declined due to the scandals concerning final vehicle inspections in Japan, resulting in a 18.1% year-over-year (y/y) decline.

-Sales decreased 8.1% y/y due especially to a sharp decline in the sales of passenger cars using many Clarion products in the U.S., where automotive sales decreased from the previous year. Profit, on the other hand, increased 7.6% y/y as a result of a cutback in fixed costs and a reduction in variable costs.

-Sales in Europe increased 2.3% y/y thanks to an increase in OEM sales backed by rubust car sales. Meanwhile, post-adjustment operating profit decreased 31.9% y/y.

<Asia/Australia>
ｰSegment profit increased 32.8% y/y due to an expansion of sales to Chinese national carmakers in addition to a recovery in OEM sales in Asia.

Contracts

Audio Navigation
-The company's audio navigation system has been adopted for Nissan Motor Co., Ltd.'s new Infiniti QX50 luxury midsize SUV. The adopted audio navigation system was developed for the Infiniti QX50's new power supply system that realizes functions like emergency calls. Clarion's subsidiary, Electronica Clarion, S.A. de C.V., supplies the new system for the model, which is produced at COMPAS, a joint venture plant between Nissan and Daimler AG in Mexico. The subsidiary expanded its supply capacity by installing audio navigation system production lines designed for the Infiniti QX50. (From an article in the Nikkan Jidosha Shimbun on March 15, 2018)

Electronic Control Unit (ECU) for automatic parking and navigation system
ｰThe electronic control unit (ECU) for automatic parking and navigation system have been adopted for the all-new Nissan Leaf electric vehicle (EV) released this October. The ECU has realized high-precision perception of parking spaces through combined processing of image recognition technology and sonar signals within the ECU. The image recognition technology was developed jointly by Clarion and Nissan based on the Around View Monitor technology. The navigation system adopts a high-definition VGA 7-inch wide display and a touch panel, allowing easy operation like a smartphone. It features an EV support system that displays information including charging stations and estimated reachable areas, which is updated automatically. (From an article in the Nikkan Jidosha Shimbun on October 16, 2017)

New Multimedia Operating System
ｰThe New multimedia operating system for tour buses has been adopted for Hino Motors, Ltd. and Isuzu Motors Limited's large tour buses. Clarion's full digital sound systems have also been adopted as standard equipment for the first time. The new multimedia operating system offers functions like audio visual, microphone amplification, terrestrial digital TV, radio, and navigation functions, and is centrally operated from a cockpit touch panel. The system can be connected up to 3 cameras, and drivers can operate rear and side safety cameras and other devices from a cockpit monitor. From the tour guide seat, a guide can operate audio, microphones and other functions other than navigation. Passengers can display tour data and photos stored in USB memories at their seat monitors. (From an article in the Nikkan Jidosha Shimbun on July 20, 2017)

ｰThe company announces that it developed a new operation system to centralize plural functions. This new system is supplied for Hino “Selega” and Isuzu “GALA”, and is equipped with the large buses manufactured by J-BUS Ltd. The launch date is July 3, 2017.
-Separately placed functions such as AV, microphone amplifier, terrestrial digital broadcasting, radio and navigation, are centralized into one unit, which can save space.
-Centralized touch panel of driver’s monitor improves operability.
-Function to connect at maximum 3 cameras makes it possible to operate cameras which support safety confirmation of rear and sides by using driver’s monitor.
-Clarion’s original Full Digital Sound System is a standard equipment for the first time.
(From a press release on June 28, 2017)

SurroundEye3+1
ｰThe company developed "SurroundEye3+1”, a camera system assisting trailer’s safety driving. This system is supplied to Hanamidai Auto for its ultralow-floor dump trailer (on sale in June 2017) as standard equipment. "SurroundEye” is an in-vehicle camera system which provides a bird's-eye-view display of the vehicle’s surrounding information by using 4 cameras equipped with front, rear, left and right sides of the body. "SurroundEye3+1” is an improvement version of "SurroundEye”, and covers trailers’ dead angle which cannot be covered by side mirrors and side cameras. 3 cameras are equipped with left, right and rear sides of the body, and drivers can equip the rest 1 camera (+1) with any side drivers choose. (From a press release on May 19, 2017)

Business Development

-The company will enhance business capabilities in Russia targeting automakers. Specifically, the company will double sales of telematics communication units (TCUs) used in emergency call systems for vehicles. The call systems are to be supplied to Ford Motor Company for its vehicles built in Russia by the end of March 2018. Taking advantage of the Japanese Ministry of Economy, Trade and Industry's support program, the company will train Russian engineers in Japan with the aim of sharing the concepts of manufacturing and quality improvement with Russian companies to which it outsources final assembly of TCUs. While meeting automakers' demand for local procurement, Clarion intends to expand its business for safety equipment including TCUs and vehicle surveillance cameras. (From an article in the Nikkan Jidosha Shimbun on June 28, 2017)

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

Mid-Term Busienss Strategies

Under the policy to "achieve growth in the global market as a car information system solution provider," the Company aims to attain in the fiscal year ending in March 2021:
Sales revenues of JPY 200 billion or higher
Operating profit after inter-company write-off of 5% or higher

1. Business portfolio innovation and acceleration of shifts of businesses
The Company will start business restructuring to build CASE capabilities, aiming at contributing to the mobility society by creating comfortable vehicle interior, providing seamless information, achieving operation management and developing safety technologies.

２. Busienss expansion in the global market
Focus on SI/connected in Japan, Europe and the U.S.
Focus on Audio/IVI in China, Asia and Latin America

３. Selection, concentration and rationalization of management resources
Strengthening its development center in Xiamen and expanding autonomous parking business in China

R&D Activities

(1) Development of integrated HMI devices for cockpits
-The Company seamlessly integrates safety technologies including onboard information systems and cameras, and cloud services focused on Smart Access to cope with the changes in the automotive industry.
For larger onboard information system screens, the Company developed the QuadView HMI that splits the car navigation screen into four. The NXV977D car navigation featuring the QuadView was commercialized in 2017. The NXV977D is mounted on the driver's seat. The Company is advancing the development InfoSeat HMI using vibration devices, speakers and microphones on the driver's seat; operation technologies using gestures; and driver monitoring technologies.

(2) Expansion of Smart Access, a cloud-based telematics service
-The Company continued expanding the Smart Access, its unique cloud-based information network service established and operated with the cooperation of Hitachi Group.
-In FY2017, the Company developed the SAFE-DR, a cloud-based vehicle management solution capable of managing driver recorder images.

(3) Technology and product development in the Safety and Information Business
Driver assistance technologies using image processing ECUs and cameras

-The Company aims to commercialize an autonomous parking system by adding high-precision object detection technologies using a single-lens camera and high-precision recognition technologies using SurroundEye parking assist camera system to transmit image signals digitally to image recognition and control linkage technologies.

ｰIn November 2017, the Company started shipping the world's first autonomous parking systems applying camera sonar fusion technologies since its potential customers.

-The Company started the development for mass-scale commercialization in the fiscal year ending in March 2016. At the Consumer Electronics Show (CES) 2017, the Company displayed a remote parking system jointly developed with Hitachi Automotive Systems, Ltd.

ｰHitachi Automotive Systems, Ltd. and Clarion Co., Ltd. (Clarion) announced that they have developed Park-by-Memory autonomous parking technology that memorizes the environment surrounding users' home parking spaces. The two companies will introduce the new system to automakers, and are aiming to achieve practical use in the near future. The new technology memorizes parking environments and patterns by utilizing the bird's-eye-view Images transmitted from Clarion's SurroundEye camera systems, surrounding structure data obtained using sonar signals, and GPS positioning data. The Park-by-Memory notifies drivers that autonomous parking is available when the vehicle approaches memorized parking spaces, and drivers can just use in-vehicle buttons or smartphone applications to park the vehicle automatically. (From an article in the Nikkan Jidosha Shimbun on January 17, 2018)

ｰThe Company displayed Park-by Memory technology at the CES 2018. This technology has been started for application for commercial vehicles, and ready for global distribution.

ｰIt has developed an automotive color night vision camera for safe night driving. It will help recognize pedestrians, bicycles, vehicles, road lines, signs, and signals, and can be used for applications like alerts to drivers, automatic braking, and other vehicle control systems. The new color night vision camera has CMOS color sensors that can detect near-infrared light. It combines visible light color and near-infrared light monochrome images using the company's original image processing system, and displays color images all day. Clarion combined an electric control unit with an object recognition function, and reduced size so that it can be placed behind room mirrors. (From an article in the Nikkan Jidosha Shimbun on November 21, 2017)

In-vehicle communication technology

-To cope with the future traffic environment, a new fuction is being planned to provide safety information by way of car-to-car and car-to-infrastructure communication systems. The Company and Hitachi Group is developing C2X platform to realize the function on the car side.

ｰIn FY 2017, the Company created a U.S.-specification prototype of an European-specification platform with a LTE function to achieve high-speed communication, which was developed in FY 2016.

(4) Advanced auto-interior acoustic technology to meet diversified demand
-The Company focused on the development of its unique sound processing technology "Intelligent Tune App". So they have so far installed with new acoustic signal processing technology to control sound quality of compressed audio; reproduction capacity of heavy bass sound; sound localization of vocals; and surround feeling and beat feeling.

ｰThe Company focused on the development of InfoSeat, a new HMI featuring high sound quality of audio, using speakers mounted in the headrest and vibration devices embedded in the seat.

(5) Full digital speaker
-In the in-vehicle high-end product market, the Company added tweeters for high-resolution audio, starting sales in late June 2018.