Keihin Corporation Business Report FY2009
|(in millions of JPY)|
|FY2009||FY2008||Rate of Change
|Operating income||13,716||11,608||18.2||-Despite lower sales affecting revenue, and the continued appreciation of the yen, operating and ordinary income increased as a result of the Company rationalizing its operations and achieving quick reductions in costs.|
|Current net income||7,633||(5,625)||-||-Current net income increased because the costs to cover product warranties had already been accounted for in the previous fiscal year.|
Highlights by Region<Japan>
-While sales of automotive products for the Honda Insight, Freed, and Fit increased, thanks to government sales incentives in the form of tax credits to encourage consumers to buy eco-friendly cars, total sales in Japan decreased due to a decline in products exported to Europe and other factors.
-Sales of motorcycle and general-purpose products saw a significant decrease in those destined for export for mounting on large motorcycles.
-Sales were 132 billion 463 million yen, a year-on-year decrease of 20 billion 265 million yen.
-The North American market is on the way to recovery; however, there were some factors that negatively affected performance. These included lower sales of automotive, motorcycle and general-purpose products in the first half and negative foreign currency translation.
-Sales were 67 billion 959 million yen, a year-on-year decrease of 15 billion 242 million yen.
-Sales of automotive products increased in China and India and sales of motorcycle products increased in India and Indonesia.
-There were some factors that negatively affected performance such as decreased sales of motorcycle and general-purpose products in Taiwan and negative foreign currency translation.
-Sales were 97 billion 711 million yen, a year-on-year decrease of 5 billion 375 million yen.
-The Company will establish in December 2009 a wholly owned subsidiary in Bangkok, Thailand, which will oversee the Group's operations in Asia except China. The setup follows the formation of the Asia Division in April this year. The new unit will allow the Group to increase its operational efficiency in the region, helping it become more competitive in the growing motorcycle and vehicle markets in Asia. The new company will be called Keihin Asia Bangkok Co., Ltd. It will be capitalized at 30 million baht. (From an article in the Nikkan Jidosha Shimbun on Aug. 1, 2009)
-Thanks to government sponsored sales incentives in many countries, the market has almost bottomed out.
-There were some factors that affected performance such as lower sales and negative foreign currency translation.
-Sales were 5 billion 273 million yen, a year-on-year decrease of 2 billion 491 million yen.
Restructuring-The Company is working on establishing a flexible production structure for engine components in order to respond to fluctuating demand from its customers in terms of both product items and volume more flexibly and quickly. This project is in line with the company's decision to close its Kawasaki Plant (Kanagawa Prefecture) and Iwate Plant (Iwate Prefecture) to integrate their operations into its Kakuda Plant in Miyagi Prefecture. Taking advantage of operating several plants in the same region, The Company now aims to optimize its supply system and equalize capacity utilization rate among its production lines by flexibly assigning its employees to each facility based on actual demand levels. (From an article in the Nikkan Jidosha Shimbun on May 13, 2009)
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
Medium- and Long-term Management Policy-The Company has decided in its mid-term business plan to increase investment in development of hybrid and automotive air conditioning systems. Although the Company has experienced supplying these products as a system supplier, it has to rely on outsourcing for some of their major components, because it has no expertise in development of these products. Highlighted will be high voltage or output electric units for hybrid vehicles, and compressors and heat exchangers for car air conditioning systems. The Company is poised to reorganize its development structure to build up its own designing capabilities of such components in a bid to achieve total system optimization, while making further efforts for cost reduction and quality improvement. (From an article in the Nikkan Jidosha Shimbun on Dec. 22, 2009)
|(in millions of JPY)|
|Tochigi R&D Center
(Takanezawa Town, Tochigi Pref., Japan)
|-With system development being a key focus , the Tochigi R&D Center conducts all R&D activities, from developing and inspecting software, to conducting research and analysis using actual vehicles.
-As the main facility conducting system development, the Tochigi R&D Center focuses on expanding R&D areas based on systemization and integration as well as developing advanced technologies mainly for electronic control units (ECUs).
|Kakuda R&D Center
(Kakuda City, Miyagi Pref., Japan)
|-The Kakuda R&D Center, in aiming to develop core products that support systems, pursues performance, functionality, durability, and economy, which are elements that form the foundations to improving quality; and at the same time, it links these elements to production technology.
-It consists of an analysis building, which analyzes data; a durability building, which conducts vibration tests and measures heat resistance; and a chassis building, which uses actual motorcycles and vehicles to evaluate products in terms of their value as system components.
R&D ActivitiesFour wheel vehicle business
-The Company developed and commercialized parts for engine fuel supply systems and transmission hydraulic control systems.
-The Company developed and commercialized systems that are compatible with alternative fuels.
-The Company developed and commercialized high-performance small air-conditioning systems.
-The Company developed low-cost high-efficiency next model scroll compressors.
-The Company developed and commercialized electronic engine control units.
-The Company developed and commercialized control units for hybrid cars and power modules for driving a motor.
-The Company is steadily enhancing its R&D structure for developing power control units (PCUs) for electric drive systems used in hybrid vehicles. The Company started developing and producing such PCUs in the 1990s to support Honda Motor's hybrid plans. The Company now has ten times as many researchers to engage in the segment compared with the level of 1999, when Honda launched its first hybrid model, the Insight. Since 2005, when the hybrid version of the Civic, Honda's second hybrid, was released, the number has doubled. With this move, The Company has allocated a greater amount of resources in hybrid PCUs for accelerating commercialization of the new technology. The Company says it intends to continue expanding the number of researchers in the field so as to ensure its edge over its competitors in the electric drive technology as early as possible.(From an article in the Nikkan Jidosha Shimbun on Aug. 20, 2009)
|(in millions of JPY)|
|Motorcycle/general-purpose production facilities||2,376||4,688||4,902|
|Four-wheeled vehicle production facilities||3,726||7,165||3,777|
|Electronic-control-product production facilities||-||-||3,740|
|Air conditioning production facilities||-||-||1,960|
|Research and development facilities||738||1,268||1,516|
Investment in Japan-The Company has launched a production expansion project for power control units (PCUs), which determine the performances of powertrain systems and batteries of hybrid vehicles. The expansion is based on Honda Motor's plan to step up production of the popular Insight hybrid, in which Keihin's PCUs are used. Keihin is producing these PCUs at its Suzuka Plant in Mie Prefecture based on the cell production system that it introduced for the first time. The Company will increase its supply capacity by setting up additional cells. Compared with conventional production systems, the cell production method offers superior cost efficiency, requiring less cost for boosting capacity. (From an article in the Nikkan Jidosha Shimbun on Aug. 5, 2009)
Amount of Capital Investment
|Business segment||Type of facility||Planned total investment
(in million JPY)
|Starting month||Planned completion|
|Kakuda 2nd Plant
(Miyagi Pref., Japan)
|Four wheeled vehicle business||Production facilities etc.||510||Apr. 2010||Mar. 2011|
(Miyagi Pref., Japan)
|Four wheeled vehicle business||Production facilities etc.||1,383||Apr. 2010||Mar. 2011|
|Tochigi R&D Center
(Tochigi Pref., Japan)
|R&D||R&D facilities||1,367||Apr. 2010||Mar. 2011|
|Keihin IPT Mfg. Inc.
|Four wheeled vehicle business||Production facilities etc.||1,392||Apr. 2010||Mar. 2011|
|Dongguan Keihin Engine Management System Co., Ltd.
|Four wheeled vehicle business||Production facilities etc.||1,304||Jan. 2010||Dec. 2010|