Sanden Corp. Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of Change (%) Factors
Sales 194,696 216,690 (10.1) -
Operating Income 5,203 (6,198) - -
Ordinary Income 6,630 (9,457) - -
Net Income 4,410 (30,838) - -
Automotive systems business
Sales 129,986 145,829 (10.9) -Sales grew more than expected in emerging countries such as China and India because their automobile markets quickly recovered from the economic downturn. Sales in the Company's major markets, Europe and the Americas, also improved in the third and fourth quarters. However, the loss incurred in the first and second quarters was too big to offset the gains achieved in the third and fourth quarters. As a result, sales declined overall for the year.
Operating Income 6,824 2,686 154.1 -


-The Company has begun supplying electric compressors for automotive air conditioners to Daimler AG for all Mercedes-Benz S400 Hybrid models. The compressors will be produced in Japan. (From a press release on Jun 30, 2009)

Recent Developments Outside Japan

-Sanden (Suzhou) Precision Parts Co., Ltd. (SSP) will start marketing die-cast components used in compressors for automotive air conditioners at the end of Oct. 2009. The Company has begun conducting mass production trials since Sep. 2009 and is aiming at achieving the capacity to produce more than two million units in FY2010. The Company makes compressors for automotive air conditioners at two separate joint ventures in Shanghai, China, and, with their combined production volume, the Company currently maintains approx. 50% market share in the Chinese passenger car segment. SSP plans to supply its die-cast parts to these two functions, among other customers. (From a press release on Oct. 22, 2009)

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


R&D Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Group 5,440 7,019 6,866
Automotive systems business 3,676 3,974 4,502

R&D Activities

Automotive systems business
-The Company strengthened its cooperation with Sanden's technical centers in Japan and Germany in terms of developing compressors and car air-conditioners compatible with new types of vehicles such as hybrid, plug-in hybrid, and electric vehicles. The Company also cooperated with the R&D Department in France.

-The company developed electric compressors, hybrid compressors, compressors with integrated inverters and compact/light automotive heat exchangers in its efforts at developing eco-friendly, next-generation products and energy-saving technology, which are the two most significant targets in the automotive business.

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Group 5,900 12,900 14,300
Automotive systems business 4,900 10,300 N.A.
-Japan 1,900 6,800 7,600
-Europe 900 1,800 3,400
-North America 600 300 100
-Asia 1,400 1,400 700

-The Company made capital investments mainly to launch production of parts; expand its production capacity; and rationalize, maintain, and upgrade its facilities.

Planned Capital Investments

-In the fiscal year ending March 2011, the Company plans to invest a total of 7,000 million yen to make capital improvements, which will mainly be targeted on launching in-house production of components, increasing its production capacity, and expanding and upgrading its facilities. Of the total, 1,700 million yen will be spent in Europe on its automotive equipment business, 600 million yen in North America, 1,800 million yen in Asia (excluding Japan), and 1,700 million yen in Japan. Of the 1,800 million yen targeted for Asia, 1,100-million yen will be used to expand the casting facilities and to add machining facilities at Sanden (Suzhou) Precision Parts Co., Ltd., which plans to gain a more competitive edge and expand its business in China.