Financial overview

( in millions of JPY )

-	FY2007	FY2006	R. C. (%)	Factors
Overall
Sales	283,370	261,897	8.2	- Sales increased year-on-year, thanks to greater demand from the booming markets of Brazil and China. The rise was also attributed to gains from currency translation.
Operating income	13,663	17,698	(22.8)	Profits dropped year-on-year due to greater costs incurred, especially for the following projects: - launching new operations and increasing production volume at existing plants; -initiating production of new products for use in new vehicle models; - transferring some production lines from one plant to others
Ordinary profit	14,254	18,766	(24.0)
Current net income	6,597	9,083	(27.4)
Automotive components
Sales	278,195	255,985	8.7	-
Operating income	13,006	16,566	(21.5)	-

( R.C. : Rate of Change )

Highlights by region (Automotive business)
Japan
- Buoyed by new vehicle launches, sales of power steering systems and other products increased.


The Americas
<U.S.A.>
- Sales decreased, reflecting the slumping automotive market in the country.

<Canada>
- Sales at Showa Canada rose due to its manufacturing hydraulic pumps for the Company's U.S. subsidiary on an outsourcing basis. One of the other contributing factors was greater sales of propeller shafts, thanks to increased production volume of all-wheel-drive vehicles at its major customer. Revenues dropped, however, in the area of suspension sub-assemblies.


Europe
<U.K.>
- Following new vehicle launches, sales of power steering systems and other components grew.

Asia
<Indonesia>
- Revenues increased year-on-year, thanks to greater sales of shock absorbers. The rise was also due to the local facility's having launched production and sales of gears and related products.

<China>
- Sales of shock absorbers and power steering systems rose because of the growing Chinese automotive industry.

In million yen	FY2007	FY2006	FY 2005
Automobile parts	6,895	6,738	7,200
Others	220	223	233
Total	7,116	6,962	7,433

Automobile parts business:
- Promoted cost reduction initiatives such as product revisions that improve the competitiveness of existing products.
- Reinforced its R&D function engaged in developing fundamental technology on examining and determining suitability of materials, for example, in order to build up its capabilities to procure products locally at global sites.

R&D activities
-The Company is building a new development ward at the Tochigi R&D Center for Automotive Parts, which is dedicated to the company's projects involved in the development of power steering systems and drivetrain components. With this expansion plan the Company is aiming at upgrading its competence in product development and reinforcing its support system for the group facilities overseas. Construction of the new ward, a three-story building with a total floor space of about 3,800 square meters, has already been commissioned and is scheduled to be completed in January 2009. (From a press release on Feb. 1, 2008)

In million yen	FY2007	FY2006	FY 2005
Automobile parts	20,791	17,214	10,436
Others	1,148	162	1,310
Total	21,940	17,377	11,747
In common	35	23	29
Consolidated	21,975	17,400	11,777

Domestic Investment
-The Company announced that it will add a new plant dedicated to the production of electric power steerings (EPS) and components in Shizuoka prefecture, investing approximately 7.3 billion yen. The construction of the additional plant will allow the company to enhance its production capability to respond to anticipated growth in global demand for electric power steerings. The company also intends to set up efficient global production system by strengthening its domestic production base. The new plant will be constructed at a 70,554-square-meter site in Gotenba-shi, Shizuoka prefecture. The Company plans to spend 7.34 billion yen on the project, which is to complete in October 2008 in time for the operational launch in December 2008. (From an article in the Nikkan Jidosha Shimbun on Apr. 1, 2008)

< New facilities >
-The total amount of capital investment planned for fiscal year 2007, which ended March, 2008, was 35,584 million yen. The following outlines major construction projects for new facilities.

	Location	Type of facility	Planned investment (total) (million JPY)	Construction start month	Planned completion
Saitama Plant	Gyoda City, Saitama, Japan	Production facilities for automobile parts	4,018	Apr., 2007	Mar.,2009
Gotenba Plant	Gotenba, Shizuoka, Japan	Production facilities for automobile parts	11,840	July, 2007	Mar.,2009
Asaba Plant	Fukuroi, Shizuoka, Japan	Production facilities for automobile, motorcycle parts	1,674	Apr., 2007	Mar.,2009
American Showa, Inc. Sunbury Factory	Ohio, USA	Production facilities for automobile, motorcycle parts	3,794	July, 2007	Dec., 2008
American Showa, Inc. Blanchester Factory	Ohio, USA	Production facilities for automobile parts	3,007	Mar., 2008	Dec., 2008
Showa Canada Inc.	Ontario, Canada	Production facilities for automobile parts	1,406	Mar., 2007	Aug., 2008
Showa Autoparts (Thailand) Co., Ltd.	Chonburi, Thailand	Production facilities for automobile parts	1,152	July, 2007	Dec., 2008