TAKATA CORPORATION Business Report FY2007
Business Highlights
Financial
overview
<Sales by product>
Seat belt products
-Sales increased in Europe and Asia due to an increased number of new orders, but this was offset by a decline in sales in Japan and the Americas. Total sales stood at 150,716 million yen, down 1.4% year-on-year.
Air bag products
-Sales remained strong thanks to active marketing of curtain air bags and side air bags in the Americas, an improvement in the rate of air bag installation and market expansion in Asia. Sales in Japan and Europe were also strong. As a result, sales were up significantly, to 226,994 million yen, an 11.1% increase on the previous fiscal year.
Others
-Sales of steering systems have been strong in all regions, but total sales declined 4.5% to 138,145 million yen, affected by sluggish sales of trim products in the Americas.
Trends in Japan
-Arita plant in Saga Prefecture was completed in December 2007. This plant was established to promote internal production and high-speed integrated production of major stamped parts.
Trends outside Japan
-The Company increased production capacity at its Freiberg plant to optimize and improve efficiency of inflator production in Europe
-Established Takata India Private Limited in India.
>>>See Investment for more details
Business development
(1) Marketing in mature markets to introduce sophisticated products
(2) Active investment to boost production in Asia and other developing markets
(3) R&D investment to expand global business, and fostering of local technical
human resources in developing markets
(4) Active M&A to develop future business
<Initiatives in Asia>
China: Strengthening production and sales
-Expanding production to encompass full product range
(commencing local production of inflators in addition to SB, AB, SW
production)
-Strengthening local business through enhanced R&D program
Korea: Developing local production
-Currently building airbag plant to join existing seat belt plant
-Enhancing R&D program to grow local business
India: Preparing to establish new plant
-Developing fully fledged local production system
(Constructing new plant for commissioning in 2009)
Thailand: Expanding production structure
-Boosting production across full product range with new plant
-Enhancing response to Eco-car program
The Philippines: Increasing production
-Boosting capacity with commissioning of second plant
Asia and Oceania: Working to expand sales
| (in million JPY) | FY2007 | FY2006 | Rate
of Change (%) |
Factors |
| Overall | ||||
| Sales | 515,857 | 501,866 | 2.8 | Sales in Europe and Asia were strong, while sales in Japan leveled off. In North America, sales were weak in the second half of the year. Sales of airbags were brisk in all regions. |
| Operating income | 36,732 | 39,641 | (8.6) | Operating income rose in Europe and Asia thanks to increased sales, but in Japan and the Americas the Company suffered a decrease in profit due to tough business conditions. |
| Ordinary income | 36,397 | 39,825 | (8.6) | Ordinary income improved in Europe and Asia, but profit decline in Japan and the Americas had a negative impact. |
| Net income | 22,878 | 23,540 | (2.8) | Net income declined because of significant reduction of the effective tax rate. |
<Sales by product>
Seat belt products
-Sales increased in Europe and Asia due to an increased number of new orders, but this was offset by a decline in sales in Japan and the Americas. Total sales stood at 150,716 million yen, down 1.4% year-on-year.
Air bag products
-Sales remained strong thanks to active marketing of curtain air bags and side air bags in the Americas, an improvement in the rate of air bag installation and market expansion in Asia. Sales in Japan and Europe were also strong. As a result, sales were up significantly, to 226,994 million yen, an 11.1% increase on the previous fiscal year.
Others
-Sales of steering systems have been strong in all regions, but total sales declined 4.5% to 138,145 million yen, affected by sluggish sales of trim products in the Americas.
Trends in Japan
-Arita plant in Saga Prefecture was completed in December 2007. This plant was established to promote internal production and high-speed integrated production of major stamped parts.
Trends outside Japan
-The Company increased production capacity at its Freiberg plant to optimize and improve efficiency of inflator production in Europe
-Established Takata India Private Limited in India.
>>>See Investment for more details
Business development
(1) Marketing in mature markets to introduce sophisticated products
(2) Active investment to boost production in Asia and other developing markets
(3) R&D investment to expand global business, and fostering of local technical
human resources in developing markets
(4) Active M&A to develop future business
<Initiatives in Asia>
China: Strengthening production and sales
-Expanding production to encompass full product range
(commencing local production of inflators in addition to SB, AB, SW
production)
-Strengthening local business through enhanced R&D program
Korea: Developing local production
-Currently building airbag plant to join existing seat belt plant
-Enhancing R&D program to grow local business
India: Preparing to establish new plant
-Developing fully fledged local production system
(Constructing new plant for commissioning in 2009)
Thailand: Expanding production structure
-Boosting production across full product range with new plant
-Enhancing response to Eco-car program
The Philippines: Increasing production
-Boosting capacity with commissioning of second plant
Asia and Oceania: Working to expand sales
R&D
R&D
expenditure
| FY2007 | FY2006 | |
| Total | 22,643 | 21,786 |
R&D structure
-The Company has R&D bases in three regions: Japan (Takata Corporation),
U.S. (TK Holdings Inc.) and Europe (Takata-Petri AG).
The Company opened TAKATA R&D Center
Berlin in April 2008, renewing existing facilities and equipment in the
development center in Berlin, Germany. The Company aims to strengthen
R&D operations and improve efficiency by consolidating R&D functions
at its two existing German R&D centers in Ulm and Aschaffenburg to
Berlin. Total investment will be 20 million euros (approx. 3,200 million
yen) .(from press release dated April 23, 2008)
R&D achievements (FY2007)
(1) Magnetic side impact sensor
This sensor was newly developed to comply with stricter requirements for
side impact safety around the world. This sensor shows improved performance
with wide scope collision detection not provided by existing technologies.
Takata will offer this sensor as a product able to deal with side impacts
from all directions and has been promoting evaluation of commercial production.
(3) Pedestrian protection airbag system (European market)
Investment Activities
Capital
investment
-The Company's capital spending in fiscal 2007 totaled 36.226 billion yen.
-Major capital investments are: a new R&D center in Berlin, Germany, a new plant in Arita-cho, Saga, Japan, and to manufacture seat belt buckles, the expansion of an air bag plant in Monclova, Mexico. The development of a new design system is also proposed.
-In Aug. 2007, the Company announced restructuring of its airbag inflator production operations in Europe as well as large expansion of its production capacity. It will concentrate its airbag inflator production, currently carried by its two local subsidiaries, to TAKATA-PETRI (Sachsen) GmbH, Sachsen, Germany. It will then invest approx. 2.1 billion yen to expand the Freiberg plant, one of TAKATA-PETRI's two plants, as a major airbag inflator plant. The expansion work is scheduled for completion in the fall of 2007, which will double the current annual production capacity to 16 million units. With this realignment, three inflator production operations of two subsidiaries will be consolidated to two operations of one company for more efficient production. The Freiberg plant, especially, will construct additional production lines to greatly increase capacity as a major inflator plant. Demands for airbags are surging in Europe as installed units per vehicle are increasing as well as small-size vehicles increasingly install them as standard equipment. The Company will therefore streamline its production operations and expand the capacity. (From an article in the Nikkan Jidosha Shimbun on Aug. 4, 2007)
Capital Investment Projects (as of March 31, 2008)
-The Company's capital spending in fiscal 2007 totaled 36.226 billion yen.
-Major capital investments are: a new R&D center in Berlin, Germany, a new plant in Arita-cho, Saga, Japan, and to manufacture seat belt buckles, the expansion of an air bag plant in Monclova, Mexico. The development of a new design system is also proposed.
-In Aug. 2007, the Company announced restructuring of its airbag inflator production operations in Europe as well as large expansion of its production capacity. It will concentrate its airbag inflator production, currently carried by its two local subsidiaries, to TAKATA-PETRI (Sachsen) GmbH, Sachsen, Germany. It will then invest approx. 2.1 billion yen to expand the Freiberg plant, one of TAKATA-PETRI's two plants, as a major airbag inflator plant. The expansion work is scheduled for completion in the fall of 2007, which will double the current annual production capacity to 16 million units. With this realignment, three inflator production operations of two subsidiaries will be consolidated to two operations of one company for more efficient production. The Freiberg plant, especially, will construct additional production lines to greatly increase capacity as a major inflator plant. Demands for airbags are surging in Europe as installed units per vehicle are increasing as well as small-size vehicles increasingly install them as standard equipment. The Company will therefore streamline its production operations and expand the capacity. (From an article in the Nikkan Jidosha Shimbun on Aug. 4, 2007)
Capital Investment Projects (as of March 31, 2008)
| Plant (City) | Equipment to be installed | Estimated amount of investment (in million JPY) |
From | To |
| Takata (Changxing) Safety Systems Co., Ltd. (Changxing, China) | Production equipment for airbags | 2,226 | Jan., 2006 | Mar., 2009 |
| TK Holdings Inc. | Production equipment for airbags | 2,400 | Dec., 2006 | Aug., 2008 |
| Takata Corporation and Takata Kyushu Corporation （Arita-cho, Saga Prefecture) | Production equipment for seat belt buckles | 4,230 | Nov., 2006 | May, 2008 |
| Takata India Private Limited (India) Incorporated | Production equipment for seat belts, airbags and steering systems | 3,500 | Jan., 2008 | Jan., 2010 |
| Takata Corp. | Design system | 3,220 | Jul., 2006 | Dec., 2009 |
| Takata-Toa Co., Ltd. | Production equipment for seat belts, airbags and steering systems | 2,255 | May, 2008 | Jan., 2009 |