Financial overview

(in million JPY)

-	FY2008	FY2007	Rate of Change (%)	Factors
Overall
Sales	385,499	515,857	(25.3)	- Sales and income decreased, affected by sharp decline in automobile production as a result of the worldwide slump in automobile sales. The Company experienced a tougher situation than ever before.
Operating income	2,845	36,732	(92.3)
Ordinary income	369	36,397	(99.0)
Net income	(7,319)	22,878	-

<Sales by product>
Seat belt products
- Sales decreased in all markets, especially in the USA, which was directly hit by the automobile industry slump. In Asia and Europe, sales declined in the second half, while the Company received a lot of orders in the first half.

Air bag products
-Sales decreased in the Americas, affected by sluggish sales of the Big Three. Sales also decreased in Japan and Europe. In Asia, sales softened.

Others
- While sales of steering and trim products were steady in the Americas and Europe in the first half, they declined in the second half. Sales also decreased in Japan and Asia.


Trends outside Japan
- In emerging countries, which are expected to grow in the future, the Company continued to make investment focusing on the future, including a production launch at its plant in India, an operational start at its inflator plant in China, and expansion of a plant in Thailand, etc.

>>>See Investment for more details

Acquisitions
TK Holdings Inc. (one of the Company's group company) has purchased the assets of the former Assistware division of Cognex for an undisclosed sum. The acquisition enhances the Company's safety technology in the area of lane departure warning (LDW) systems. The Company had been working with Cognex to develop an LDW product for the heavy truck market when both companies realized the technology would be better delivered through the Company. TK Holdings, Inc. and Cognex worked together to complete the deal. (From a press release on Jul 3, 2008)

Joint Ventures
The Company has entered into a joint venture agreement with Indian supplier Anand Automotive Systems to manufacture airbags, seatbelts and steering wheels in India for the Indian OEMs. The joint venture company, Takata India Private Limited (Takata India), will be majority owned by the Company. In June 2007 the Company established Takata India as a wholly owned subsidiary in India. Subsequently, the Company began the construction of a new plant in Chennai, India and is also planning to build another domestic plant in Neemrana, near Delhi. (From a press release on Jan 5, 2009)

R&D Expenditure

(in million JPY)

-	FY2008	FY2007	FY2006
Total	18,781	22,643	21,786

R&D Structure
-The Company has R&D bases in three regions: Japan (Takata Corporation), US (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)

Research and Development Activities
The Company conducted investigation, research and development activities as well as development of devices that consist of protection systems including inflators and electronics, using different approaches for collision configuration or system function, such as passenger protection systems against frontal collision, side collision and rollover, pedestrian protection systems, motor cycle passenger protection systems, collision avoidance systems and driver support systems. The Company also conducted research and development activities on child restraint systems.

R&D achievements
- One of its new products that started mass production in this fiscal year is a gas generating device (inflator) for airbag called X Series. This product succeeded in reducing size and weight, to become the lightest in the world.

Capital Investment

(in million JPY)

-	FY2008	FY2007	FY2006
Total	19,129	36,226	22,263

- Asset removal loss of 189 million yen resulted from a facilities update focusing on machine equipment.

- The Company invested mainly in establishment of plants for seat belts, airbags and steering in Chennai and Delhi in India.

Capital Investment Projects

Plant (City)	Equipment to be installed	Estimated amount of investment (in million JPY)	From	To
Takata India Private Limited (India) Incorporated	Production equipment for seat belts, airbags and steering systems	3,500	Jan., 2008	Jan., 2010