Financial overview

(in million JPY)	FY2006	FY2005	Rate of Change(%)	Factors
Overall
Sales	175,003	156,693	11.7%	Sales increased mainly due to brisk sales of three major products: fuel pump modules, canisters, and throttle bodies, thanks to increased production and active marketing efforts in and outside Japan
Operating Profit	7,997	7,347	8.8%	Profit grew because of sales increases and rationalization initiatives
Net income	3,285	4,029	(18.5%)	Net income was negatively impacted by recording an extraordinary loss for reserves needed to cover products that are recalled from the market
Automotive Component Division
Sales	167,627	149,404	12.2%	-

Sales by region

(in million JPY)	FY2006	FY2005	Rate of Change(%)	Factors
Japan	129,351	119,806	8.0%	Increase in sales of EFI products such as throttle bodies
North America	23,769	20,451	16.2%	Increase in sales of throttle bodies and fuel pump modules
Europe	13,908	10,415	37.1%	Strong sales of fuel pumps and module throttle bodies
Asia	21,021	14,888	30.7%	Strong sales of fuel pumps and module throttle bodies

The Company focused on the following points: (1) Enhancing capacity to make higher quality products; (2) Strengthening production sites overseas; (3) Developing unique, one-of-a-kind products

(1) Enhancing capacity to make higher quality products:  
Seeking to create higher quality products based on CF (customer first) activities. Enhancing productivity by completely eliminating waste and improving the operating ratio at facilities.   

(2)Strengthening production sites overseas:

China
-In April 2006, the Company started producing throttle bodies and engine valves at Aisan (Foshan) Auto Parts Co., Ltd., its production site in the Guangzhou area. 

-In November 2006, the Company merged Tianjin Aisan Automobile Parts Co., Ltd., its production subsidiary in the Tianjin area, into Aisan (Tianjin) Auto Parts Co., Ltd. to improve business efficiency.

-The Company established a sales subsidiary, Aisan Corporation Guangzhou Co., Ltd., (located in Guangzhou), which started operations in November 2006. 

Strengthened business in China in response to the rapid growth of the market

South East Asia
-The Company built a second plant at P.T. Aisan Nasmoco Industri, the Company's production site in Indonesia, and started production of aluminum die-cast products in-house in December 2006. At present the Company is building a seamless production system that includes casting up to processing and assembly. 

Europe
-In March 2007, the Company dissolved a partnership with Bitron and as a result made Aisan Bitron Europe S.A. in France its wholly owned subsidiary. The Company will continue to reform of its European business to improve profitability of  Aisan Bitron Europe, reviewing the production structure of the group, including the one in the Czech Republic. 

(3)Developing unique, one-of-a-kind products
>>>See R&D

R&D

In FY2006, the Company made capital investments of 13,674 million yen.

- Japan: Capital investments were used for new products, production increases, and improving productivity and quality.
- Southeast Asia: Capital investments were used to set up in-house production of aluminum die-cast products so as to establish a seamless production system that includes casting, up to processing and assembly . 
- China: Capital investments were used to launch operations at Aisan (Foshan) Auto Parts Co., Ltd., the Company's production subsidiary in China. 

Out of the total amount, capital investment for throttle bodies, fuel pump modules, and canisters (strategic core products) was 4,968 million yen  

Capital investment by production facility for new products and production increases related to the three strategic products were as follows:
- 1,607 million yen at Aisan Industry
- 980 million yen at Hyundam Industrial Co., Ltd.(Korea)
- 543 million yen at Franklin Precision Industry, Inc. (USA)
- 419 million yen at Aisan Bitron Czech s.r.o. (Czech Republic)

Investment into engine valves, its mainline, totaled 3,149 million yen. 
By Company:
- Aisan: 2,572 million yen
- Aisan (Foshan) Auto Parts Co., Ltd.: 577 million yen

New Facilities

	Type of facility	Expected amount  ( in million JPY)	Started	Expected  Completion
Anjo Plant (Aichi, Japan)	Manufacturing engine valves	1,211	Jan. 2007	Mar. 2008
	Manufacturing throttle bodies	457	Nov. 2006	Mar. 2008
Toyota Plant (Aichi, Japan)	Manufacturing fuel pump modules	708	Jul. 2006	Mar. 2008
Franklin Precision Industry Inc. (Kentucky, USA)	Manufacturing throttle bodies	587	Jul. 2006	Dec. 2007
Aisan Bitron Louny s.r.o. (Louny, Czech Republic)	Manufacturing throttle bodies	436	Dec. 2007	Dec. 2007
	Manufacturing die-cast products	606	Dec. 2007	Dec. 2007
Aisan (Tianjin) Auto Parts Co., Ltd. (Tianjin, China)	Manufacturing fuel pump modules	655	Apr. 2006	Oct. 2007
Aisan (Foshan) Auto parts Co., Ltd. (Foshan, China)	Manufacturing engine valves	917	Jul. 2006	Dec. 2007