Imasen Electric Industrial Co., Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of change (%) Factors
Sales 74,012 86,936 (14.9) -
Operating income 5,185 3,687 40.6 -
Ordinary income 5,281 2,759 91.4 -
Current net income 3,064 1,505 103.5 -
Automotive components related business
Sales 69,994 81,615 (14.2)

-Sales decreased year-on-year because automobile production volume on the whole was lower than that of the previous year, although there were exceptions seen in some regions.

Operating income 5,056 3,346 51.1 -Operating income increased due to the Company's successful efforts to reduce fixed costs.


<By customer>
-The volume of business won from the Honda Motor Group, the Company's largest customer, decreased year-on-year. However, the rate of reduction stayed at the average level. Although the volume of business won in the USA substantially decreased, the Company had strong orders in China.
-The Nissan Group enjoyed strong sales of cars marketed in China, for which the Company supplied its products. In addition, there was a recovery in the volume of vehicles Nissan produced in Japan for export. As a result, the Nissan Group has become the Company's second largest customer in Japan, surpassing the Mitsubishi Group.
-Although sales to the Mitsubishi Motor Group substantially declined year-on-year, they have begun to pick up.

<By product>
-Although the volume of sales of seat adjusters, the Company's mainstay products, was lower year-on-year, the rate of drop was still not as low as the average reduction rate thanks to receiving more orders from the Nissan Motor Group. As a result, seat adjusters constituted a greater portion of the Company's total sales in FY2009 than ever.
-Thanks to new orders for electronic units from Mazda, the Relay became the only product that the Company sold more volume in FY2009 than the previous fiscal year.
-Orders for lamps and other products decreased substantially, affected by lower automobile production at one of the Company's main customers, the Mitsubishi Motor Group.

Recent Developments Outside Japan

-In 2001 in China, the Company established GICO (Guangzhou Imasen Electric Industrial Co., Ltd.), which has since grown to be the Company's largest facility operating outside Japan. GICO mainly produces power and manual seat adjusters for the Accord, Odyssey, Fit and City, which are being manufactured at Guangqi Honda Automobile Co., Ltd. in Guangzhou. It also produces seat adjusters for the CR-V, Civic and Spirior being manufactured at Dongfeng Honda Automobile Co., Ltd. in Wuhan.

-The Company will increase its investment in Imasen Manufacturing India Private Limited, its auto parts production subsidiary in India. As the Indian market is now on a track to recovery, the Company has decided to resume operations at the temporarily frozen plant in spring. In addition, it will actively invest in production equipment and dies. The Company will double the capital of the Indian subsidiary to 316.7 million rupees by providing additional 150 million rupees (approximately 300 million yen). (From an article in the Nikkan Jidosha Shimbun on Jan. 18, 2010)

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

Outlook for FY2010

-Sales are expected to decrease in Japan because tax incentives will be discontinued during the fiscal year. However, demand and production are expected to recover outside Japan because automakers have substantially reduced their inventories.
-Although winning greater orders outside Japan is expected to improve profit, the Company expects a slight decrease in profit on the whole due to the discontinuation of sales incentives and negative currency translation as a result of the appreciation of the yen.
-The Company expects that, overall, sales by customer will increase year-on-year.
-The Company expects that sales to the Honda Motor Group will increase 5.2% year-on-year as a result of a recovery in North America.
-The Company expects that sales to the Nissan Motor Group will be almost the same as fiscal year 2009.
-The Company expects to receive more orders from the Mitsubishi Motor Group due to the greater volume of vehicles the company is producing for export.
-The Company does not foresee making any significant change to its product composition ratio, although it expects to sell a higher proportion of lamps. This is mainly due to an expected recovery in production at the Mitsubishi Motor Group, which is likely to place new orders with the Company.
-Since China is an important market contributing to Group-wide profits, the Company has started constructing its fourth expansion project in China in order to respond to winning greater orders, procuring more products locally, and increasing in-house production. The layout of the facilities will be completed in June, 2010.
-In India, the Company started mass-production of manual seat adjusters for Honda Motor Co., Ltd. in April, 2010.

New Mid-term Business Plan [Proud 2nd Stage (Recovery 1-2-3)]

  Target Fiscal year Measures
Step 1. Slim To slim down the Company's organizational structure in order to enable the Company to remain profitable even in a contracted market 2009 -Reducing the costs of materials and improving productivity
-Improving the efficiency of business operations and reducing labor costs. (An organizational change to this means took place in March 2009.)
-Setting up an "S Project Team" as an independent division dedicated to implementing initiatives that achieve improvements
Step 2. Simple To optimize the Company's production operations and business structure 2010 -Reorganizing production facilities in Japan, which includes transferring and consolidating production operations
Step 3. Speed To achieve a high level of productivity by improving business operating efficiencies 2011 <Product development>
-Safety improvements: Developing products that mitigate impact to the neck during collisions by using seat adjuster mechanisms.
-Environmental contributions: Reducing product weight as a means to improve fuel efficiency.
-Comfort enhancements
-Developing products that integrate seat adjuster mechanisms with electronics devices such as electronic control units


R&D Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 118 136 146
Ratio of R&D expenses to sales (%) 0.16 0.16 0.16

R&D Activities

Automotive components related business
<Seat adjusters>
-The Company developed seat adjusters that are extremely strong and capable of absorbing strong impacts to protect occupants at the time of collisions.
-The Company developed smaller and lighter products by reducing the number of parts, using new materials, and starting a new production process, all of which work to achieve greater fuel efficiency.
-The Company researched and developed products that ensure a comfortable ride. It also developed seats that help reduce sitting fatigue.
-The Company shortened product development time by using CAE analysis technology. Research and development was aimed at improving functionality, reducing the size and weight of products, and improving cost efficiency of seat slide adjusters and seat reclining adjusters.
-The Company has developed power seat adjusters with high performance in terms of lower noise and vibration. The power seat adjusters also offer integrated anti-trap electric control units. The Company is making presentations on this system to carmakers and seat manufactures, and has already started joint development activities with some customers.

<Window regulators>
-The Company is conducting R&D activities on solution-based, smaller and lighter window regulators.

<Electronic units>
-In addition to developing and launching integrated control units, which enable simultaneous control of various devices, several equipment, the Company commercialized memory seat ECUs and ECUs for seatbelt pretensioners. It has also developed controlling units for adjusting the positions of seats, mechatronics products that integrate structural and electronics technology.

-The Company has been developing various new lamps such as rear combination lamps and room lamps, etc. using LED elements.
-It is also working on developing modular overhead consoles, which integrates control units, lamps, and lock mechanisms.

-The Company continues its efforts to develop and market high-quality but small and low-cost horns.

-The Company developed new products based on technology in the areas of mechanisms and electrical operations. Specifically, the Company developed actuators, which control the opening and closing of magnetic valves and air conditioning ducts used in ventilation systems. These servos are more compact and lighter in weight. In addition, it conducted research and development activities to modularize clusters of magnetic valves; and developed and commercialized electrically adjustable windscreens and windshields for large motorcycles.

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 1,844 5,731 7,599
Automotive components 1,752 5,656 7,514

-The Company invested mainly in facilities that produce round reclining adjusters and seat adjusters.

Investments Outside Japan

-The Company has "revived" the plan to set up a new plant in Thailand. At the new plant, the Company will manufacture seat adjusters and deliver them to the facilities of Isuzu Motor and Honda Motor located in the nation. The site will be built adjacent to its Thai unit - Imasen Manufacturing (Thailand) Co. The investment will amount to approximately 200 million yen. Construction work is expected to kick off in the first half of March 2011 and the plant will become operative in March 2012. Under the initial plans, the start of production was scheduled for the middle of 2009, however, it was suspended due to the economic downturn since last fall and the production cuts by its customers. The Company has now decided to go ahead with its original plan as the new contracts in Thailand has been on steady track to recovery and its existing facility, by itself, cannot support future business expansion, space-wise. (From new releases issued by multiple sources in December 2009)

New Investment Projects (Automotive components related business)

(As of Mar. 31, 2010)

Company name
Facilities Planned amount of investment
(in million JPY)
Project period
From To
Imasen Electric Industrial Co., Ltd.
Nagoya plant
(Inuyama, Aichi Pref., Japan)
Production equipment 1,325 April 2010 March 2011
Imasen Electric Industrial Co., Ltd.
Gifu plant
(Kamo, Gifu Pref., Japan)
Production equipment 684 April 2010 March 2011
Imasen Electric Industrial Co., Ltd.
Yaotsu plant
(Kamo, Gifu Pref., Japan)
Production equipment 272 April 2010 March 2011
Imasen Electric Industrial Co., Ltd.
Okayama plant
(Kurashiki, Okayama Pref., Japan)
Production equipment 137 April 2010 March 2011
Imasen Electric Industrial Co., Ltd.
Kani plant
(Kani-shi, Gifu Pref., Japan)
Production equipment 129 April 2010 March 2011
Imasen Electric Industrial Co., Ltd.
Harusato plant
(Kani-shi, Gifu Pref., Japan)
Production equipment 98 April 2010 March 2011
Imasen Electric Industrial Co., Ltd.
Hiroshima plant
(Higashi Hiroshima City, Hiroshima Pref., Japan)
Production equipment 206 April 2010 March 2011
Guangzhou Imasen Electric Industrial Co.,Ltd.
(Guangdong, China)
Buildings and production equipment 600 Jan. 2010 Dec. 2010
Imasen Bucyrus Technology Inc.
(Ohio, USA)
Production equipment 950 Jan. 2010 Dec. 2010
Imasen Manufacturing India Pvt. Ltd.
(Rajasthan, India)
Production equipment 250 Jan. 2010 Dec. 2010
Imasen Manufacturing (Thailand) Co., Ltd.
(Ayutthaya, Thailand)
Buildings and production equipment 600 Jan. 2010 Dec. 2010

Imasen Philippines Mfg. Corp.
(Laguna, Philippines)

Production equipment 40 Jan. 2010 Dec. 2010