Nippon Seiki Business Report FY2006

Business Highlights

Financial overview
(in million JPY) FY2006 FY2005 Rate of Change (%) Factors
Sales 193,178 175,229 10.2 -
Operating income 19,703 16,299 20.9 -
Ordinary income 20,770 17,925 15.9 -
Current net income 11,840 9,318 27.1 -
Automotive and general-purpose instrument business
Sales 127,207 111,641 13.9 Sales of automotive instruments in Japan, North America, Europe and China increased. Sales of motorcycle instruments increased in Japan and Brazil.
Operating income 17,085 14,243 20.0 In addition to the sales increase, initiatives to improve the Company's productivity, integrate purchasing activities, and have all the Group facilities mutually supply parts to each other , effectively worked to lower material costs, creating positive results.
Highlights in Japan

In August 2006, a new technical center constructed at the Takami plant (Nagaoka-shi, Niigata Prefecture) began operating.
>>>See Investment for details.

Highlights in overseas
Its automotive instrument manufacturing and sales company established in Brazil in July 2007 began constructing a plant in October 2006.

>>> See Investment for details.

The Company established Vietnam Nippon Seiki Co., Ltd. in Hanoi as a subsidiary to manufacture motorcycle instruments. The construction of the production facility started in April 2007 and will be completed in October 2007. Operations are scheduled to start in April 2008.

>>> See Investment for details.

Construction of No.2 plant at Thai Nippon Seiki Co., Ltd. was completed in August 2006. The plant started operating in October.


-FY2006 total R&D expenses were 3,403 million yen.

-The Company was engaged in the development of vehicle equipment and other diversified products through close collaboration between the R&D Center, the development and design department of each business segment, and the production technology department.

In April 2006, the Company established Nippon Seiki North American Design Center, which is the design and development department of its sales subsidiary in North America, NS International Ltd.

The Company announced that its technical center, which has been under construction at the site of the Takami Plant for manufacture and assembly of instrument parts in Nagaoka City, Niigata Prefecture, will start operation on August 21, 2007. It will be responsible for development and design of automotive instruments and precision processing of molds. The company aims to achieve higher competitiveness such as shorter development period through establishing an integrated manufacturing system from development to production with these additional functions to the existing plant. Takami Plant is a mother factory for the Company's overseas operations and it will strengthen the "mother" function to improve quality and cost performance by locating the technical center within the plant. (From a story in the Nikkan Jidosha Shimbun on Jul. 29, 2006)

Major R&D activities (Automobile and general-purpose instruments business)
R&D expenses were 2,803 million yen.

The Company is engaged in:
- Development of products for HMI (Human Machine Interface) such as heads-up displays. Also technical development of information display systems that provide assistance to drivers.
- Technical development of telematics systems for cars

Technical tie-up (as of March, 2007)
Partner Location Contract Contract Period
Tatung Precise Meter Co., Ltd. Taiwan Technical licensing on motorcycle meters  5 years from
Technical licensing on four- wheeled vehicle meters  5 years from
JNS Instruments Ltd. India Supplying know-how on manufacturing meters for motorcycles and four- wheeled vehicles 6 years from
Machino-Autoparts Company Vietnam Technical licensing on motorcycle meters 7 years from

Investment Activities