Financial Overview

( in millions of JPY )

-	FY2006	FY2005	R. C.	Factors
Overall
Sales	353,083	282,777	24.9%	-
Operating profit	10,469	6,546	59.9%	Sales increases and cost improvements in the domestic market and sales increases in the overseas markets positively contributed to the increase in profit .
Ordinary income	9,861	7,190	37.1%
Net income	5,387	3,685	46.2%
Automotive components field
Sales	106,010	99,468	6.6%	<Japan> Sales increased, thanks to increased orders for parts in general, including fuel tanks. <North America> Sales increased as the Company made AY Mfg. Ltd. its consolidated subsidiary, while a consolidated subsidiary, US Yahciyo Inc., won more orders. <Asia> Sales increased as its consolidated subsidiaries Yachiyo Zhongshan Manufacturing Co., Ltd. (China) and Siam Goshi Manufacturing Co., Ltd. (Thailand) won more orders.
Automobile Assembly
Sales	169,024	130,717	29.3%	Sales increased as orders for the Honda Zest, which went into production in February 2006, increased.

( R.C. : Rate of Change )

Company Becomes Honda subsidiary
In November 2006, Honda Motor Co., Ltd. announced that it will make the Company, its equity method affiliate for manufacturing bodies, Honda's 100% owned subsidiary by acquiring more than 50% of the Company's stocks through a takeover bid. The automaker aims to reinforce the mini-vehicle and parts manufacturing operations of the Company by deepening its ties with the supplier. From an article in the Nikkan Jidosha Shimbun on Nov. 15, 2006)

Contracts
The Company has won a new contract to supply plastic fuel tanks to Toyota Motor Thailand Company Ltd., Toyota's production company in Thailand, for "the Yaris (Japanese brand name : Vitz)" The production of plastic fuel tanks will start in January 2007 at Siam Yachiyo Co., Ltd. The production volume for the fiscal year 2007 at Siam Yachiyo Co., Ltd is projected to be 450,000 units including this new order. (From a press release by the company on Jan. 15 2007)

-The following outlines the 9th mid-term business plan covering April 1, 2005 to March 31, 2008.
-Plans are to generate 300 billion JPY in sales and more than a 12% ROE by the year ending March 2008.

< Automotive Parts>
To achieve a more efficient structure by aligning its design and production activities with those of finished vehicles:
(1) Expanding its core businesses
Fuel tanks: To increase the production volume of fuel tanks and make them more environmental friendly
Sunroofs: To enhance its product mix and reduce costs
Motorcycle business: To make motorcycles more environmental friendly
Non-factory installed parts: To expand its operations in this area
(2) Expanding sales channels
(3) Providing training to its human resources worldwide

< Automobile Assembly>
To strengthen its operations base by further reinforcing its corporate organization.
(1) Revolutionizing the structure of its production line (to reduce costs by 6% and to achieve manufacturing 1,000 units/day based on a cost level of 900 units/day)
(2) Pursuing the ultimate level of quality
(3) Providing training to human resources to make them self-sufficient

R&D Expenditure

( in millions of JPY )

-	FY2006	FY2005	FY2004
R&D	1,622	1,316	1,256

For automotive components, achievements  and continuing R&D activities involved the following:
(1) Mass-production of new-design, lightweight,  thin sliding-roofs
(2) Development of metal honeycomb catalyst substrates (for two-wheeled vehicles) that meet domestic and overseas emission standards
(3) Research and development of new-design resin fuel tanks
(4) Research and development of elemental technology in the areas around fuel tanks
(5) Research and development of elemental technology in the areas around sun roofs
(6) Research and development of new type of sun roof
(7)Research and development on environmental technology for sun roofs.
(8) Research and development of catalysts (for two-wheeled vehicles) that meet domestic and overseas emission standards
(9)Research and development on press forming technology for aluminum materials that are in a semi-melted state.

Investment Expenditure

( in millions of JPY )

-	FY2006	FY2005	FY2004
Group	10,181	7,490	6,275
Automotive components	8,991	5,739	5,504
Automobile Assembly	1,176	1,734	767

New facilities for automotive parts business

( in millions of JPY )

Company Office Division	Purpose	Planned total investment	Starting	Planned completion	Remarks
Yachiyo Industry Co., Ltd.
Kashiwabara Plant (Saitama Pref., Japan)
Automotive parts and others	- Production related facilities - R&D facilities	3,849	2007.01	2008.03	Expand   capabilities, handle new business, and make improvements in the area of  environmental protection
Yokkaichi Plant (Mie Pref., Japan)
Automotive parts	Production related facilities	4,011	2006.12	2008.03	Expand capabilities, handle new business, and make improvements in the area of  environmental protection
Suzuka Plant (Mie Pref., Japan)
Automotive parts	Production related facilities	746	2007.03	2008.03	Rationalize, cut down on labor, handle new business, and make improvements in the area of  environmental protection
Kameyama Office (Mie Pref., Japan)
Automotive parts	Production related facilities	1,750	2007.03	2008.03	Rationalize, cut down on labor, expand capabilities, and to install new equipment
Hamamatsu Office (Shizuoka Pref., Japan )
Automotive parts	Production related facilities	13	2007.07	2007.12	Make improvements in the area of  environmental protection
Tochigi Research Center (Tochigi Pref., Japan)
Automotive parts	R&D facilities	52	2007.06	2007.12	Install new equipment and test equipment
Domestic subsidiaries
Goshi Giken Co., Ltd. (Kumamoto Pref., Japan)
Automotive parts	Production related facilities	1,130	2007.03	2008.03	Rationalize, cut down on labor, handle new business, and  expand capabilities
Uemura Tech Co., Ltd. (Kumamoto Pref., Japan)
Automotive parts	Production related facilities	176	2007.03	2008.03	Rationalize, cut down on labor, handle new business, and  expand capabilities
Goshi Tech Co., Ltd. (Kumamoto Pref., Japan)
Automotive parts	Production related facilities	250	2007.03	2007.12	Handle new business and expand capabilities
Overseas subsidiaries
Yachiyo of Ontario Mfg. Inc. (Ontario, Canada)
Automotive parts	Production related facilities	1,394	2006.12	2007.12	Install new equipment, handle new business and make improvements in the area of  environmental protection
Yachiyo of America Inc. (Marion, Ohio, USA)
Automotive parts	Production related facilities	1,110	2007.04	2007.12	North American research and development center
US Yachiyo Inc. (Marion, Ohio, USA)
Automotive parts	Production related facilities	645	2006.12	2007.12	Rationalize, cut down on labor, handle new business, and to install new equipment
Ycchiyo Manufacturing of Alabama LLC (Steele, Alabama USA)
Automotive parts	Production related facilities	3,228	2006.06	2008.01	Install new equipment, expand capabilities and handle new business
AY MANUFACTURING Ltd. (Columbus, Ohio, USA)
Automotive parts	Production related facilities	1,157	2006.12	2007.12	Rationalize, cut down on labor, handle new business, and make improvements in the area of  environmental protection
Siam Yachiyo Co., Ltd. (Prachinburi, Thailand)
Automotive parts	Production related facilities	277	2006.03	2008.03	Rationalize, cut down on labor, handle new business, and  expand capabilities
Siam Goshi Mfg. Co., Ltd. (Rayong, Thailand)
Automotive parts	Production related facilities	623	2006.11	2007.12	Rationalize, cut down on labor and handle new business
Goshi-Thanglong Auto-Parts Co., Ltd. (Hanoi, Vietnam)
Automotive parts	Production related facilities	501	2006.10	2007.12	Install new equipment and expand capabilities
Yachiyo Zhongshan Manufacturing Co., Ltd. (Zhongshan, China)
Automotive parts	Production related facilities	727	2006.09	2007.11	Install new equipment and handle new business