Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of change (%)	Factors
Overall
Sales	271,650	304,405	(10.8)	-
Operating income	3,378	6,071	(44.4)	-
Ordinary income	3,391	5,665	(40.1)	-
Net income	(1,849)	1,430	-	-
Japan
Sales	179,524	207,718	(14.6)	-The Company experienced a significant drop in business for automotive parts and assembly.
Ordinary income	(250)	(562)	-	-
Americas
Sales	31,853	37,297	(14.6)	-The Company's consolidated subsidiaries saw a sharp drop in business won from customers.
Ordinary income	(1,346)	194	-	-
China
Sales	17,339	19,964	(13.1)	-The Company's consolidated subsidiaries saw a sharp drop in business won from customers.
Ordinary income	2,413	2,749	(12.2)	-
Asia
Sales	42,932	39,425	8.9	-The Company's consolidated subsidiaries saw a rise in business won from customers.
Ordinary income	3,003	3,469	(13.4)	-

 

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	4,092	3,378	2,770

R&D Facilities

Facility	Location
Kashiwabara Plant	Saitama Pref., Japan
Tochigi R&D Center	Tochigi Pref., Japan
Goshi Giken Co., Ltd.	Kumamoto Pref., Japan
Yachiyo of America Inc.	Ohio, U.S.A.

-The Company announced on Feb. 21 its organizational changes to be effective on April 1. The R&D division will be divided into the R&D divisions No. 1 and No. 2. The No. 1 will be responsible for development of mass-produced products, while the No. 2 will be responsible for the next-generation technologies. As a base for the R&D division No.2, Saitama R&D Center will open in April and begin operations in June at the renovated, former plastic plant No. 2 at the former Kashiwabara Plant in Sayama, Saitama Pref. The company will abolish the regional management system, while it will consolidate the business restructuring promotion office and the IT department of the administration division into the newly established BPR promotion department. The business planning office under the direct control of the management council will be transferred to the administration division. (From an article in the Nikkan Jidosha Shimbun on February 23, 2012)

-The Company will enhance its development structure in Japan to step up its auto parts business. It will establish a new building adjacent to its existing Tochigi Research Center in Sakura City, Tochigi Prefecture, which will be installed with new testing equipment for fuel tanks. Operations at this facility are scheduled to begin in 2012. In addition, the company will increase R&D spending, while raising the number of engineers by 30 percent by fiscal year 2013. Through these expansion initiatives, the company aims to gain new customers, including automakers in Europe and the U.S. In addition to manufacturing vehicle parts, the Company also assembles mini vehicles for Honda. Bracing for declining demand from the automaker, the company is now poised to boost its global auto parts sales. The company has already broken ground at the site it had acquired for the project. The new testing machine will be used to conduct performance testing on fuel tanks to cater to the needs of European manufacturers. In a drive to shift from a major Honda supplier to a supplier with a wider customer base, the company is improving its development capabilities to meet diversifying customers' requirements. Investment in the new building, including the cost for testing equipment, is expected to reach hundreds of millions of yen. Upon completion of the new building, the company will rearrange its existing testing devices. The number of engineers will be raised from current 150-160 to 200 by March 2014, while the yearly R&D spending will be increased by 500 million yen each year from the estimated 3.4 billion yen for this fiscal year. Groupwide sales at the company's mini vehicle assembly business, which constitute over 40 percent of its consolidated sales, are expected to remain at 110 billion yen in this term ending March 2013, down 22.3 percent year-on-year, with production dropping 24 percent from last year to 116,000 vehicles. As a result, its overall sales during the year are projected to fall 11.3 percent from the previous year's result to 270 billion yen. Given Honda's switching to in-house production of mini vehicles, sales at the segment are likely to shrink further. Yachiyo is thereby increasing its focus on auto parts such as fuel tanks, sunroof systems and stamping products. (From an article in the Nikkan Jidosha Shimbun on December 21, 2011)

R&D Activities

1) Mass-production of technology to mass-produce fuel tanks for new vehicle models
2) Mass-production of sun-roofs for new model vehicles
3) Development of fuel tanks for new vehicle models
4) Development of sun-roofs for new model vehicles
5) Research and development of new-design resin fuel tanks
6) Research and development of new types of sunroofs and related technologies
7) Research and development of environmentally friendly auto parts
8) Research and development of press forming technology capable of handling semi-melted aluminum materials
9) The Company conducted R&D activities in order to launch business into new sectors.

-The Company will step up development of fuel tank and sunroof products based on its initiatives to increase sales to automakers other than Honda Motor, Yachiyo's largest shareholder and major customer. In the area of fuel tanks, the company is going to expand its scope of business by designing the whole system, including pumps and tubes, instead of specializing in the tank unit alone. For enhancing the sunroof business, the company will focus on highly functional products such as those requiring remodeling of the vehicle roof, by leveraging its know-how on sheet-metal products. Through these efforts, the company aims to boost the ratio of sales to automakers other than Honda from the current 10 percent to 50 percent by 2020. Expansion of business from a tank manufacturer to a comprehensive fuel system supplier will allow the company to deal with automakers as a Tier 1 supplier. The company will thereby optimize its R&D structure to integrate the whole system. Following its launching fuel tank production lines in North America, China and Thailand, the company is going to start making the products in Brazil and India, which will further enhance its supply network. (From an article in the Nikkan Jidosha Shimbun on August 25, 2011)

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	11,450	11,507
- Japan	6,050	6,643
- Americas	1,122	3,175
- China	1,703	400
- Asia	2,574	1,288

<Japan>
-The Company mainly invested to prepare production facilities in order to respond to new business, renew facilities and equipment, and install testing facilities and equipment.

<Americas>
-In the Americas, the Company mainly invested to prepare production facilities in order to respond to new business, renew facilities and equipment, and build a new plant.

<China>
-In China, the Company invested mainly to increase production capacity and expand plant buildings.

<Asia>
-In Asia, the Company invested to build new plants, prepare production facilities in order to respond to new business, and increase production capacity.

Investments Outside Japan

<Indonesia>
-The Company announced that it will establish a new plant in Indonesia to manufacture plastic fuel tanks for automobiles. A new company will be formed in April through a joint investment with local companies. Operations at the new facility, which will be capitalized at 23.5 million dollars (approximately 1.88 billion yen), are scheduled to begin in August 2013. The plant will be located in Karawang, West Java in the suburbs of Jakarta, conveniently situated for supplying to Honda's existing vehicle assembly plant, which is only 2 kilometers to the north. The expansion is intended to ensure a stable supply capacity to support Honda, which is planning to add a new plant in Indonesia in 2014 with the capacity to produce 120,000 vehicles a year. Yachiyo's new joint venture is expected to produce plastic fuel tanks for 240,000 vehicles a year. It will become Yachiyo's ninth production facility for the products in the world, as the company is working on expanding its parts production business outside Japan. (From an article in the Nikkan Jidosha Shimbun on March 19, 2012)  

<Mexico>
-The Company announced that it will establish a new subsidiary Yachiyo Mexico Manufacturing S.A. de C.V. in Guanajuato, Mexico to manufacture automotive components. The subsidiary will be capitalized at 240 million pesos, approximately 1.6 billion yen. The operations are expected to begin in April 2012 with approximately 60 employees. (From a press release on January 13, 2012)

Planned Capital Investments

(As of Mar. 31, 2012)

Company/Facility (Location)	Facility Details	Planned Investment Total (in million yen)	Start	End (Scheduled)	Remarks
Kashiwabara Plant (Saitama Pref., Japan)	Production facilities R&D facilities	495	Apr. 2012	Mar. 2013	Improving environment, Responding to new business, Renewing facilities/equipment
Yokkaichi Factory (Mie Pref., Japan)	Production facilities	545	May. 2012	Mar. 2013	Renewing facilities/equipment, Responding to new business, Improving environment
Suzuka Plant (Mie　Pref., Japan)	Production facilities	1,388	Feb. 2012	Jan. 2013	Responding to new business, Increasing production capacity
Kameyama Branch (Mie Pref., Japan)	Production facilities	387	Apr. 2012	Jan. 2013	Initiating labor-saving activities, rationalizing
Tochigi R&D Center (Tochigi Pref., Japan)	R&D facilities	829	Jul. 2011	Jan. 2013	Installing testing facilities.
Saitama R&D Center (Sayama, Saitama Pref.)	R&D facilities	1,515	Nov. 2011	Dec. 2012	Remodeling buildings,、 Enhancing testing facilities/equipment
Koshi Tecnical Works (Koshi, Kumamoto Pref.)	Production facilities, R&D facilities	563	Mar. 2011	Mar. 2013	Responding to new business, Enhancing testing facilities/equipment
US Yachiyo Inc. (Ohio, USA)	Production facilities	2,032	Jan. 2012	Dec. 2012	Increasing production capacity
Yachiyo Mfg. of Alabama LLC (Alabama, USA)	Production facilities	340	Jan. 2012	Nov. 2012	Responding to new business, Increasing production capacity
Yachiyo Mexico Manufacturing S.A. de C.V. (Guanajuato, Mexico)	Production facilities	1,096	Apr. 2012	Dec. 2012	Constructing new plant facilities.
Yachiyo Zhongshan Mfg. Co., Ltd. (Guangdong, China)	Production facilities	1,556	Jan. 2012	Dec. 2012	Responding to new business, Increasing production capacity
Yachiyo Wuhan Mfg. Co., Ltd. (Hubei, China)	Production facilities	363	Dec. 2011	Dec. 2012	Responding to new business, Renewing facilities/equipment
Siam Goshi Mfg. Co., Ltd. (Rayong Province, Thailand)	Production facilities	1,165	Aug. 2010	Dec. 2012	Responding to new business, Initiating labor-saving activities, rationalizing
Goshi-Thanglong Auto-Parts Co., Ltd (Hanoi, Vietnam)	Production facilities	1,162	Oct. 2011	Dec. 2012	Increasing production capacity, Responding to new business,
P.T. Yachiyo Trimitra Indonesia (Karawang Regency, Indonesia)	Production facilities	1,461	May 2012	Dec. 2012	Constructing new plant facilities.