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5. Fuji Kiko Co., Ltd. Business Report FY ended Mar. 2016

Fuji Kiko Co., Ltd. Business Report FY ended Mar. 2016

1) Sales
-The Company worked at implementing its action plan based on various strategies such as its regional, sales, product and production strategies for its major products (steering columns, seats, and powertrains). Nevertheless, sales were lower y/y because of sluggish demand in Japan and negative currency translation.

Sales by region:
-Japan: sales, which were JPY 43,239 million, were 10.9% lower y/y because of weak demand at some customers.
-Americas: Sales were JPY 23,401 million, an 18.9% increase y/y, thanks to an increase in orders at its steering-column and seat businesses because of continued, robust, automotive sales
-Europe: Sales, which were JPY 17,206 million, decreased 3.1% y/y because of negative currency translation.
-China: Sales, which were JPY 13,341 million, decreased 4.3% y/y because of negative currency translation.
-Southeast Asia: Sales, which were JPY 7,124 million, decreased 0.2% y/y because of negative currency translation.

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


-The Company has developed a preliminary plan for the production of steering columns in Mexico for 2017. In response to to increasing production of Japanese automakers in Mexico, the Company will locally produce steering columns which are currently supplied from its plants in other countries. The Company plans to start producing the parts at its expanded plant with an initial annual production capacity of 1 million units, and aims to increase the capacity to 2 million units in the future. Fuji Kiko's plant in Mexico currently produces mechanical parts for seats and automatic transmission shifters. By adding production of its main product, steering columns, the Company will increase the in-house production ratio of processed parts. The Company hopes to improve the profitability of its business in Mexico. (From an article in the Nikkan Jidosha Shimbun on August 6, 2015)

R&D Structure

-R&D activities are basically being conducted by the Company, meaning that the Company in Japan supports its subsidiaries overseas by conducting all basic development activities up to the prototype stage. The subsidiaries then take over from the trial-production stage, making further product developments appropriate for the actual vehicle models.
-The Company has 393 members working in R&D, including members working in prototypes and testing.
-As of the end of March 2016, the Company has 434 industrial property rights (189 in Japan, and 245 outside Japan).

R&D Activities

Steering column business
-The Company is working to reduce product costs and weight while trying to improve safety and product appeal. It will do this by improving the level of plastic forming technologies it uses. It plans to achieve this by reaching the required level of functions and performance demanded for steering columns by utilizing the most optimal mechanisms and designs.

-The Company is addressing the issues and needs surrounding globalization; enhancing its framework for conducting development activities in three regions (Japan, Europe, and the U.S.A.); and improving its competitive edge and product lineup by taking customer demand in the U.S.A. and Europe into consideration.

-The Company is jointly developing future technologies and products with automakers and system manufacturers to improve running performance.

Seating business
-The Company worked on developing functional core components and systems used in seats, such as seat recliners, height adjusters, slidesand lock. In response to the growing needs for environmental measures, safety, and comfort, the Company is engaged in reducing the size, weight and cost of products, as well as improving their strength and functions in addition.

-In order to produce seats locally in China, the Company established an R&D center in the country. This center is currently developing materials and production methods.

-The Company is developing products that can satisfy the seating layouts used in RV vehicles, hoping to improve their usability so as to satisfy increasingly diverse customers' demands.

-The Company is conducting joint R&D activities with Tachi-S Co., Ltd., hoping to maximize synergy effects so as to further reduce development time.

Powertrain Business
-The Company, in creating automatic-transmission shifters that offer even more competitive advantages through cost and weight reductions, is developing standard type shifters. Also, the Company is currently developing more compact products for the future in responding to improving product appeal by enhancing product feel and sound.

-In order to strengthen its competitive advantages in the power-train business, such as making its drive plates lighter and lower in price, the Company continued R&D activities by making use of the expertise it has in its proprietary plastic processing technology and analytical technology.

-The Company is developing components for heavy vehicles such as manual-transmission and automatic-transmission control parts, based on its customers' specifications.

-In the fiscal year that ended in March 2016, capital investments were made in the Americas, Europe, China, and elsewhere to boost production capacity, set up production operations to respond to new orders, and build technical centers.