Business Highlights

Financial overview ( in millions of JPY )
- FY 2006 FY 2005 R.C. (%) Factors
Sales 106,400 123,000 (13.4) -
Ordinary income 4,600 5,522 (15.7) -
Net income 600 1,720 (64.3) -
( R.C. : Rate of Change ) Sales by product
- Sales decreased to 47,500 million yen (down 17.6% year-on-year), due to decreased sales of engines for Nissan's vehicles such as the Tiida, March, and Cube sold in Japan; and the Almera sold in Europe.

<Manual Transmissions>
- Sales decreased to 22,900 million yen (down 10.5% year-on-year) due to a decline in sales of manual transmissions for Nissan vehicles such as the Almera sold in Europe and the Altima sold in the North America.

<Automobile parts>
- Sales decreased 9.3% to 36,000 million yen, compared to the previous fiscal year.

Cost reduction initiatives
The Company will aim at cost reduction of 30% compared with previous engines in its new engine for small cars to be launched during its mid-term plan up to FY2008, This is more than a level that Nissan Motor, its top shareholder, is requiring of its suppliers. In development of small cars, to achieve the target of cost reduction is becoming increasingly important, in view of global expansion and growing competition with mini vehicles. The Company will try to achieve both cost reduction and development of a new engine with improved fuel efficiency, engine performance and feeling in support of Nissan's small car marketing. The new engine will be a less than 1.5-litre gasoline engine for 1-litre-class small cars. The Company will consider purchasing parts from cost competitive regions in addition to improving its engine design. In order to enhance production efficiency, it will set up a dedicated line for the new engine and introduce the latest production engineering.(From a story in the Nikkan Jidosha Shimbun on Jul. 11, 2006)

New production system
The Company will more vigorously pursue the "synchronized production" system, by which production models and volume of its engines are flexibly adjusted in complete synchronization with the vehicle assembly schedule of its main customer, Nissan Motor Co. In an effort to minimize waste and loss, mainly in the area of logistics, the Company is set to curtail the current 3-day lead-time between production and delivery on the model engine production line to a 2.5-day period during fiscal 2007. Furthermore, the Company plans to apply the system to all its engine production lines to secure similar improvement in efficiency by fiscal 2008, which is the final year of the current midterm business plan. It also expects such action will lead to enhancing support to the Nissan Group as well as increasing profitability..(From a story in the Nikkan Jidosha Shimbun on Jan. 11, 2007)


R&D Expenditure ( in millions of JPY )
- FY2006 FY2005 FY2004
Automotive Business 96 34 36

Product Development Structure
The Company set up an integrated R&D structure that enables the Company to conduct planning, designing, and test production experiments needed for commercializing products. Also, the Company developed innovative products including clean, economical, and high performance engines and compact and light manual transmissions by fully utilizing the latest computer systems on digital mockups, simulation and data analysis. 

R&D achievements
In December 2006, the Company started producing a more fuel efficient version of the HR15DE, an inline 4-cylinder engine for Nissan vehicles such as the Tiida, Note, Wing Road, and Cube. Combined with a CVT, this engine has already surpassed the 2010 Fuel Efficiency Standards by 20%.
Manual transmissions:
-In June 2006, the Company started producing the F52A, a manual transmission for FF vehicles, which makes shifting gears more smooth and comfortable. This manual transmission is mounted on Nissan vehicles such as the Qashqai and X-Trail marketed in Europe, and the Altima and Sentra sold in North America.

-HR15DE Engine >>>Image1 , Image2 ,. Image3
-The engine was developed to attain both fuel efficiency and acceleration performance under the most common driving conditions. The engine offers the highest specs in its class, with medium and low speed torque, fuel efficiency, low-noise, and light weight/compact-size. 
-Combustion time was shortened and thermal efficiency improved by strengthening the gas flow within the combustion chamber.
-This engine employs the world's highest level of friction reduction technology through utilizing a new method to machine cylinder bores and producing a mirror-finish to the crankshaft and cam bearings.
-Out of engine composing parts, nine are manufactured in the Company >>> Rocker Cover , Water Outlet , Camshaft , Cylinder head , Cylinder Block , Connecting rod , Crankshaft , Front Cover , Oilpan (according to JSAE 2006)

Investment Activities

Capital investment (in millions of JPY))
- FY2006 F2005 FY2004
Automotive Business 7,400 8,900 8,700

- The Company invested 7,100 million yen mainly on streamlining and renewing manufacturing facilities to produce automotive units and parts for both redesigned engines and manual transmissions made by its customers. The Company spent 2,700 million yen on the Engine Segment and 4,400 million yen on the Manual Transmission Segment.

-For the 2007 fiscal year ending in March 2008, the Company plans to invest 7,000 million yen mainly on manufacturing facilities for producing automotive units and parts, in order to deal with planned model changes of engines and manual transmissions made by its customers.