Denso Group (China) FY2005-2006

Business Highlights

Engine parts
- In Mar. 2005, the Company established a joint venture with Hanshin Electric Co., Ltd.-an ignition coil manufacturer based in Kobe, Hyogo prefecture-in the city of Wuxi in China, which is the Company's first production base for automotive ignition coils in the country. The new company, Wuxi DENSO Hanshin Automotive Products Co., Ltd., was established, being capitalized at 13 million dollars, owned 75% by DENSO (China) Investment Co., Ltd. and 25% by Hanshin Electric Co., Ltd. Commercial production will begin at the new plant, with the total investment of approximately 2.1billion yen, in January 2007 for mainly Japanese auto manufactures in China. The new company, with a workforce of 500, will produce two types of products, stick coils and plug-top coils.

- In Apr. 2005, Toyota Boshoku Corporation and the Company announced that the companies will jointly establish an oil filter manufacturing company--Toyota Boshoku Foshan Co., Ltd.--in Foshan, Guangdong, China. The investment will be approximately 1.9 billion yen, with a 60% stake owned by Toyota Shokubo and 40% by DENSO (China) Investment Co., Ltd. The new company will begin production in summer 2006 at an approximately 16,000 square-meter-plant on an approximately 79,000 square-meter-site to respond to the growing market demand in China, and is expected to generate sales of approximately 2.3 billion yen with a workforce of approximately 500 in 2010.

Climate control systems
- In Mar. 2005, the Company has established DENSO (Tianjin) Thermal Products Co., Ltd., in Tianjin, China, to produce heat exchangers for car air conditioners and radiators. This is the company's fourth car air conditioner plant, among its 13 production bases in China. The new Tianjin company is capitalized at 4.3 billion yen, fully funded by DENSO (China) Investment Co., Ltd.-a wholly owned subsidiary of Denso-with a total investment of 6.8 billion yen injected into the plant. Denso aims to achieve 13 billion yen in sales mainly to Japanese automakers in northern China by 2010, with a workforce increased to 800 by the time.

- In Apr. 2005, Toyota Industries Corporation (TICO), the Company and two other Toyota group companies announced that they will establish a joint venture to produce car air-conditioning compressors in Kunshan, Jiangsu, China. The joint venture, called TD Automotive Compressor Kunshan, Co., Ltd., will be established in May as the Toyota group's second air-conditioning compressor production base in China, and begin producing variable displacement compressors in April 2006. The initial investment will be approximately 1 billion yen, and the new company, being capitalized at 690 million yen, will be owned 57% by TICO, 35% by DENSO, and 4% each by Toyota Tsusho Corporation and Toyota Industry Kunshan Co., Ltd.--Toyota Industries' Chinese subsidiary. The plant, with a workforce of 60, will produce 280,000 compressors in 2007.

- In Dec. 2005, Fawer Automotive Parts Co., Ltd. announced that cumulative production and sales of car air conditioners at Tianjin FAWER Denso Air-Conditioner Co., Ltd. , a joint venture with Denso, reached 33,500 units at the end of Sep. 2005.

- The Company announced establishment of a new company in Tianjin, China, Tianjing Poong Sung Electronics Co., Ltd., to produce automotive instrument clusters. A new plant will be built to start volume production at the end of this year and will supply Korean automotive manufacturers in China. The total investment is projected at 2.58 million dollars or approx. 300 million yen. In 2010, employment is expected to reach 80 people and sales are projected to reach approx. 2.7 billion yen.(From a story in the Nikkan Jidosha Shimbun on Mar. 16, 2006)

Information communication systems
- The Company announced that it has established a new company to produce car navigation systems in Tianjin, China. The new company, DENSO (Tianjin) ITS Co., will be capitalized at $700,000, 95% of which is invested by DENSO (China) Investment Co., Ltd.--the Company's wholly owned holding company in China and 5% by Tianjin TEDA Group--Investment company of Tianjin Economic-Technological Development Area to start production from February 2006 with 20 employees and supply the system to automakers in china. Annual production capacity in 2006 is expected to be about 60,000 units. (From an article in the Nikkan Jidosha Shimbun on Jun. 14, 2005)