Aisin Seiki Co., Ltd. Business Report FY2010

Business Highlights

Financial Overview

(in 100 million JPY)
  FY2010 FY2009 Rate of Change
Sales 22,574 20,544 9.9 1)
Ordinary income 1,478 949 55.7 2)
Net income 696 166 319.2 -
Auto Parts Business
Sales 21,759 19,699 10.5 3)

-Overall sales at the Company increased 9.9% year-on-year to 2 trillion, 257.4 billion yen, compared to last year's 2 trillion 54.4 billion yen due to a strong sales trend in products designed for hybrid vehicles, including  transmission products and electric pumps used for cooling engines,  even though the company adjusted its production at some plants at the end of the fiscal year in order to accommodate the plant operations of customers affected  by the Great East Japan Earthquake. In addition, sales overseas, especially in Asia, contributed to the growth in sales. . 
-In terms of profits, the Company's consolidated business operating profit grew 56.8% year-on-year to 137.2 billion yen. (It was 87.5 billion in FY2009). Consolidated ordinary profit was up 55.8% year-on-year to 147.8 billion yen (94.9 billion yen in FY2009); and consolidated net profit rose significantly to 69.6 billion compared to the 16.6 billion yen posted in FY2009. These increases were  due to the Company's initiatives to improve its profit structure in all business areas, in addition to its overall increase in sales revenue, in spite of facing issues such as production adjustments and fluctuations in materials costs and currency translation. 
-Sales revenue for the Aisin Seiki Group, however, was 1 trillion 73.6 billion yen due to a decrease in the volume of unit production by Japanese auto makers in Japan. Business operating profit was 53.7 billion yen as a result of initiatives to improve the overall business structure and reductions in depreciation costs, in spite of the Group's having to deal with fluctuations in materials prices and currency translation.

Joint Ventures

-Aisin Chemical Co., Ltd. based in Toyota City, Aichi Prefecture, a supplier of chemicals and friction materials in the Aisin Seiki Group, announced on August 19 that it had established a subsidiary in China for production of disc brake pads, its third overseas production facility following in the U.S. and Thailand. The new China plant is targeting to generate 1.6 billion yen in sales in 2015 primarily from products that will be delivered finally to Toyota's local joint venture plant with its brake pad integrated in the brake system at a local plant in Tianjin of a brake system supplier Advics. The local subsidiary "Tangshan Aisin Chemical Co., Ltd.," which is capitalized at 600 million yen, was established in July with an investment of 60 percent by Aisin Chemical, 20 percent by Aisin Seiki and 20 percent by Advics. Production equipment will be installed at the local plant of Aisin Seiki located in Tangshan, Hebei Province. Production will start on one production line by May 2011. (From an article in the Nikkan Jidosha Shimbun on Aug. 20, 2010)

-Toyota Boshoku Corporation and Aisin Seiki Co., Ltd. have decided to jointly manufacture interior parts and engine air intake system parts in Sorocaba, Sao Paulo, Brazil. The affiliate in charge of manufacturing will be Toyota Boshoku do Brasil Ltda. (TBDB), which was established in 2007. Toyota Boshoku has a 80 percent stake in TBDB while Aisin Seiki owns the remaining 20 percent. The two companies will increase their capital investments in TBDB in stages by adding a total of approximately 2.5 billion yen in capital and they also plan to manage the business operations of TBDB by changing the form of the company to a manufacturing company. TBDB will manufacture seats, door trims, and air cleaners for a newly developed compact car to be produced at the new Brazilian plant of Toyota Motor Corporation. At the time of start-up, the facility is planning to produce these components for 70,000 vehicles per year. Toyota Boshoku and Aisin Seiki will continue their cooperative relationship through joint development and manufacturing of seat frame parts, and TBDB will become the fourth jointly owned and operated company following the companies in the cities of Guangzhou and Tianjin in China and in Poland. (From a press release on August 5, 2010)

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

Outlook for FY2011

(in million JPY)
  FY2011 FY2010 Year-on-year Fluctuation
Sales 2,200,000 2,257,436 (57,436)
Operating income 110,000 137,266 (27,266)
Ordinary income 115,000 147,894 (32,894)
Net income 50,000 69,643 (19,643)


R&D Expenditure

(in 100 million JPY)
  FY2010 FY2009 FY2008
Overall 1,114
1,011 1,159
Auto parts business -
983 1,115

R&D Activities

-The Company is expanding the scope of its R&D activities, conducting development activities in all sorts of fields. These included developing products for ITSs, from systems creation to modularization; conducting scientific research on people's living environment and the eco-system based on the latest automotive parts technology; and researching cutting-edge technology such as fuel cells and lasers. Its most recent achievements include an electric-powered water pump for use in engine cooling and a gas-engine co-generation system for homes.

Product Development

Electric-powered vacuum pump for brakes.
-Developed an electric vacuum pump for use in automobile brake systems. There are two types available; one for conventional gasoline engine vehicles and the other for electric and hybrid vehicles. When used for a vehicle with a 2-liter level engine, fuel efficiency is expected to be improved by 0.2 to 0.4 percent because engine load can be saved by electricity. Aisin has already started to approach automakers for making presentation of this new technology. (From an article in the Nikkan Jidosha Shimbun on May. 21, 2010)

Investment Activities

Capital Expenditure

(in billion JPY)
  FY2010 FY2009 FY2008
Overall   1,333 83.8 220.2
Auto parts business -
64.2 207.9

-Among the amount invested to make capital improvements as of the end of FY2010, which ended March 2011, the Aishin Group invested 49 billion yen, while Aisin AW inivested 66.9 billion yen .

-The Company invested to develop new products, as well as improve existing products, in order to respond to model changes made by auto makers. Also the Company, in addition to making investments to rationalize production facilities and invest in R&D activities such in new-product development and evaluations facilitiess, also is investing to make more effective and efficient use and specificiations of its existing facilities, selectively targeting the facilities it will invest in and making selective decisions, carefully focusing on what capital expenditures to make.