Calsonic Kansei Corporation_Business Report FY2008

Business Highlights

Financial Overview (in millions of JPY)
  FY2008 FY2007 Rate of Change (%) Factors
Sales 669,415 833,496 (19.7%) Sales decreased due to a decline in sales at its main customers.
Operating income (16,755) 14,210 - Operating income decreased as a result of the following: production decreases at its main customers, negative currency translation, and an increase in depreciation costs for capital investments made in the fiscal year that ended March 2008.
Ordinary income (26,029) 10,208 - -
Net income (55,302) 2,809 - -

New R&D Center and Headquarters Built
-On Apr. 23, 2008, the Company showed to the press its new research and development center and headquarters building just completed in Kita-ku, Saitama prefecture. The new research and development center will consolidate its designing divisions, which used to be stationed separately in various places in the Kanto area. Also by locating the research and development and headquarters functions on the same site, the Company intends to enhance its development capability and speed up its strategy decision makings on a global basis. To the new building, Calsonic Kansei transferred its headquarters functions from Nakano-ku, Tokyo, and research and development functions from Sano-shi, Tochigi prefecture, and Atsugi-shi as well as Oppama, Kanagawa prefecture. The new establishment built at the site of approximately 33,000 square meters houses approximately 2,500 employees. (From an article in the Nikkan Jidosha Shimbun on Apr. 24, 2008)

New Die-casting Plant Built

-The Company announced an acquisition of a die-casting plant in Yamagata Prefecture from Fujimi, a supplier of aluminum die-casting components based in Tokorozawa-shi, Saitama Prefecture, and an establishment of a new company to start in-house production of aluminum die-casing components for car air-conditioner compressors. This will allow the company to set up an integrated compressor production system and improve its profitability. Fujimi sold its plant in Sagae-shi, Yamagata Prefecture and Calsonic Kansei established Calsonic Kansei Yamagata as its fully-owned subsidiary. The new company started production of aluminum die-casting parts. (From an article in the Nikkan Jidosha Shimbun on Sep. 3, 2008)

Business Reorganization 
-The Company will merge Calsonic Compressor Inc., its subsidiary manufacturing compressors in Utsunomiya city, Tochigi, as of Dec. 1, 2008. It intends to improve business efficiency by integrating its compressor business. Calsonic Compressor will be dissolved after the absorption. (From an article in the Nikkan Jidosha Shimbun on May 28, 2008)

-The Company announced that its board of directors decided to liquidate a subsidiary in Poland, Calsonic Kansei Poland, Sp.z.o.o. with the aim of improving its business efficiency in Europe. Calsonic Kansei Poland has already shifted its production and sales functions to the manufacturer's other subsidiaries in the U.K. and Rumania, and the liquidation process is slated to be completed in Apr. 2009. (From an article in the Nikkan Jidosha Shimbun on Jun.28, 2008)

Business Plan
-The Company is revving up cost reduction activities in the areas of manufacturing and development. Cost reduction steps that have been taken by each department will be integrated into a company-wide "MTCR (Monotsukuri Total Cost Reduction)" campaign for quick implementation under control of a new organization to be set up as of April 1, 2009. (From an article in the Nikkan Jidosha Shimbun on Mar. 25, 2009)

-The Company will strengthen marketing of in-vehicle units to expand sales to customers other than Nissan, as well. As a first step, it will position car air conditioning system as a priority area and explore new needs. For the time being, it will focus on marketing compressors as strategic products, for which it has won orders from European car makers. Then, by combining the products with related units such as HVAC (an interior unit), the Company will shift to marketing a full system in stages. Over a medium term, it will increase sales to customers other than Nissan to more than 50% of its total sales, a 10 percent increase compared to the current figure, to enhance the management stability. (From an article in the Nikkan Jidosha Shimbun on Aug. 27, 2008)

Earnings forecast by region (in billions of JPY)
Rate of
change (%)
Japan 35.5 39.2 (9.6)
North America 10.0 13.4 (25.7)
Europe 4.5 7.9 (43.0)
Asia 9.0 10.7 (16.1)


R&D Structure
-The Company's R&D activities are focused on developing new products and technologies that will minimize environmental impact, provide safety, and increase riding comfort.

R&D facilities

Country Facility
Japan R&D Center
*Established in May 2008
UK Calsonic Kansei Europe Technology Center
USA Calsonic Kansei North America Technical Center
China Calsonic Kansei (Shanghai) Corp.
(R&D Center)

-The company established an R&D Center in Saitama City, Japan in May 2008. The R&D divisions, which were spread out in different locations such as Sano, Atsugi, and Oppama, were consolidated at the new Center. In addition, the company's headquarters were also moved there to integrate both the development and headquarter functions.

R&D Policy

(1) To develop components and systems that respond to environmental concerns. And example of these types of components include a heat exchanger that complies with the need for technology that is environmentally focused. 
(2) To develop an exhaust system, and the components for it, which can improve fuel economy and exhaust purification performance.
(3) To develop systems and products that are compatible with sources of power that will drive next-generation vehicles such as fuel-cell cars and hybrid cars. 
(4) To develop highly advanced modular products as well as to develop components that are higher in performance and lighter in weight.
(5) To develop meters and information delivery systems that enhance safety.
(6) To develop air-conditioning systems that provide a comfortable driving environment.

R&D Expenditure (in millions of JPY)
  FY2008 FY2007 FY2006
Amount 27,579 27,933 28,728

-The Company is expected to invest about 21 billion 600 million yen in R&D activities in the fiscal year ending March 2010.

R&D Achievements (FY2008)
-The Company adopted a new development process that is capable of ensuring consistent quality and a high level of production efficiency right from the start of production. This was achieved through cross-functional development activities conducted by the Development Division and the Production Division from the very beginning of the development process. As a result, the company was able to successfully commercialize a thin and high-performance heat exchanger.

-The Company improved its competitiveness and expanded its market share globally by renewing a series of automotive air-conditioning system compressors.

Investment Activities

Capital Expenditure (in millions of JPY)
  FY2008 FY2007 FY2006
Amount 27,000 39,000 39,500

-In the fiscal year that ended March 2009, the Company made a capital investment of 27 billion yen, focusing on the automotive component business. The investment is being used to revamp production facilities so that they can respond to model changes being made by the Company's main customers. Also, the capital is being used to construct an additional building that will enable the company to upgrade its analytical capabilities at its test center.

-The Company made a capital investment of 23 billion 800 million yen in the automotive component business, mainly investing in its test center; Calsonic Kansei (Thailand) Co., Ltd..; Tokyo Radiator Mfg. Co., Ltd.; and CKP Corporation in order to prepare production facilities for the launch of new products, improve analytical capabilities at its development test center, and strengthen its compressor production capabilities in Asia.  

Capital Investment Plan (FY2009)
-The Company plans to invest a total of 15,800 million yen throughout the Group in FY2009, which will end in March 2010.