Financial overview

In million JPY	FY2006	FY2005	Rate of Change (%)	Factors
Overall
Sales	717,225	628,474	14.1	-
Operating income	62,383	42,552	46.6	Operating income rose because the Company improved its capacity utilization, thanks to increased sales and production volumes, enhanced productivity, improved profitability of export volume due to the weak yen, and lower procurement costs from external suppliers
Ordinary income	57,595	38,916	48.0	-
Current net income	34,853	25,586	36.2	-
Automotive related division
Sales	397,863	353,124	12.7	In the automotive bearings business, sales of hub unit bearings, standard contact ball bearings and needle bearings increased in the global market.  In the auto parts business, sales of electric power steering systems and automatic transmission parts increased in Japan. In addition, sales of steering columns increased in the Americas, Thailand and China; and sales of electric power steering systems increased in Europe.
Operating income	22,687	17,388	30.5	Profitability improved as capacity utilization improved while procurement costs for parts and materials sourced from outside the Company were down.

Joint venture
The Company announced on March 7 that it will establish a joint venture with ABC Bearings Limited located in Mumbai for manufacturing bearings in India for the first time as a Japanese corporation. The joint venture named "NSK-ABC Bearings" will construct its plant in the industrial park in the suburbs of Chennai with a building area of 7,000 square meters at the site of 80,000 square meters. Products will include HUB unit bearings, bearings for transmission and bearings for magnetic clutch. Production is scheduled to start in January 2008. (From an article in the Nikkan Jidosha Shimbun on Mar.8, 2007)

Challenges for FY2007
In FY2006, the Company focuses on:
- Strengthening its production capacity
- Reinforcing its R&D capabilities
- Enhancing its global management structure
- Increasing profitability outside Japan

R&D

In fiscal year 2006 that ended March 2007, the Company's capital investments totaled 37,689 million yen, which were mainly used for large and super large-sized bearings, automotive bearings, and electric power steering systems. 

Automotive products
- In responding to strong demand for hub unit bearings in and outside Japan, the Company invested to increase the production volume of bearings for drivetrains, mainly transmissions.
- The Company increased the amount it invested in electric power steering systems, which are in great demand worldwide to replace hydraulic power steering systems.
- Total investment reached 19,550 million yen.

Major new facilities for the automotive parts related business

	Planned investment (million JPY)	Start	Completion	Purpose
NSK Ltd. Ohtsu Plant
Manufacturing facilities for automotive bearings	2,803	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity, and streamlining operations
NSK Ltd. Ishibe Plant
Manufacturing facilities for automotive bearings	4,327	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity, and streamlining operations
NSK Ltd.  Saitama Plant (Saitama Pref., Japan)
Manufacturing facilities for automotive bearings	2,032	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity, and streamlining operations
NSK Steering Systems  (Gunma Pref., Japan)
Manufacturing facilities for steering systems	4,281	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity, and streamlining operations
NSK Needle Bearing Co., Ltd.
Manufacturing facilities for needle bearings	3,288	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity, and streamlining operations
NSK Corporation
Manufacturing facilities for automotive bearings and ball bearings for general use	3,158	Apr., 2006	March, 2008	Reorganizing and increasing production; and streamlining operations
NSK Steeling Systems America. Inc.
Manufacturing facilities for steering systems	1,199	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity
NSK Brazil LTDA.
Manufacturing facilities for automotive bearings and ball bearings for general use	1,215	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity; and streamlining operations
NSK Bearings Europe Ltd.
Manufacturing facilities for automotive bearings and ball bearings for general use	1,396	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity; and streamlining operations
NSK Steering Systems Europe (Polska) Sp.Zo.o
Manufacturing facilities for steering systems	1,314	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity
NSK Bearings Manufacturing (Thailand) Co., Ltd.
Manufacturing facilities for automotive bearings	1,441	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity
Siam NSK Steering Systems Co., Ltd.
Manufacturing facilities for steering systems	1,009	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity
Kunshan NSK Co., Ltd.
Manufacturing facilities for automotive bearings and ball bearings for general use	2,645	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity
Changshu NSK Needle Bearing Co., Ltd.
Manufacturing facilities for needle bearings	1,455	Apr., 2006	March, 2008	Upgrading production infrastructure, increasing capacity
NSK Korea Co., Ltd
Manufacturing facilities for automotive bearings	1,187	Apr., 2006	March, 2008	Reorganizing and increasing production, and streamlining operations