PIOLAX, INC. Business Report FY ended Mar. 2019

Financial Overview

(in millions of JPY)
FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 Rate of Change (%) Factors
Sales 68,298 67,876 0.6 -Sales in the automotive sector rose due to increased sales worldwide such as in the USA, and emerging countries.
Operating income 9,312 10,220 (8.9) -Operating income fell because of higher costs for raw materials and labor.
Ordinary income 10,321 10,987 (6.1) -
Profit for the year attributable to owners of the parent  7,421 8,126 (8.7) -


Management Plan (from FY Ending in March 2020 to FY Ending in March 2022)

ーAim to create a well-balanced profit structure based on three major regions: North America, China and the Asian region. Diversify based on various aspects such as regions, products, customers, and businesses to achieve the following targets.

  • Consolidated sales: JPY 72.0 billion (sales outside Japan: JPY 49.0 billion, or 68%)
  • Consolidated operating profit: JPY 11.0 billion; operating profit margin: 15.3%
  • ROE: 10% or higher

Specific indices:

  • Regional breakdown: North America, ASEAN, China, Europe: 3:3:3:1
  • Product breakdown: fuel, closure/opening mechanisms, fasteners, drivetrains, harnesses=3:7 revised to 4:6
  • Non-Japanese OEM sales: 20%


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


Business Policies

<North America>
-Aim to achieve operating profit margin of 10% by the FY ending in March 2022.

-Launch of operations at new heat-treatment plant in January 2019.

-Advance hose clamps, metal fasteners, fuel-system parts, localization.

ーGrow business with Nissan, Honda, and GM.

-Expand sales to the USA Big Three and Hyundai (current state outlined below).

-Expand production facilities and equipment at nearby buildings and purchase nearby land.

-Aim to increase sales in the FY that ends in March 2022 to 30% over sales recorded in the fiscal year that ended in March 2020. Operating profit margin to 20%.

-Established Shanghai Piolax in January 2019 to strengthen sales network.

  • Piolax, Inc. (Piolax) will establish a wholly-owned sales headquarters in Shanghai, China in 2019. The new headquarters will control all of Piolax’s sales offices in China to improve the efficiency of promotion and sales activities in the country, where demand for automotive parts is growing. As set out in its mid-term business plan for the three years from April 2018, Piolax aims to raise the ratio of sales in China to 36% (6 percentage point higher than the figure of FY 2017). The company is also considering joining the Chinese electric vehicle market. The new sales headquarters will have branch offices in Guangzhou, Wuhan, and Tianjin. In the future, it will control production in China, and manage business from sales to production. (From an article in the Nikkan Jidosha Shimbun on September 26, 2018)

-Increase sales of fuel-system parts that comply with Chinese environmental regulations; and increase sales to electric-vehicle companies to respond to new-energy vehicles.

-Install additional facilities and equipment at Wuhan Piolax.

  • Piolax, Inc. (Piolax) will start production of automotive drive system parts at its plant in Wuhan, Hubei Province, China, in order to respond to increasing demand from local automakers. Together with its existing plant in Dongguan, Guangdong Province, the company will have two drive system plants in China. The total investment will be about JPY 430 million, and production is scheduled to start in January 2020. Piolax plans to quadruple its sales (mainly of drive system parts, fuel system parts, and electrification parts) for Chinese automakers in the fiscal year that ends in March 2022 (FY 2021) from the results of FY 2018. The company increasingly receives orders for drive system parts, such as snap rings (retaining rings) and transmission retainers. Since the existing plant in Dongguan is not able to meet demand, new production lines for drive system parts will be installed at the company’s existing plant in Wuhan. The Wuhan Plant will produce for customers in northern and eastern China, and Dongguan Plant for southern regions. (From an article in the Nikkan Jidosha Shimbun on June 26, 2019)

ーDouble the amount of sales recorded in the FY that ended in March 2019 by the end of the FY that ends in March 2022. Operating profit margin 6%.

Piolax, Inc. (Piolax) will strengthen its product development function in India. The company’s new design development center, which opened this spring in Delhi, India, will function as a regional development center for Asia and the ASEAN region. In addition to joint development with Japanese and local manufacturers, the company will provide support for the development bases in Japan, the U.S., and China as well. Piolax puts much weight in India as a growth market. This time, the company will enhance its development function to make a full-scale entry into the Indian market, aiming to significantly expand its sales in the country by 55% in 2020 from 2017. (From an article in the Nikkan Jidosha Shimbun on October 11, 2018)

ーConduct activities to increase sales to Maruti Suzuki, Hyundai, Tata, Mahindra, and Ford.

ーRespond to tightening environmental standards and regulations in India

-Increase the amount of sales recorded in the FY that ended in March 2019 by 5%, by the end of the FY that ends in March 2022. Operating profit margin 7%.

-Reduce the labor force through further automation; and strengthen framework to advance local procurement in order to improve profitability.


Recent product developments

Fuel-system parts

ーDevelop products that comply with tightening environmental regulations outside Japan.

"2K Parts"

-In order to comply with fuel-permeation regulations in Europe, the Americas, and China, develop valves for plastic fuel tanks that further prevent fuel permeation by being formed in two colors. The Company is delivering them to more and more models such as the Toyota Prado and Surf; the Hyundai Accent; the Kia Pride and Forte; the Mazda Axela (North America), and the Renault Samsung SM6.

Openers/Closure Mechanism Parts

-Plan to further expand business globally, especially in North America, and especially spring cushions.

"Spring cushion"

ーA new part that is fastened inside the glovebox, which combines rubber, plastic, and a spring.
Mitigates the clunking sound when the vehicle is traveling, which is caused by rubber loss. Reduced deformation of the glovebox, improving operability.
Mountable on all vehicle models. Planned to be delivered to EVs and HEVs that require noiseless cabin interiors.

-Mounted on the following models:

  • Daihatsu Move, Cast, Mira e:S
  • Toyota C-HR
  • Honda CR-V (North America)
  • Subaru Impreza
  • Lexus UX
  • Suzuki Jimny
  • Mitsubishi Delica:D5


ーCombining metal and plastic. Delivering drivetrain parts and precision cover terminals to the Nissan Note and Serena, and batteries to the Nissan Leaf.

Initiatives for Next-generation Vehicles
-Established a project team to better respond to CASE (connected, autonomous, shared, electrified)


R&D Expenditure

(in millions of JPY)
FY ended Mar. 31, 2019 FY ended Mar. 31, 2018
All 549 580
Automotive sector 530 524

-Piolax, Inc. will look into alternative materials for PA66, a raw material for plastics parts, to deal with surging PA66 prices. The supplier will start switching to inexpensive alternative materials for parts that are not required to have high heat resistance, a characteristic of PA66, in fiscal year 2019 (ending in March 2020) and step up efforts to find reasonable materials overseas. By doing this, it will aim to halve the decrease in profit expected for FY 2019 owing to soaring material prices. Piolax will be replacing PA66 with inexpensive materials that offer the required functions for wiring harness routing clips and other parts that consume large amounts of PA66. For instance, in the case of wiring harness routing clips, PA66 is indispensable for engine room uses that require high heat resistance, but the company will be replacing PA66 with PA6, polypropylene, and other inexpensive alternative materials for other uses such as indoor parts that do not require high heat resistance. (From an article in the Nikkan Jidosha Shimbun on June 18, 2019)

Capital Investment

(in millions of JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018
Automotive sector 5,005 1,919


Investment in Japan

-Piolax, Inc. (Piolax) will strengthen its production and development systems in Japan. The company will relocate and reconstruct its main Maoka Plant (Tochigi Prefecture), and reconstruct its Yokohama Technical Center (Kanagawa Prefecture). Piolax will concentrate its investment on the enhancement of manufacturing in the country in order to achieve sustainable growth as set out in its mid-term business plan for the three years from April 2018. The company acquired about 33,000 square meters of land next to the Maoka Plant, and set up a renewal project team. Piolax will start construction of the Maoka Plant in the fiscal year that ends in March 2020 (FY 2019), and operations in FY 2023. The investment for the new plant will be about JPY 4 billion from FY 2018 to FY 2023. The company will start reconstruction of the Yokohama Technical Center in FY 2019 to start operations in FY 2022. It will invest about JPY 3.5 billion for the technical center from FY 2018 to FY 2022. (From an article in the Nikkan Jidosha Shimbun on June 18, 2018)