Financial Overview

in million yen	FY2006	FY2005	Rate of change (%)	Factor
Sales	119,310	109,642	8.8	While the parts sales for Nissan Motor decreased, those for other customers increased.
Operating Profit	4,445	3,631	22.4	The profit and income increase resulted from the cost reduction and productivity improvement activities driven by promotion of the production revolution.
Ordinary income	4,540	3,853	17.8
Current net income	3,035	2,395	26.7

Contracts
- The Company won business from Honda to supply rear suspension parts for the automaker's next generation global strategic vehicles scheduled for releases in countries including Mexico and China in 2007. The business will mark the first time that Yorozu will supply products to Honda from its Mexican plant. In order to boost its capacity to support the contract, the supplier will soon complete the construction work for reinforcing its stamping and welding lines, investment for which is estimated to reach approximately 1 billion yen. After dissolving its capital alliance with Nissan Motor Co., Ltd. in 2003, Yorozu has been striving to increase businesses with GM of the U.S. and Honda Motor Co., Ltd. leveraging its cost competitiveness. Although the name of the car model is undisclosed, the rear suspension products are likely to be mounted on the all new Accord to go on sale in the autumn of 2007. (From an article in the Nikkan Jidosha Shimbun on Dec.12, 2006)

- The Company received orders from GM Holden of Australia for the front suspension mounted on the carmaker's mid-sized Commodore, beginning the shipment this autumn. Yorozu expects this new contract will contribute to pushing up its annual sales above 1.5 billion yen for the full fiscal year 2007. Yorozu will supply suspensions from its plant in Thailand, because it has no production site in Australia. This is the second order that Yorozu has received from Australian automakers following Mitsubishi Motors Australia Limited (MMAL, located in the suburb of Adelaide). This time GM Holden, holding the top share in the country's passenger car market, chose Yorozu in recognition of the supplier's experience with GM in North America. Yorozu will supply front suspensions for the Commodore, a mid-sized model based on the Opel Omega, which is one of mass-produced models in Australia together with the Toyota Camry and Ford Falcon. (From an article in the Nikkan Jidosha Shimbun on Nov.15, 2006)

R&D expenses amount to 1,327 million yen in FY2006. Technological Contracts (as of March 2006)

Name	Country	Contract coverage	Period
Thyssen Krupp Automotive Talent chassis	UK	The Memorandum covers the supply of front suspensions for the GM Ypsilon, upon which Thyseen Krupp will pay fees to Yorozu contingent upon the volume of business it wins for the suspensions..	May, 2000 - Until production of the Ypsilon in Europe is terminated
		To license (on a non-exclusive basis in the UK)  assembling and manufacturing technology and know-how on bar crosses and lateral links for compact passenger cars (new Primera model) manufactured at UK Nissan.	Feb., 2001 - Until production of the Primera is terminated
Yuan Hua Shin Yeh Co., Ltd.	Taiwan	To license (on a non-exclusive basis)  assembling and manufacturing technology and know-how on front suspension members for passenger cars (Nissan Sunny and Pulsar) manufactured at Yulon motor.	Jul., 1999 - April 2006 ??roduction completed?飲/td>
Yutaka Giken	Japan	To license (on a non-exclusive basis in the UK) assembling and manufacturing technology and know-how on front lower arms for SUV's that Unipart Utica Systems (a subsidiary of Utaka Giken) supplies to Honda UK.	Feb., 2001 - Feb., 2007 ??ompleted?飲/td>
Tongkwang Preceision Machine, Co., Ltd.	Korea	To license assembling and manufacturing technology and know-how non-exclusively in the area of front suspension members, transverse links, rear suspension links etc. for passenger cars manufactured by Renault- Samsung Motors (the Nissan name is Teana).	March 2004 - Until production of the Teana is terminated
DK Austech Co., Ltd.	Korea	To license (on a non-exclusive basis) assembling and manufacturing technology and expertise on front suspension members, transverse links and rear suspensions for passenger cars manufactured at Renault Samsung. (The passenger car is known as the Teana in Japan.)	March 2004 - Until production of the relevant vehicle is terminated
Thyssen Krupp Automotive Talent chassis	UK	Contract to nonexclusively provide technologies and know-how in UK for production and assembly of front suspensions, lateral links, and transverse links for a small passenger car model (Almera) manufactured in Nissan Motor Manufacturing (UK)	January 2000 - November 2006 ??roduction completed?飲/p>
Auto chassis International	France	The Contract covers various business activities for rear beams for passenger cars (the YN2 and the YN3) manufactured by Suzuki in France and in Europe. ACI is in charge of design and development of the relevant part and Yorozu is in charge of production engineering, preparatory work for mass-production and production activities in Japan. ACI has given Yorozu a non-exclusive license.	January 2003 - Until production of the relevant passenger cars is terminated
		The Contract covers various business activities for rear beams for a passenger car (the YN5) manufactured by Suzuki in China. ACI is in charge of design and development of the relevant part and Yorozu in charge of production engineering, preparatory work for mass-production and production activities in China (YBM). ACI has given Yorozu a non-exclusive license.	May 2005 - Until production of the relevant passenger car is terminated
Jay Bharat Maruti Ltd.	India	To sell dies and equipment to JBML relating to rear beams for the Suzuki YN4; to provide technical assistance through dispatching engineers and other means.	Seven years from  January 4, 2005

Capital investment in FY2006 totaled 10,098million JPY.

Capital investments
Mexico:
The Company will launch a new production line at its plant, YMEX, in Mexico within FY 2006, mainly to respond to requests for production increase from its major client, Nissan Mexicana S.A. de C.V. (NISMEX). As it has improved the space efficiency by review of the existing lines, expansion of the building is not necessary. Approx. 300 million yen investment, however, is expected to introduce new facilities as welding robots. Yorozu Mexicana S.A. de C.V. (YMEX) in Aguascalientes, Mexico, was established in February, 1993 and currently operates the following facilities: two tandem press lines with nine 200-ton, four 400-ton and one 800-ton class stamping machines; other press lines with four blanking press machines of 200 tons and 400 tons, which cut the steel sheets according to sizes of products, and two transfer press machines of 500 tons and 1500 tons, which carry out several processes of stamping with one unit; 200 assembly robots which weld stamped parts together; and one electro-deposition coating (cation) equipment.(From a story in the Nikkan Jidosha Shimbun on May 19, 2006)

China:
The Company will reinforce its stamping lines at its Chinese plant by fiscal 2007. The company will begin a full-fledged production for Nissan's joint venture with a Chinese auto manufacturer, Dongfeng Motor Co., Ltd. or Dongfeng Nissan in Huadu, Guangzhou, later in fiscal 2006. But in fiscal 2007, the company will be supplying the parts to the joint venture for a full year term and possibly become incapable of meeting the demand by using current facilities alone. Yorozu, therefore, will make an additional investment of approximately 800 million yen in order to introduce some tandem stamping machines for the lines to produce its main components, suspension members, and expand production facilities for other parts including links and bushings. (From a story in the Nikkan Jidosha Shimbun on Apr. 27, 2006)

Thailand:
The Company plans to increase the production capacity of its Thai plant, Yorozu (Thailand) Co., Ltd. located at Eastern Seaboard Industrial Estate in Rayong, by investing 4.3 billion yen within this fiscal year. It will enlarge its plant building by 1.5 times and will install a new production line in order to respond to the growing orders from local Japanese automakers. The company will increase production capacity to fill new suspension orders from Nissan Motor Co., Ltd. for several models including small cars and SUVs to be launched in Thailand. It will also invest in the existing production facilities to achieve higher product quality. With this investment, production volume at the Thai plant will be raised by approx. 70% by the end of this fiscal year. The plant building under construction will be extended from the previous 21,000 sq.m. to approx. 30,000 sq.m.(From a story in the Nikkan Jidosha Shimbun on Apr.24, 2006)

New facilities at a glance

Business establishment	Purpose	Planned investment (thousand yen)	Start	Planned completion
Submitting companies
Oyama Plant (Tochigi Pref., Japan)	Facilities for new vehicle models	787	April 2007	March 2008
Nakatsu Plant (Ohita Pref., Japan)	Facilities for new vehicle models	1,174	April 2007	March 2008
Shonai plant (Tsuruoka city, Yamagata prefecture)	Facilities for new vehicle models	732	April 2007	March 2008
Subsidiaries
Yorozu Automotive Tennessee, Inc. (USA)	Replacement of plant facilities	426	Feb. 2007	Dec. 2007
Yorozu Mexicana SA. de C.V.	Expansion of plant facilities, etc.	436	Feb. 2007	Dec. 2007
Yorozu Bao Mie Automotive Co., Ltd	Facilities for new vehicle models	1,829	Feb. 2007	March 2008