Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of change (%)	Factors
Sales	82,018	112,658	(27.2)	1)
Operating Profit	4,885	6,374	(23.4)	-
Ordinary profit	4,713	7,468	(36.9)	-
Current net profit	1,841	3,194	(42.4)	-

Factors
1)
<Japan>
-Sales in Japan were 39,095 million yen, a decrease of 6.7 percent year-on-year. The drop was attributable to a decline in sales of automotive components, as production volumes by Nissan, its major customer, and other automakers dropped.

<North America>
-Sales in North America were 27,531 million yen, a drop of 46.1 percent year-on-year. Some of the major factors to the decrease were reduced vehicle sales and General Motors' filing for bankruptcy amid the weakening global economy, which was triggered by the collapse of Lehman Brothers.

<Asia>
-Although vehicle production in China was in high gear, overall sales in Asia decreased 14.5 percent year-on-year to 21,877 million yen due to a decline in production in Thailand.

Contracts

-Yorozu Automotive Tennessee, Inc. won a body parts program from Hino Motors Manufacturing U.S.A., the Group's first body parts business in North America. The company started supplying the parts in May 2010.

-In September 2009, Yorozu (Thailand) Co., Ltd. started producing products for compact passenger vehicles assembled at a local Ford-Mazda joint-venture company. In February 2010, it also began making components for environmentally friendly vehicles produced by Nissan. These became Yorozu Thailand's first eco-car products.

Recent Developments in Japan

-The Company will map out a new medium-term business plan called the "New Yorozu Success Plan (YSP)" under which it aims to boost its group sales to 150 billion yen and operating profit margin to 6 percent by the year ending in Mar. 2015. The target is nearly double the amount forecasted for this year, which is seeing an unprecedented range of fall in demand. The target is based on the projection that car demand in China and other emerging countries will steadily rise, while that in the U.S., which is a major vehicle market, will come back from a temporary slowdown. The Company will do its best to maintain its workforce and production infrastructure in preparation for the future improvement in the market.(From an article in the Nikkan Jidosha Shimbun on July 22, 2009)

Recent Developments Outside Japan

<Thailand>
-Sales at Yorozu (Thailand) Co., Ltd. (YTC) decreased from those of the previous year, as overall vehicle production in the country fell by 28 percent year-on-year. Sales are expected to be supported by the following programs for new vehicles models. In September 2009, YTC started production of components for compact passenger vehicles assembled at the Ford-Mazda joint venture. In February 2010, it also began producing components for Nissan's environmentally friendly vehicle. This is the first time for the Company to produce products for eco-cars in Thailand.

<China>
-Yorozu Bao Mie Automotive Co., Ltd. (YBM) in China generated record-high revenue from the auto parts business in fiscal year 2009, thanks to strong sales in the internal region of China supported by incentive programs for new vehicles. The Chinese automotive industry is expected to show continued growth, and both Nissan and Honda, the Company's major customers, are working on further expanding their local production in China. In order to cope with expected growth in demand, the Company is planning to establish a new company in Wuhan City, Hubei Province. Operations at this facility are expected begin in the second half 2011.

Business Restructuring

-The Company announced that operations at its U.S. subsidiary, Yorozu Automotive North America, Inc. (YANA), will be suspended and its total production operations will be moved to its another subsidiary, Yorozu Automotive Tennessee Inc. YANA located in Battle Creek, Michigan has been supplying suspension components to GM, Honda, Subaru and Mitsubishi Motors. Given moving of the production of GM's leading model, the Chevrolet Malibu, from the Orion plant in Michigan to the Fairfax plant in Kansas, the Company has decided to reorganize the structure of production in the U.S. in a bid to cut fixed costs and increase production efficiency for improving profitability in its U.S. operations. Consolidation of production in Tennessee is expected to be completed in October. (From an article in the Nikkan Jidosha Shimbun on July 15, 2009)

-In December 2009, the Company dissolved Yorozu Automotive Mississippi, Inc.

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

Outlook for FY2010

(in millions of JPY)

	FY2010 (forecast)	FY2009	Rate of change (%)
Sales	88,000	82,018	7.3
Operating income	5,720	4,885	17.1
Ordinary income	5,350	4,713	13.5
Net income	2,600	1,841	41.2
R&D Expenditure	7,832	4,283	82.9

 

Sales by Major Customer

(in millions of JPY)

	FY2010 (forecast)		FY2009
	Sales	Percentage (%)	Sales	Percentage (%)
Nissan Group	55,135	62.7	50,706	61.8
GM Group	12,899	14.7	11,679	14.2
Honda	6,249	7.1	6,299	7.7
Isuzu	3,700	4.2	3,415	4.2
Toyota Group	3,396	3.9	3,033	3.7
Ford, Mazda	2,835	3.2	2,581	3.1
Suzuki	1,141	1.3	1,259	1.6
Others	2,645	2.9	3,046	3.7
Total	88,000	100.0	82,018	100.0

 

Sales by Geographic Area

(in millions of JPY)

	FY2010 (forecast)	FY2009	Rate of change (%)
Japan	38,421	39,095	(1.7)
North America	30,048	27,531	9.1
Asia	25,936	21,877	18.6

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	1,353	1,722	1,214

R&D Activities

-The Company developed suspension components for new vehicle models by using new materials and introducing innovative designs and production methods. It has applied for a patent for the new technology.

Technological Contracts

(As of Mar. 31, 2010)

Name	Country	Contract coverage	Period
ThyssenKrupp Talent Limited	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
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 2, 2004 - Until production of the relevant vehicle is terminated
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 1, 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 1, 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
		To license out non-exclusive rights to produce rear beams the Company designed and developed for the Suzuki YV4. To sell related production equipment to manufacture these products and dispatch engineers to give technical assistance.	March 1, 2009 - Until production of the relevant vehicle is terminated

Capital Investment

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	4,283	5,080	6,678

-The Company invested 3,305 million yen in Japan, 194 million yen in North America, and 784 million yen in Asia mainly to install facilities to produce products for new vehicle models.

-The Company will increase its capital investment 10 percent to 6.4 billion yen in the 2010 business year, compared with 2009. For all no change in the basic trend of trimmed investments, the supplier will add 2010 expenses not directly related to renovation or expansion of equipment, such as those for relocation of the corporate technology center, which has been postponed due to the slowdown in the economy. The percentage of investments devoted to new models including for die-making has reached 90 percent in 2009 as a result of skipping most of investments for boosting production capacity or renewing equipment, but it will decline to around 70 percent in 2010 fiscal year.(From an article in the Nikkan Jidosha Shimbun on Aug. 24, 2009)

Investments in Japan

-The Company plans to introduce tailored blanks (TB) to its Tochigi plant early next year. As it has won Nissan's orders for suspensions of the next upper-grade FWD model, it will build a new TB-exclusive line also at the Tochigi plant, which has not introduced the TB processes yet. The investment in blanking press machines and welding robots will be held down to less than one billion yen. This will be the Company's sixth plant which will adopt TB, following those in Shonai and Oita in Japan, the U.S., Mexico and China. (From an article in the Nikkan Jidosha Shimbun on July 16, 2009)

New Facilities

(As of Mar. 31, 2010)

Business establishment	Purpose	Planned investment (thousand yen)	Start	Planned completion
Yorozu Automotive Tennessee, Inc. (USA)	Installing facilities for new vehicle models	226	Jan. 2010	Oct. 2010
Yorozu Mexicana SA. de C.V.	Installing additional equipment and upgrading production lines	196	May. 2010	Dec. 2010
Yorozu (Thailand) Co., Ltd.	Installing facilities for new vehicle models	452	Dec. 2009	Dec. 2010
Yorozu Bao Mie Automotive Co.,Ltd.	Installing facilities for new vehicle models	1,256	Jan. 2010	Oct. 2010