Midterm Strategy and Target towards Sustainable Growth
October 31, 2019

Kiyotaka Ise,
President of Aisin Seiki Co., Ltd.

Midterm Target for FY2024
FY2020 at the bottom, We will target for over 7% Operating Profit Rate on FY2024(trillion yen)
5

Sales of CASE product
Sales of existing products
Operating Profit Rate
ROE

12%

410%8%

36%
24%
102%

FY2017 FY2018 FY2019 FY2020

FY20240%* FY2024 : Fiscal year From April 2023 To March 2024

1Midterm Business Plan - Progress of Priority Issues
Promoting the measures for keen sense of crisisPriority issue

Growth strategy

Development of CASE
products and expansion of
their sales

Management foundation for the future

Present situation

 Demands for the electrification products and orders
are increasing steadily.
 Automated driving technologies is developed with
Aisin Group’s key devices.

 Determination of the Management Integration of
Aisin SEIKI and Aisin AW

Scrap & Build work with noexceptions

 Identifying the non-profitable products to be
scrapped for allocating the development resources

Fixed cost reduction

 Identifying the items (in 74 companies and 100bases) that can be integrated functionally andstarting the implementation phase

Strengthening
company structure2Electrification Strategy of the Aisin Group

Expansion of the Sales of Electrification Products
Lineup of products responding to various needs for electrificationeAxle
HVダンパー

Electric drivetrain

Cooperative
Regenerative
Brake System

Hybrid transmission

Damper for hybrid vehicles

Grill shutter

Thermal management

Electric pump

Flow Shutting Valve3

Aisin Group’s CASE StrategyExpansion of the Electrification Products Sales

Production of Electric drive units （HV, eAxle））（10Kunits)

250

Accumulated total
number of units

600

Accumulated total
number of units

3.70 million
units

300

10.9 million
piecesGlobal share

50200

Global share（FY 2019）11％％
16 17 18 19 20（10Kunits)

Production of Dampers for hybrid vehicles（10Kpieces)24

Accumulated total
number of units

74％％
16 17 18 19 20（FY）

Production of Electric pumps

2500（FY 2019）100

24 （FY）（10Kpieces)

Production of Cooperative Regenerative Brakes

300

Accumulated total
number of units

36.1 million
units

1000

Global share

13 million
piecesGlobal share100（FY 2019）（FY 2019）

500

47％％
16 17 18 19 20

24 （FY）57％％
16 17 18 19 2024（FY）

4

Aisin Group’s CASE Strategy

History of Development and Production of Drive Motors

Start of motor
production
Number of pieces
produced(ten thousands ofpieces/year)

2,000
400

1,000
100

High speed motor
Rectangular wire
Induction motors
Gear-integrated
rotor shaft
Compact
magnetic rotor

Cassette coiling
methodCumulative
number of pieces(ten thousandsof pieces/year)

10,000Oil cooling withcentrifugal
injection

Cumulative total:
Approx. 7 million
pieces500

5,000

Supplier Sector

World Highest
Production Results(Source: Aisin Seiki)

0‘08‘20'08 ‘09'09 ‘10'10 ‘11'11 ‘12'12 ‘13'13 ‘14'14 ‘15'15 ‘16'16 ‘17'17 ‘18'18 ‘19'19 '20

0‘26 (FY)'265

Aisin Group’s CASE Strategy

Growth Strategy for Electrification
Gathering strengths of the Toyota Group and offering Systems to the customers in the world

Established customer channel
Customers relationship

Motor

GearboxInverter＊Customers of AT business

Gathering human resources and speeding
up interchanges for improving designs

Many inquiries are received fromcustomers due to one stop solution forelectric driving vehicle

6

Aisin Group’s CASE Strategy

Growth Strategy for Electrification
Increasing sales sharply with various products, technological strength, and customer channel

Electrification product sales plan2020

Launching eAxle for Toyota Motor’s EVs(100Myen)

5,00002019

2024 (FY)

C-HR

IZOA

7

Aisin Group’s CASE Strategy

Supply Structure Expansion
Global expansion for sales promotion of electrification products
Increasing production of electric drive units in Japanand China

Increasing production of Cooperative Regenerative
Brakes around the world< 2-motor hybrid transmission >China (From Sept. 2019)Japan, North America,
China< eAxle >Japan, China (from 2020)
Japan
China

NorthAmerica

ASEAN
Increasing to two plants by constructing a newplant in Texas
Increasing production of electric pumps around the world< Production items >Japan, North America,
China, Thailand

AT (initially)
HV (planned)
8

Aisin Group’s CASE Strategy

Initiative for Automated Driving“More Safety” “More Comfort” “More Convenience”
Awareness/Recognition

Priority
Approach

Approaches of AISIN Group2

All-around camera
Long-distance sonar

Assessment

Implementation
Implements vehicle dynamics.

■Low-speed area

Trajectory (Drive plan)
tracking controlPractically moves the vehicle.

Powertrainto drive

Automated driving in a
low-speed area

High-accuracy map
Infrastructure cooperation

Steering wheel
to turnPriorityApproach

1Vehicle dynamics control

Driverinformation

Ensures the vehicle
safety.

Cab monitoring

CloudBrake
to stop

Trajectory (Parking plan)
tracking control■High-speed area
LiDAR, etc.

Adaptive cruise control…

Lane keep / Lane change

Suspension
to provide ride comfort

9Aisin Group’s CASE Strategy

Priority Approach (1) Cabin Monitoring
AISIN Group aims to expand sales with over 10 years-production experience.
Development history of Driver Monitor System (DMS)Entering the Business-to-Businessmarket with a strong need toUnder
prevent accidents

Marketscaledevelopment

2019
DMS linked with a drive recorder

Launching high-performance
DMS for automated driving

Underdevelopment

2020 (scheduled)
DMS for automated driving

Legislation
on going

World-first commercialization
2006- : Face direction and open/closed
eye detection DMS

Applicable to point addition
under the Euro NCAP
Automated driving
2005

2010

2015

2020

2025

10

Aisin Group’s CASE Strategy

Priority Approach (2) Automated Driving in a Low-speed Area

Key systems

AISIN Group steadily advance the development of key components
toward automated driving in a low-speed area to achieve the evolved
automated parking.
Theworld’sfirst (2003)

Intelligent
Parking Assist

Automated Parking

Automated Valet Parking

Platform

Key components

2003- No steering operation required.
Rearview guide monitor

2019- No accelerator and brake operation required.
autonomous emergency braking(AEB)

Electric parking brake

20×××× - No shift operation required.
Shift-by-wire

11

Aisin Group’s CASE Strategy

Priority Approach (2) Automated Driving in a Low-speed Area
Automated parking

Shift-by-wireEasy operation

Production
quantity

Cumulative
production quantity

Production
quantity(ten thousandsof pieces/year)

500(ten thousandsof pieces/year)

No shift operation required
Cumulative
production quantity

1,000

400

40200

20Cueing

0'16'17'18'19'20

Autonomous emergency braking

0'26 (FY)Suppression of acceleration due toerroneous stepping on pedal
Cumulative
production quantity

Production
quantity

200

1,000

(ten thousandsof pieces/year)

0'16'17'18

Electric parking brake'19'220'26 (FY)No parking operation required

Production
quantity

Cumulative
production quantity(ten thousandsof pieces/year)

20,0003,000

1005001,000

Cueing

0'16'172,000'18'19'200(FY)'26Cueing

0'16'17'18'19'200'26 (FY)12

Aisin Group’s CASE Strategy

Growth Strategy for Automated Driving
Increasing sales sharply with various products, technological strength, and customer channel
Automated driving product sales plan
FY 2020

Adoption of a new automated parking technology
for the use for TOYOTA YARIS(100Myen)

2,000

1,00002019

2024 (FY)13

Aisin Group’s CASE Strategy

Approach to Connected Cars and Shared Services
AISIN Group provides services and contents staying present to people andsociety with connected technologies and in-vehicle systems.

Social data Personal information
 Vehicle information
 Environmental
information

Open data

Big dataanalysis

 Location data
 Map information

Vehicleinformation

Driver’s condition,
driving conditions, etc.

Contents“Advanced technology cultivated by carnavigation”

Mobility support

Location- based information
utilization platform(Connected technology)

Life support▶ Forwarders・Retailers・Mobile operators・Parking lot operators・Carsharing operators
Component logistics
supportStore logistics supportNavigation

Demand responsive
transport

Optimal operation plan

Optimal store chart

LINE car navigation

Choisoko▶ Taxi business operators・Individual owners・MaaS operators
Risk avoidance
supportCab arrangement

Opening arrangement

Access monitoring

Safe driving guide

Remote seat arrangement

Barrier-free access

Lifeguard unit/IMS

Carnavigation

AT/HV/EV

IMS/DMS

Suspension

Power sliding door

Brake

Infrastructure
supportIn-vehicle systems▶ Government and municipal offices
Information sales

Information sales

Road maintenancesupportRoad maintenancesupportFlooding point
information

Slippery point
information

Stepped point
information

Hole point information

14

Efforts for Strengthening Company Structure

Optimization of Fixed Cost
Detailed Action Plan for achievement of the goal
Target of reducing the fixed cost
(except development and depreciation costs)

Fixed cost
increasing alongwith increase ofsales

More than
10% reduction

Action Plan
• Management foundation for the future(Integration of Aisin SEIKI and AISIN AW)• Scrap & Build work with no exceptions• Fixed cost reduction

2020

2024
On course・・・

2024
(FY)

15

Change from Federal Management to Group Management

Management Integration of Aisin SEIKI and Aisin AW
Integration of Aisin SEIKI and Aisin AW
Integration
Steps(1) Aisin AW itself acquires all of the Aisin AW shares owned by TOYOTA(2) Integration of Aisin SEIKI and Aisin AW on an equal basis (April 1, 2021)

BeforeAfterIntegration（39.65％）

(2)
・・・

Group
company

Groupcompany

Groupcompany

・・・

(1)

・・・

Group
company

GroupcompanyGroup・・・company

16Change from Federal Management to Group Management

Improving Efficiency of Management Cost by Integration
Improving efficiency thoroughly by integrating the inefficient management
departments of the Federal Management• Gathering and Integrating the administration functions such as accounting,personnel, general affairs, etc.
• Gathering and Integrating the production management functions such as
R&D, Production Engineering, Production Control, Quality, etc.
• Reducing the maintenance costs by integrating the business operationsystems• Elimination of sales and purchase function related to transactions between
these companies

Target amount ofeffect in FY 2024

30 billion yen17

Change from Federal Management to Group Management

Integration Synergy in Business
Strengthening competitiveness and proposal for CASE by integration

Casting★

〇

Main body VVT, EWP

Plastic molding〇ControlSheet metal press★

★

Cold forging〇★

Heat treatment★

★

Cutting〇★

Surface treatment★

Bonding〇〇

Commercial Passenger

Assembly〇★

Commercial Passenger

Facilities〇〇

InverterControl★: Market’s top technology〇: Technology possession

Neworganization

Powertrain
Procurement
function

Procurement
function

Promoting improvement ofbusiness operations’efficiency
Enhancing centralizedpurchase

Procurement planning
function

Aisin AW

Integrating two companies’ procurement
functions (from November)

Functional integration

Aisin SEIKI

Logistics

Improving productivity byeliminating duplication and mixing
up

AisinAW

Main body Commercial Passenger
TransmiSpeedssion
Commercial Passenger
control
Main body Commercial Passenger
Motor

ProductionAisin
SEIKI
EngineProcurement

Productionengineering

Development

Improving development capabilities andabilities to make proposals by utilizing theexisting technologies and information
throughout the integrated companies

Electronics
Body
Chassis &Safety
Motor

Enhancing procurementof core products
Improving quality ofsuppliers

18Efforts for Strengthening Company Structure

Business Scrap & Build Work
Identifying the non-profitable products to be scrapped for allocating the development
resources

4.7%

6.0%

6.3%

5.4%

5.3%

Improving efficiency
by developing
digitallyShifting mobilized
resources to priority
development
themesConventional
product
development
Advanceddevelopment
CASE
development

FY2018FY2020

FY2024

20%

40%

50%

Ratio ofCASE

Development cost

Development
cost to sales
ratio

As is19

Efforts for Strengthening Company Structure

Establishment of Lean Management Structure
Identifying the items (in 74 companies) that can be integrated functionally andstarting the implementation phase
Targetcompanies

Improving
efficiency ofadministration

Eliminated/Co
nsolidated
among
companies/bases

Japan

19
companies

6 items

11 items

NorthAmerica

17companies

3 items

3 items

China14companies

1 item8 items

Asia andAustralia15companies

Europe3companies

2 items

Others6companies

1 item3 items

Total74
companies

15 items

37 items

Example: Improving efficiency byintegrating the functional companies
Integration of the software development
companies in the GroupElectronic information VC（One Team））

Integrated new company

2 items

3 items
Aisin SOFTWARE Co., Ltd.

9 items

Target amount ofeffect in FY 2024

Outsourcing companies,
overseas OS

Outsourcing companies,
overseas OS

6 billion yen

20

Efforts for Strengthening Company Structure

Establishment of Lean Management Structure
Reviewing all the business operations and improving efficiency thoroughly
Shortening largely the time for development andproduction preparation

Improving efficiency of transportation byutilizing cross docks

Promoting digital development
ConceptualdesignDetailed
designProcessdesign

MolddesignReducing the logistics cost and the rent

Production

Virtual evaluation using MBD

Cargo pickup

Enhancing collaboration by using the 3D data in theprocesses from designing to production
Enhancing production engineering’s CAE(completing processes on the basis of modelbase)
Shortening the time for development and production preparation
by utilizing the 3D data being consistent from designing toproduction preparation and the simulation technologies
Others:Introduction of automatization tools and IT
technologies, etc.

Delivery

Customer

Customer

Improving the loading
efficiency byconsolidating thetransport routes
Reducing thewarehouse expenses

CustomerOthers:

Review of company dormitory and residence
operation method, etc.

21

OverallFor Achievement of the Midterm Business Plan
FY2020 at the bottom, We will target for over 7% Operating Profit Rate on FY2024(trillion yen)
5

Sales of CASE product
Sales of existing products
Operating Profit Rate
ROE12%

410%
8%

36%
24%
102%

FY2017 FY2018 FY2019 FY2020

FY20240%22