Financial Results Briefing for Q1 FYE March 2023
July 29, 2022
AISIN CORPORATION
Q1. The full-year business forecast remains unchanged. I think that tax
cuts are expected in China and raw material costs can be passed on
to customers. Considering these factors and the foreign exchange
impact, is there any chance that you will revise the forecast upward?
A1. Regarding the factors for upward revision, we can expect tax cuts in China,
but it is necessary to explore the scale and timing. I think that your comment
about raw materials refers to Toyota’s decision not to ask suppliers for cost
reduction in the second half of this fiscal year. We separate cost reduction
activity from passing rising prices of raw materials on to customers. We havethoroughly assessed the increase in burden on our suppliers, small andmedium-sized suppliers, in particular, and we are currently asking OEMs toshare the burden. We hope to settle this within Q2. The situation remains
unchanged from three months earlier, so we did not revise our full-yearbusiness forecast.
SQ1. The fixed cost in Q1 seems to have increased sooner than thefull-year forecast. Is this as planned?
SA1. The fixed cost has not increased sooner. It is as planned and will notincrease significantly more.
Q2. Regarding the sales expansion of electric drive units, do you have an
update on orders for FY2025 and beyond?
A2. Most orders until FY2025 are from Toyota Motor and remain unchanged.
The third-generation eAxle to be launched in 2027 is extremely small, highly
efficient, and cost-competitive. We think this product can differentiate us
from our competitors. We will use this product to get orders from otherOEMs.

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SQ2. Is there any chance of getting orders for discrete components,including motors and gears?
SA2. We will convey the virtues of the system to customers who want tobuy discrete components. Many makers are developing eAxle
systems and we will propose our products as a system.
Q3. What do you see for future fluctuations in production volume? Have
production volume in Toyota and the production volume of AT for
China and Europe been stabilized since three months ago?
A3. The impact of the lockdown in Shanghai was beyond the scope of ourassumption, but the shortage of semiconductors has become more stable
after the past year of struggling with production fluctuations. We haveexperienced some small drops in the operational rate due to lightning strikes
and water restrictions in the Mikawa area in this fiscal term, but a rapid
production decrease like the one in September last year has not occurred.
Stock and demand for Chinese OEMs remain unchanged and we willcontinue monitoring them. For European OEMs, including VW, ourproduction volume will vary depending on their allocation of securedsemiconductors to their vehicle models.
Q4. What specific action will you take for fluctuations in production
volume? Will it improve profitability?
A4. Our main action is minimizing losses due to production cuts. We promoted
close communication with our customers and suppliers, and we are now
more flexible in manpower arrangement according to fluctuations inproduction volume.
SQ4. Do you also maintain close communication with other OEMs as
you do with Toyota?
SA4. We are communicating with other OEMs, but Toyota provides us withinformation in a more timely manner, so we can respond to Toyota
more quickly.

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Q5. The operating profit for Q1 was 6.6 billion yen. How do you evaluate
the result against the initial plan? What was your initial operating profit
forecast?
A5. Sales decreased due to the impact of the lockdown in Shanghai, but we
benefitted from the effect of the weak yen and also reviewed fixed costs
according to the reduced sales. This resulted in 6.6 billion yen operating
profit.
SQ5. Which segment was affected the most by the decline inproduction volume at Chinese customers?
SA5. Production was distributed. Despite the lockdown in Shanghai,production volume was maintained by adjusting the volume in Japan.
Q6. Will you share the production of electric drive units with Toyota, likeAT?
A6. OEMs need to input resources in battery production. So, if we can show ourcompetitive edge in drive units, we think there is a chance that Toyota canentrust us with the production of drive units more than for AT.
SQ6. Do you mean you will make sufficient investment to expand thesales of electric drive units?
SA6. Yes. However, someone has to do the remaining production of AT. Inthis sense, we may not make investment in full equipment but use
existing equipment effectively to carry out production.
Q7. The net sales for Q1 decreased by 22 billion yen. This decrease isrelatively larger than the decrease in the net sales excluding theforeign exchange impact by 40 billion yen. Why is that?
A7. Sales include the foreign exchange impact as well as an increase in thematerial quotation prices revised from the first half of this fiscal year. So, theactual decrease in net sales was even greater. The cost reflects losses due
to production cuts. After factoring in these impacts, a decrease of 22 billion
yen is not high.

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Q8. The full-year business forecast remains unchanged. Does this meanthat the forecast is achievable as of today?
A8. If the yen remains at the current level, we can achieve the forecast even
without a recovery of production in Q2 and beyond. Market conditions for
raw materials, including aluminum, became more stable. We hope to reflect
the rising prices of raw materials within Q2. Only three months have passed
since April, so we will keep monitoring fluctuations in production volume tohave greater accuracy in forecasting, and then may revise the forecast
upward as needed. We set the current target of 190 billion yen based on ayear-on-year increase in profit and will make sure to take measures if it
becomes difficult to achieve the target.
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