2024 (2024) 'LEMA New Year Greeting'Japan Land Internal Combustion Engine Association
Chairperson Masatoshi Kimata

Happy New Year!
As we welcome the new year of 2024, I would like to extend my New Year'sgreetings.
First of all, regarding global economy and market trends surrounding the engine
industry since last year, although the COVID-19 has subsided (downgraded to Class
5 infectious diseases), the outlook is highly uncertain due to the impact of the global
credit squeeze, concerns about the Chinese economy prospect, the prolonged
situation in Ukraine, and the situation in the Middle East.
Our association celebrated its 75th year anniversary last May 2023. As the mostimportant activities of this fiscal year, LEMA has promoted the following three major
points on the agenda as the most important activities of this fiscal year: (1) updating
the scenario for carbon neutrality, (2) publishing the 75th year anniversary
magazine “LEMA's 75 Years of Progress and Future Prospects in Statistics”, and (3)moving LEMA office due to the aging of the building.
(1) As part of our efforts to achieve carbon neutrality, in March last year, weupdated the land use engines Carbon Neutral Scenario, which we created andpublished on our website two years ago.

In this scenario, we estimatedelectrification will increase depending on the application, but the internal
combustion engines will be essential in non-electrified areas. Last year, at the 23rd
Technical Forum 2023, hosted by LEMA, we gave lectures on OME, a synthetic fuel,and e-fuel, which is synthesized from hydrogen and CO2, to deepen discussions oncarbon neutral fuels. E-fuel and hydrogen, which are considered carbon neutral, stillhave many issues in terms of supply and cost. We will continue to gather
information while exchanging opinions with each energy industry and discuss with
our members to brush up on the carbon neutral scenario of the industrial engine
segment.
(2) The 75 year anniversary magazine is on schedule to be published within thisfiscal year. We hope that you will be able to understand the future prospect fromthe perspective of social trends and industry trends over the last 10 years.
(3) Regarding the relocation of the LEMA office, the new office has also been
decided and the relocation is scheduled for February this year. We expect tocontribute further to the industry from the new office after the move from thecurrent 61-year-old building.

12024 (2024) 'LEMA New Year Greeting'Japan Land Internal Combustion Engine Association
Chairperson Masatoshi Kimata

Next, I would like to explain the production results of the land use engines handled
by LEMA last year. LEMA publishes its monthly production results on our website.
The year before last, from January to December 2022, total domestic and overseas
production totaled 13.37 million units (91% year-over-year), a decrease of
approximately 10% from 2021 (14.7 million units), when production recovered
significantly amid the COVID-19 pandemic. From January to September 2023, total
production was 8,157,000 units (79% year-on-year). The breakdown was
6,541,000 gasoline engines (76%), 1,536,000 diesel engines (96%) and 79,000
gas engines (100%). If production continues at this pace, total production is
expected to fall below 11 million units for the first time since 2002, reaching
10,875,000 units (81% year-over-year) from January to December 2023.
Amid of major changes toward carbon neutrality, significant changes has emerged,
particularly in gasoline engines.
Also, regarding carbon neutrality, which I mentioned earlier, I believe that fuel,that can achieve carbon neutrality, and further efficiency increase of the internal
combustion engine itself will continue to be our major themes. I hope that you willcontinue to support us as we share information among our members, relatedorganizations, universities, and research institutes, to make internal combustion
engines carbon neutral.
Last but not least, I would like to express my heartfelt for a good 2024 for all of
you and wish you all the best for your continued prosperity and happiness.

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