27 May, 2021

Remarks by the President at the 18th General Assembly Meeting
Masatoshi Kimata
President,
Japan Land Engine Manufactures Association

Thank you very much for taking time out of your busy schedules to join us today,
on-site and also via web conference.
First, may I again thank you for your continued support and cooperation in the
management of our association.

Here at the occasion of the 18th Ordinary

General Meeting, I would like to make some remarks.
Contrary to expectations, this year's General Meeting was also held with theminimum number of on-site participants in response to the request for emergency
measures against COVID-19.

Thank you all for your cooperation in avoiding the"Three Cs (Closed spaces, Crowded places, Close-contact settings)" by choosing toparticipate via the web today or to exercise voting rights in writing.
According to the monthly economic report released by the Ministry of Internal
Affairs and Communications (MIC) in April, the exports to Asia, including China,
have already started to pick up, and a recovery is expected in machinery
productions and capital investments.

On the other hand, the economy in the U.S.

and Europe is still in a difficult situation due to the re-spread of COVID-19.

Thesituation, however, is expected to gradually improve in these regions with thespread of the COVID-19 vaccination.
Looking to Japan, Prime Minister Suga announced the new social goal of "Carbon
Neutrality in 2050" in October last year, and then the Ministry of Economy, Tradeand Industry (METI) announced the "Green Growth Strategy" in December.

The

policy is required to create a "Virtuous Cycle of Environment and Economy" byreforming the industrial structure and social economy, while taking proactive
measures to address global warming as an opportunity for growth.

Ourassociation will also collect information on measures and technological trends
toward carbon neutrality in internal combustion engines through exchanges withexperts from National Research and Development Agencies and universities, andshare the information with related industries.

Our internal combustion engines play an indispensable role in people's daily lives
like agriculture, construction, flood control, landscaping, urban environmental
improvement, and even power supply and drainage during disasters. In order tofulfill these roles in the future, we continue to pursue the environmental
performance required by the times.
Next, I would like to introduce the production status of our land-use internal
combustion engines. The 2020 annual production forecast for land-use engines
announced on April 1st, 2021, is expected to decrease to 83.0% in Japan and 93.6%
overseas compared to the previous year.

The combined production volume ofdomestic and overseas engines is expected to be 11,911,000 units, 90.5% of theprevious year's production volume.
of significant decrease.

As a result, this is the second consecutive yearWe consider that the reason was due to a drop in

production in Asia, especially in China, caused by the trade friction between theU.S. and China, as well as a temporary drop in production due to lockdowns andplant closures in Europe and the U.S. to respond to COVID-19 that has spread
globally since the beginning of the year.
However, there was an overall recovery trend due to the rapid recovery in China
as a result of containment of the infection, and infrastructure investment policies,
as well as, in Japan, demand for personal equipment due to special cash payments
and demand for emergency generators due to government subsidies, and demand
for gardening due to consumption from staying at home in Europe and U.S, since
the second half of the fiscal year.

As a consequence, the overseas production in

2021 is expected to increase for the first time in five years to be 10,285,000 units,119.1% from the previous year due to a large increase in gasoline engines despite adecrease in diesel and gas engines.

The domestic production is expected toincrease for the first time in three years to be 3,536,000 units, 108.0% from theprevious year due to an increase in diesel and gasoline engines. The total
production volume in Japan and overseas is expected to increase for the first timein three years to be 13,821,000 units, 116.0% from the previous year.
Lastly, I would like to express my sincerity for the continued success and growthof our members.

Thank you.