Automotive Battery Business
Briefing
Friday, March 15, 2024
GS Yuasa Corporation
GS Yuasa International Ltd. Automotive Battery Business Unit

© 2023 GS Yuasa International Ltd. All Rights Reserved.

1

C ontents
1. Outline of Automotive Battery Business3• Business Overview• Products• Business Performance

2. Market Trends

8• Demand Trends• Market Share Trends

3. Medium- to Long-term Strategy

17• Strategic Approach• Outline of Individual Strategies© 2023 GS Yuasa International Ltd. All Rights Reserved.

2

C ontents
1. Outline of Automotive Battery Business3• Business Overview• Products• Business Performance

2. Market Trends

8• Demand Trends• Market Share Trends

3. Medium- to Long-term Strategy

17• Strategic Approach• Outline of Individual Strategies© 2023 GS Yuasa International Ltd. All Rights Reserved.

3

1 Automotive Battery Business Overview⚫ Business Overview
We are engaged in the development, production, and sales of lead-acid batteries for use in automobiles, motorcycles, etc.
In Japan, we operate as a manufacturer, while overseas, we are engaged in direct export sales and other operations
centered on management and support of overseas sites.

<Development, production and sales in Japan>Japan• Development and production at 4 domestic plants• Sold to car manufacturers and replacement customers• Net sales of approx. 95 billion yen and a high market share<Overseas sites management and direct export sales>• 18 sites worldwide• Provide technical and development support, etc.
Overseas• Net sales of approx. 250 billion yen
4

2W Others
3%
5%
Net sales
4W
92%

Others
20%
4W
Net sales 57%
2W
23%© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is an overview of the automotive battery business.
We are in the business of developing, manufacturing, and selling lead-acid batteries forautomobiles, motorcycles, and other vehicles.
In Japan, we operate as a manufacturer, while overseas, our business focuses on management
and support of manufacturing and sales bases, including direct export sales.
In Japan, development and production are carried out at four plants.
The Kyoto Plant is headquartered in Kyoto, the Gunma Plant is located in Isesaki, Gunma, theOsadano Plant is located in Fukuchiyama, Kyoto and the Hamanako Plant (GS Yuasa Energy,
hereafter GYE) is located in Kosai, Shizuoka.
The company sells its products to new car manufacturers and replacement customers, withsales of approximately 95 billion yen.
It has a domestic market share of approximately 51%.

Overseas, we have 18 bases around the world, including manufacturing and sales bases.
It provides technology and development support, with sales of approx. 250 billion yen.
Global market share is about 7%.

4

1 Automotive Battery Business Overview⚫ History of Automotive Batteries
GS (Japan Storage Battery)Inventor’s spirit
contribute to society
by developing highquality products
Founder of Japan Storage Battery Co., Ltd.
Genzo Shimadzu

1917:

1919:

1954:

Establishment of Japan
Storage Battery Co., Ltd.

Start of automotive leadacid batteries production

Marketing of small and light Establishment of first overseas site
batteries for motorcycles
in Thailand (Siam GS Battery Co., Ltd.)

1966:

2004

Corporate
Merger
1918:

1920:

1954:

1963:

Establishment of Yuasa
Storage Battery Co., Ltd.

Start of automotive leadacid batteries production

Marketing of small and light Establishment of first overseas site
(Yuasa Battery (Thailand) Pub. Co., Ltd.)batteries for motorcycles

2009:

2015:

2022:

Marketing of European
Norm (EN) lead-acidbatteries

Conversion Turkey site
to a consolidated
subsidiary

2016:

2023:

Acquisition of lead-acid
Development of lead-acidbatteries business frombatteries for vehicles
with start-and-stop systems Panasonic Corporation(ISS: idling stop systems)

Conversion two subsidiarycompanies in China to an
equity-method affiliate

Challenging spirit
develop new
businesses ahead oftime
Founder of Yuasa Storage Battery Co., Ltd.
Shichizaemon Yuasa

YUASA (Yuasa Corporation)5© 2023 GS Yuasa International Ltd. All Rights Reserved.

In 2004, Japan Storage Battery Co., Ltd. and Yuasa Corporation merged to form GS Yuasa.
Both companies have been leading the industry with their respective inventive andchallenging spirit for 100 years and continue to do so today.

5

1 Automotive Battery Business Overview⚫ Products
Lead-acid batteries for automobiles

Batteries for general passenger cars Batteries for ISS vehicles

Auxiliary batteries (for HEVs)

Batteries for heavy-duty vehicles(trucks, buses, etc.)

Environmental Contribution

Lead-acid batteries for motorcycles

Other uses

Structure of lead-acid batteries
Electrolyte
Solution

Construction
machines

Agricultural
machines(H2SO4)

Anode

Open cell batteries(Pb)

VRLA batteries

Vessels
6

Cathode (PbO2)© 2023 GS Yuasa International Ltd. All Rights Reserved.

These are the products handled by our automotive battery business.
They are mainly used to start engines for automobiles, and in recent years, for auxiliary use forelectric vehicles ("EVs") and hybrid electric vehicles ("HEVs"), as well as for a wide range ofother engine vehicles such as trucks, buses, construction machinery, and agricultural
machinery.
For motorcycles, both liquid-type open and sealed valve regulated lead-acid (VRLA) systems
are available, with VRLAs becoming the mainstream in recent years.
Regarding the structure of lead-acid batteries, they are composed of lead and lead alloy
electrodes and dilute sulfuric acid.
It is a very high material cost product that is completed with a final charge.
The ratio of raw materials is approximately 65% lead, 10% resin, and 25% other components.

For auxiliary equipment for HEVs and EVs, they are specially designed and installed in thetrunk of the car or under the seat.
These batteries are used in 12V systems such as HEV systems, EV startup, navigation, power
windows, door locks, etc.

6

1 Automotive Battery Business Overview
Corporate
MergerFirst Medium-termManagement Plan
(FY2006-FY2008)

Second Medium-term Third Medium-Term
Management Plan
Management Plan
(FY2010-2012)

Fourth Medium-Term
Management Plan

(FY2013-2015)(FY2016-2018)

October 2016
Acquisition of lead-acidbatteries business from
Panasonic Corporation

Fifth Medium-Term
Management Plan

Sixth Medium-Term
Management Plan

(FY2019-2022)(FY2023-2025)

April 2022
Conversion Turkeysite to a consolidated
subsidiary

October 2023
Transfer of Chinasite of equity
Net sales

335.1
billion yen

342.0
billion yen

340.0
billion yen

Operating income(Before amortizationof goodwill)

Net sales

142.5
billion yen

19.9
billion yen

24.5
billion yen

24.0
billion yen

Operating income-0.7
billion yen

2004

2010

2020
7

2022

2023 Forecast

2025 Target(Fiscal year)© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is the performance transition of the automotive battery business after the corporate merger.
For the first three years after the integration, we were engaged in general production and sales
activities with a broad lineup of products to maintain the existing customer system.
Therefore, the situation was so severe that it is said that the automotive battery business was in
the dark ages because it was not profitable.
Sales rose in 2007, but this was due to a sharp rise in the price of lead, a raw material.
This surge in lead prices accelerated the turnaround of the business and the shift from quantity
to quality.
Although sales declined from 2007 to about 2010, the domestic business began to improve as aresult of structural reforms, including the consolidation of models and a shift from quantity toquality, in response to the decline in physical volume.
In line with the restructuring of our business strategy, we also changed our marketing strategy toconcentrate on value-added products for replacement batteries.
In addition, sales have steadily expanded since then, due in part to increased demand overseas.
There was a major turning point in 2016.
In Japan, we took over Panasonic Storage Battery Co., Ltd. In addition, we promoted mutual
collaboration in the production technology development field.
In 2022, the Turkish site will become a consolidated subsidiary, completing the reinforcement of
the production and supply base that has been a challenge in Europe.
This has strengthened our supply system both domestically and internationally.
On the other hand, in 2023, from the viewpoint of business selection and concentration, weconverted our China base to equity method.

With net sales of 342.0 billion yen and operating income of 24.5 billion yen for the current fiscal
year, we are moving forward with our business to exceed the final year (FY2025) targets of the
Sixth Mid-Term Management Plan, which are net sales of 340.0 billion yen and operating incomeof 24.0 billion yen.
7C ontents
1. Outline of Automotive Battery Business3• Business Overview• Products• Business Performance

2. Market Trends

8• Demand Trends• Market Share Trends

3. Medium- to Long-term Strategy

17• Strategic Approach• Outline of Individual Strategies© 2023 GS Yuasa International Ltd. All Rights Reserved.

8

2 Market Trends
For automobiles: Forecast of global vehicle volume
Ownership forecast of automobiles

Sales forecast of new automobiles(million units)(million units)
2000

140

1,769
120
100

89

1500

98

94

0

1,491

1,522

32
1,059

62

1,229

1000

24

58

60

1,369

27

40
20

1,466

46

80
60

1,655

114

110

1,362

1,354
311

500
15

22

19

221

38

12

15

18

2023

2024

2025

EVs

57

HEVs

0
2030

internal-combustion
vehicle
ICE

2035

63
33
2023

81
48
2024
EVs

the rest

102
65

205

2025

2030

HEVs

ICE
internal-combustion
vehicle397
2035
the rest

Note: Prepared by GS Yuasa based on materials⚫ Sales of new electric vehicles will increase, with EVs accounting for about half of new automotive sales in 10 years.
⚫ In terms of the ownership, EVs will gradually increase mainly in developed countries and China,
but will only account for about 20% of the total in 10 years.
9© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is a forecast of the number of vehicles globally for automobiles.
There is no doubt that sales of electric vehicles will increase in new automobiles sales.
Although EVs could account for about half of the total in 10 years, we see the possibility thatthe ratio of EVs to HEVs could be 50-50, which is fluid.
The total number of new vehicles is expected to increase from about 90 million to about 114
million, with a steady increase in the volume of new automobiles.
As for the number of vehicles owned, EVs will gradually increase, especially in developed
countries and China, but we assume that even 10 years from now, EVs will account for about
20% of the total.
The total number of vehicles owned is assumed to increase from approximately 1.5 billion in
2023 to approximately 1.8 billion in 2035.

New automotive sales of EVs are expected to grow, especially in Europe, China, and North
America, where there are many vehicles, but looking at the recent situation, we expect thatgrowth may slow down due to many issues such as resources and infrastructure.
We make this assumption because electrification is greatly influenced by the policies of eachcountry.
While electrification will continue in developed countries and China, we assume that internal
combustion engine vehicles ("ICEs") will remain in the rest of the world and that the number
of ICEs owned will not decrease significantly.
Therefore, we assume that the demand for lead-acid batteries for starting ("SLI") and auxiliary
equipment will not decrease significantly even in 2035.
9

2 Market Trends
For automobiles: Global battery demand forecast (starting and electric vehicle auxiliary batteries / excluding for drive force)
Estimated demand of batteries for automobiles for starting and auxiliary batteries (million units)
■Lead

700
600

601
18

581
1

589
2

598
4

580

587

594

583

2023

2024

2025

2030

■LiB
579
41

500
400
300

538

200
100
0
2035
Note: Prepared by GS Yuasa based on materials⚫ Since electric vehicles are often equipped with lead-acid batteries as auxiliary batteries, we assume that the demand for lead-acidbatteries will not decline at an accelerated pace.
⚫ The change in battery demand depends on factors other than vehicle electrification, such as population (licensed population)
increase or decrease, infrastructure and policies in each country, etc.
10

© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is the global demand forecast for batteries for automobiles.
We assume that demand for lead-acid batteries will remain mostly flat, at approximately 580
million units in 2023 and even 580 million units in 2035.
There will also be some demand for 12V LiBs that are not for driving.
Electric cars are equipped with lead-acid batteries for auxiliary equipment.
We do not expect demand for lead-acid batteries to decline at an accelerated rate.
The increase or decrease in battery demand, other than vehicle electrification, also depends
on population increase or decrease, infrastructure development, and policies of each country.
Electrification does not = LiB conversion but exists for auxiliary equipment.
Whether 12V for auxiliary equipment will be lead or LiB will be considered by new car
manufacturers, but considering cost, recycling, and ease of use, it is unlikely that all 12V will
be LiB since lead-acid batteries are easy to use.
Thus, we believe that lead-acid batteries will continue to be the mainstream, although theshift to LiBs will continue with certain level.

102 Market Trends
For automobiles: Battery demand forecast by main region (starting and electric vehicle auxiliary batteries / excluding for drive force)■Lead

Europe
100

96
0

97
1

90
9

China

78

150

30

19
50

96

96

111
1

100

109
2

97
6

81
59

110

50

107

87
11

91

26

26

2025

2030

2035

21
2

20
26

26

10

77

0

40

20

32

32

35

35

42
0

42

2030

2030

2023

2025

45

2035

130

121
2

24

19

50

128

130

119

95
5
90

2030

2035

2023

2025

2030

2035

ASEAN
40

Australia
10

2025

128

0

2035

46
1

0
2023

2025

150
100

0
2023

India

(million units)

North America

25
1

0
2023

■LiB

Japan

5

6
0

7
0

6

7

2023

2025

8
0
8

9
0

9

26
0

26
0

25
1

26

26

24

2023

2025

2030

21
2

20

19

0
2035

0
2030

2035

Currently, due to the End-of Life Vehicles Directive,
etc., the conversion of lead-acid batteries to lithiumion batteries will increase mainly in Europe.
However, the use of lead-acid batteries for
auxiliary batteries in electric vehicles is still themainstream. We estimate that it will take time tosolve the issues of generalization to self-driving cars,
diffusion of recharging infrastructure, recycling, andraw material procurement.
Note: Prepared by GS Yuasa based on materials

11© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is the global demand for batteries in major regions.
We believe that Europe will be the main area where demand for lead-acid batteries will decline.
We expect a decline in North America, where manufacturers such as Tesla are strong, but we
expect to see major changes, such as a change of government.
In Japan, the decline in the number of license holders due to the low birthrate and aging
population will have a significant impact, and we believe that the use of automobiles will alsochange due to car sharing and other factors.
We assume that Japan will be able to reap stable demand with a slight but steady decline.
We expect demand for lead-acid batteries in ASEAN and Australia, our main markets, to bestable and firm.

The market is expanding in India and in China in terms of volume, but the market will be a
hurdle for foreign companies, including business practices, so we will have to take a hard look at
the market.

11

2 Market Trends
Share: estimated share of automotive lead-acid batteries by major region (FY2022)●China●Europe
GY
6%Aggregate
demand96●Other
GY
4%●IndiaAggregate
demand110

GY
3%Aggregate
demand31●All over the world

GY
Aggregate
demand 37%
30

Aggregate
demand25

GY
0%Aggregate
demand
128

GY
51%

As GS Yuasa group, our business is based on local
production for local consumption, mainly in Japan,
ASEAN countries, and Australia.
In addition, by having a manufacturing andsales base in Turkey, we will also promote sales
expansion not only to our European bases but also
to North Africa and the Middle East.

●Australia
GY
34%
Aggregate
demand7GY
7%Aggregate
demand574●North America●JapanGY
4%● ASEAN

Aggregate
demand145(aggregate demand: million units)□Sales Volume Weights of GS Yuasa (for automobiles)
Japan, 30%

China, 10%
12

ASEAN, 26%

Australia, 5%
Europe, 13%

India, 2%
Other, 14%Note: Based on the
Company research© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is our market share of lead-acid batteries for automobiles in major regions.
Our group is based on community-based business with local production for local consumption,
mainly in Japan, ASEAN countries, and Australia.
Local production for local consumption means selling lead-acid batteries in the area where
they are actually manufactured, and doing business within the area that reaches from thearea where they are manufactured.
By having a manufacturing and sales base in Turkey, we will not only supply our European
bases, but also promote sales expansion to North Africa and the Middle East.
China is unlikely to see a decrease in market share as the management rights have beentransferred to a Chinese partner, which will be more closely tied to the local market.
As I mentioned earlier, we will concentrate our resources in ASEAN, Europe, Australia, andJapan.
We will also expand sales to Africa and the Middle East, using Europe as a gateway.

12

2 Market Trends
For motorcycles: Forecast of global vehicle volume
Ownership forecast of motorcycles

Sales forecast of new motorcycles(million units)(million units)
800

80
68

70
60

700

63
52

53

632

597

601

600

20
2023

25

32

65

92

2024

2025

2030

2035

500

40

54
47

47

627

400

56

300

47

585

200

20
10
0

626

600

53

50

30

719
650

616

5

6

6

9

12

2023

2024

2025

2030

2035

electriccar
Electric Cars

1000electriccar
Electric Cars

internal-combustion
vehicleICE

internal-combustion
vehicleICE⚫ Motorcycle sales are projected to increase, especially in India.
⚫ Motorcycle is often used as everyday transportation, and we estimate that electrification is limited to corporate customers.
13© 2023 GS Yuasa International Ltd. All Rights Reserved.

Assumed volume of motorcycles.
We expect motorcycle sales to increase, especially in India.
Market size is smaller than that of automobiles.
Sales volume will range from 52 million units in 2023 to 68 million units in 2035. The numberof cars owned will range from about 620 million to 720 million.
With the exception of Europe and the United States, motorcycles are used as a means oftransportation for daily life by users, especially in Asia, and we assume that the electrificationof motorcycles will be limited to corporate applications.
It is our view that electrification of motorcycle is more difficult than for automobiles.
Lithium life is another challenge for two-wheeled electric vehicles. It does not have thelongevity of automobiles and is used heavily. The life expectancy is less than 5 years.
In the Asian region, it is common for scooters and 125cc motorcycles to carry three or four
passengers, and it is also common for them to be overloaded for transporting luggage.
Another factor is that they are used in harsh conditions for batteries, as they are subjected toconsiderable repetition of stop-and-go traffic due to heavy congestion.

13

2 Market Trends
For motorcycles: Global battery demand forecast (starting and electric vehicle auxiliary batteries / excluding for drive force)
Estimated demand of batteries for motorcycles for starting and auxiliary batteries (million units)

■Lead

■LiB

400
350
300

321
2

302
1

305
1

305
1

302
2

301

304

304

300

320

2023

2024

2025

2030

2035

250
200
150
100
50
0

⚫ Demand for motorcycles is mostly for daily use in non-developed countries such as ASEAN and India, and it will take time for the shift
to electric vehicles to take off.
⚫ In addition to the limited space for batteries in two-wheeled electric vehicles, there are still many issues to be addressed, such as theneed for small size, flexibility in shape, and cost advantages.
14© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is a global battery demand forecast.
Demand for motorcycle batteries is expected to increase slightly.
We are looking at an increase of about 7%, with about 300 million units in 2023 and 320
million units in 2035.
We assume that there will be demand for 12V LiBs in 2030-2035, but that it will not increasemuch.
Demand for motorcycles is mostly for use as daily footwear in non-developed countries such
as ASEAN and India, and we do not see any advantage for electric vehicles.
We believe that there are still many issues to be overcome, as battery mounting locations arelimited and difficult to design.
Demand for lead-acid batteries for motorcycles is not expected to change rapidly, and we do
not expect a significant decrease in the quantity of lead-acid batteries.

14

2 Market Trends
For motorcycles: Battery demand forecast by main region (starting and electric vehicle auxiliary batteries / excluding for drive force)
Europe

10

5

12
0

11

11
0

10

■Lead

China

15

71
0
9
1

7

2030

2035

71

72

63
0

61
0

2

63

60

1

0

0
2023

2025

2023

2025

2030

2
0

2
0

2

2

India

100
50

102
0
102

106
0
106

6
117
0

132
0

117

2023

0
2025

2030

2035

5
0

5
0

5
0

5
0

2

5

5

5

5

2023

2025

2030

2035

60
55

2023

North America
1
0

1
0

10

1

1

5

7
0

7
0

7
0

7
1

7

7

7

6

2025

2030

2035

2023

2025

2030

2035

0

4

ASEAN
132

(million units)

0

2035

Taiwan
150

■LiB

Japan

50

8
1

8

72
0

50

53
0

54
0

55
0

0
54
0

53

54

55

54

2023

2025

2030

2035

45

15

Demand for starting 12V lithium-ion batteries islimited mainly to Europe and the United Statesand is unlikely to increase in other regions.
Regarding the flow from lead-acid tolithium-ion batteries market due to theelectrification of motorcycles, since it is mainly
for corporate customers, the impact in the
ASEAN region, our main customers, is still small.

© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is the battery demand forecast by major region.
By region, the trend is similar to that for automotive batteries, but in Europe, where interest inlead restrictions is high, 12V LiBs are also expected to increase for new motorcycles, anddemand for lead-acid batteries is also expected to decline.
In ASEAN and India, where demand for motorcycles is high, lead-acid batteries are themainstream and demand will increase.
For reference, Gogoro, a Taiwanese electric scooter manufacturer, has a problem that leadacid batteries for motorcycles are difficult to convert to LiB because of battery complaints,
heavy infrastructure costs and difficult quality control, and many technical challenges.
In North America, the market is flat without much volume and is used entirely for pleasureuse, so there is no fluctuation in terms of demand, and we do not expect a major shift to LiBs.

15

2 Market Trends
Share: estimatedEstimated share of lead-acid batteries for automobiles
motorcycles by
by major
major region
region (FY2022)(FY2022)●Europe
GY
14%Aggregate
demand12●Other
GY
8%Aggregate
demand48●ChinaAggregate
demand49●IndiaGY
4%Aggregate
demand101●North America●JapanGY
0%Aggregate
demand
2

GY
43%

GY
24%
Aggregate
demand7●Taiwan● ASEAN

Aggregate GY
demand 50%
61●All over the world

Aggregate GY
demand 99%
5

GY
17%
Aggregate
demand285(aggregate demand: million units)□Sales Volume Weights of GS Yuasa (for motorcycles)
Japan, 2%

In the motorcycle battery business, we have arelationship with Japanese car manufacturers andhave a high market share in Taiwan and ASEAN
countries. In Europe and the U.S., we also have ahigh market share and we have been able todemonstrate a certain level of brand capability.
The main issue is to establish an optimal
supply chain with ASEAN bases as the
manufacturing bases.
North America, 4%

Taiwan, 10% India, 9%

ASEAN, 64%
16Europe, 3%
Other, 9%© 2023 GS Yuasa International Ltd. All Rights Reserved.

Our market share in major regions.
Our market share is high outside of China and India.
We will continue to strengthen our supply chain, particularly in the ASEAN region.
Batteries manufactured in ASEAN are also sold in Europe and the United States, and the
supply chain will be strengthened for this purpose.
We believe that the Indian market, like the automotive battery market, is a market with highhurdles for foreign companies, and therefore, careful decisions are necessary.
Unlike automotive batteries, the YUASA brand is highly recognized in North America.
In North America, we have a base for manufacturing motorcycle batteries and have a certain
presence there, which we will further expand.

16

C ontents
1. Outline of Automotive Battery Business3• Business Overview• Products• Business Performance

2. Market Trends

8• Demand Trends• Market Share Trends

3. Medium- to Long-term Strategy

17• Strategic Approach• Outline of Individual Strategies© 2023 GS Yuasa International Ltd. All Rights Reserved.

17

3 Sixth Mid-Term Management Plan
⚫ Evolution of Automotive Lead-acid Batteries
Motorization▼
Starting, lighting andelectric power

Reduction ofload on vehicle▼
EXP lattice increase

ISS vehicles increase▼
Charge acceptance
performance

HEVs and EVs increase▼
Auxiliary battery
function

Period of increasing demand

Period of price competitionin mass production

Period of value-added
performance competition

Period of price competition
due to overproduction

Automobile stages vary by region and country⚫ History of GS Yuasa's Policy✓ Evolve batteries and accumulate know-how based on the development of Japanese automobiles✓ Expand business sites globally in tandem with market size and expansion (local production for local consumption)⚫ GS Yuasa's Strengths✓ Development, manufacturing, and know-how of batteries matched to vehicles✓ Cooperation with overseas partners, especially in ASEAN✓ Sales network of distributors and other agents in each region
18

Formation ofbrand strength© 2023 GS Yuasa International Ltd. All Rights Reserved.

Regarding the development and evolution of lead-acid batteries for automobiles, we have been working
together with new car manufacturers in the development of their vehicles.
SLI functionality was the main focus during motorization in the 1960s, but later expanded for mass
production and cost reduction, and production efficiency was required in the 1980s and 1990s.
At the timing of the shift to expanded production, companies began mass production, resulting in pricecompetition and lower prices. This is where each battery manufacturer entered the path to profitability.
Around 2010, ISS vehicles were introduced as environmentally friendly vehicles, and the value of leadacid batteries increased due to the need for improved charge acceptance performance and durability. We
recognize this as a major turning point.
This is the timing of the start of selling batteries with value-added performance.
In the replacement battery market, we had been developing models for which demand usually occurs
several years after new car sales, but when ISS vehicles were introduced, the company shifted its strategy
to a value-added route by introducing batteries with improved charge acceptance performance in thereplacement market ahead of the competition as a new marketing strategy.
It was a time when the competitive field shifted from the price arena to the value-added arena.
Prius HEVs started to sell in 1997. At that time, we sold JIS-standard VRLA batteries, but due to the waveof global standards, we developed EN (LN) standard auxiliary batteries starting in 2015, which are now
the mainstream batteries.
Since each country region has different vehicle stages in this way, we have promoted production andsales matched to each country and region.
We have evolved batteries and accumulated know-how based on the development of new automobilesof Japanese car manufacturers.
In addition, we have been expanding our business globally in tandem with the expansion of the market
size, and have been promoting business based on local production for local consumption.
In this context, our strengths are;・Development, manufacturing, and accumulation of know-how in battery matched to vehicles
・Cooperative relationships with overseas partners, particularly in the ASEAN region. In particular, wehave strong partnerships with Thailand and Indonesia
・Service and support will be developed through a sales network of distributors and other sales agents ineach region
These have led to the formation of our brand strength.

18

3 Sixth Mid-Term Management Plan
Value ofbattery

Factoring in regional
characteristics and profitability

Product quality
Product
performance
ServiceAccumulated assets from the past
▼▼

•
•
•
•
•

High market share in ASEAN
Focus on highly profitable sites
Segments of four-wheeled and two-wheeled
Local production for local consumption
Streamlining and efficiency

Brand
strength

Responding to
Risk•Electrification in progress•

Intensifying price competition

Visualization and enhancement of unique areas of GY✔ Improve brand value of technical knowledge, know-how, services, etc.
✔ Improve profitability through efficient management✔ Strengthen BCP and supply system by optimizing production system and supply chain
19© 2023 GS Yuasa International Ltd. All Rights Reserved.

I would like to discuss the Sixth Mid-Term Management Plan.
We would like to maximize the visibility of our accumulated resources and further brush up
our brand value to drive the market.
As the value of batteries, we will strive to improve our brand strengths in each country andregion by polishing our assets accumulated from the past, such as product quality, productperformance, and service, as brand strengths and by fostering brand loyalty.
Demand for lead-acid batteries is not expected to decline significantly.
In this environment, we expect our production volume to increase and we will have an evengreater responsibility to supply the market.
With the recent wind disasters and conflicts in many countries, BCP responses are not waiting
for us.
Therefore, we will continue to improve our production system.

19

3 Sixth Mid-Term Management Plan
⚫ Positioning of the Sixth Mid-Term Management Plan
We aim to become an "innovative and well-established company" by clearly stating and spreading the value of ourexistence and expanding our earnings based on our assets, "lead-acid battery technology development capabilities" and"sales channels, partners, and services". The Sixth Mid-Term Management Plan period is "a period for strengthening themanagement foundation" for this purpose.
Laying the groundwork for increased earnings andefficiency in the lead-acid battery businessTransformation into a business❶st-FY2025
that can secure stable earnings⚫ Theme❷nd-FY2028
Restructuring management⚫ Themestructure and visualization
Expansion of earning rate
and polishing strengths
and evolution and⚫ Points
penetration of unique value✔ Improvement in operating income ratio✔ BCP promotion✔ Visualization of strengths

Target for FY2025⚫ Points✔ Creation of brand value✔ Completion of BCP promotion system✔ Promotion of management efficiency⚫ Japan : Net sales of ¥100.0 billion yen and operating income of ¥7.0 billion⚫ Overseas : Net sales of ¥240.0 billion and operating income of ¥17.0 billion

Transformation into an "innovative
and well-established company”❸rd⚫ Theme-FY2034

Earning solid revenues
Model establishment andcontinuation⚫ Points✔ Strengthening of revenue base
✔ Considering next business model✔ Selection and concentration20© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is the positioning of the Sixth Medium-Term Management Plan.
We will enhance our value based on our assets of "lead-acid battery technology development
capabilities" and "sales channels, partners, and services".
We use the term "innovative and well-established," and in this position we will make ourpresence known to the market.
This Sixth Mid-Term Management Plan is positioned as a "period for strengthening themanagement foundation" for this purpose.
We have divided the last 10 years into three phases, and as the 1st step, we will transform thecompany into a profitable management structure.
The final year targets of the Sixth Mid-Term Management Plan are sales of 100.0 billion yen
and operating income of 7.0 billion yen in Japan and sales of 240.0 billion yen and operating
income of 17.0 billion yen overseas, and we will exceed these targets in FY2023. We will aim
to further increase sales and profits.
Most recently, profitability in the domestic business is expected to improve significantly due inpart to a correction in selling prices in the new automotive business.
We will also promote the establishment of a BCP system.
Regarding overseas, we will implement selection and concentration.
In the next Seventh Mid-Term Management Plan, we aim to complete the establishment of a
BCP system, or production system.
In the 3rd step after 10 years, we aim to be in a position to acquire solid earnings under thecompletion of the BCP system.
20

3 Medium to Long-Term PlanJapan
⚫ Creation of roadmap for
optimal production system⚫ Develop strategies by region
and individual company• Concentrate strategy especially on ASEAN• Optimization and stabilization of supply
chain• Development of joint strategy with
Industrial Batteries and Power Supplies
Division• Sales expansion in the replacement market• Establishment of a production systemwith an eye to the future• BCP Promotion• Promotion of manpower saving⚫ Improve profitability of sales of
new automotive batteries• Promotion of fair selling prices• Promote activities linked to the market for
replacement⚫ Restructuring of marketing forsales of replacement batteries• Restructuring of marketing strategy⚫ Sustainable Management• Improve global management efficiency• Promote production efficiency andrationalization• CSR Promotion
Reform management structure andstrengthen profitability for the future
due to selection and concentration

Establishment of optimal supply system
responding to changes in the businessenvironment and improvement of earning rate

Overseas21© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is the policy in Japan and overseas in the mid-term management plan.
In Japan, we believe that the role we will be expected to play in the future is supply
responsibility.
In terms of countermeasures against wind disasters that occur every year in Japan, we willbuild a BCP system, prepare for the future, and improve production efficiency.
We will also promote activities to improve profitability in sales.
The challenge is to establish an optimal production system that responds to changes in thebusiness environment and to improve profitability.
Our market share for new automobiles is nearly 70%.
In Japan, our role is to fulfill our responsibility to supply.
Overseas, we will formulate and develop strategies by region and country, with a focus on
strengthening measures in ASEAN and Europe.
Since some of the other locations are engaged in the industrial battery and power supply
business, we will promote measures in cooperation with the Industrial Battery and Power
Supply Division.
We will reform our management structure and strengthen profitability for the future throughselection and concentration.

21

3 Medium to Long-Term Plan
⚫ Priority Issues (Japan)New
automobiles

Marketing reconstruction

Profitability improvement

Replacement• Restructuring of marketing strategy• Efficient operation of business
management• Expand sales of high value-added
batteries• Improvement of profitability byappropriately reflecting raw material
prices, etc. in selling prices• Creating a revenue-generating systemlinked to the replacement market,
12V lithium-ion batteries, etc.
Creation and starting of
optimal production system
Production proposal• Establishment of optimal production
system plan for the future

We will plan immediately to establish our strategies forthe new car society such as declining birthrate, aging
population, young people‘s shift away from cars, etc.
In addition, we also establish a system andstructure for earning revenue.as we reduce supply risk
for the growing needs of new car manufacturers for us.

✔ Establishment of stable production andsupply system✔ Rapid response to demand fluctuations✔ Promote rationalization and efficiency

22© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is a priority issue in Japan.
For new automobiles, the imperative is to improve profitability.
We will improve earnings by reflecting appropriate selling prices for raw materials, etc., further
expanding the replacement market, and creating a mechanism for earning profits linked to 12V LiBs.
For replacement, we will establish an efficient management structure by further expanding sales ofhigh value-added batteries, restructuring marketing strategies, and efficiently operating business
operations, including rationalization.
In terms of production, the challenges are to establish an optimal production system and to respondto BCP.
To build an optimal production system with an eye to the future, we will establish a stableproduction and supply system, respond quickly to demand fluctuations, and promote rationalizationand efficiency.
In addition, we will establish a system that allows us to manufacture models for new automobiles at
any of our locations.
We will work to eliminate production imbalances between plants and reduce logistics risks.
For models for new automobiles, we supply only products from the determined and certified
factories.
For example, products manufactured at the Osadano Plant are delivered to new car manufacturers
as exclusive products. Even if the same product is manufactured at the Gunma Plant, it cannot be
supplied from the Gunma Plant.
We believe that "anywhere production" should be promoted from the standpoint of BCP as well as
eliminating production imbalance by establishing a system that enables supply to new car
manufacturers from any production base as "anywhere production.”In the future, we will hasten to formulate strategies for a new car society due to the declining
birthrate, aging population, and young people's shift away from cars.
We recognize that the first and foremost task is to respond to the growing needs of new car
manufacturers for our company and to create a mechanism to earn stable profits while reducing
supply risks.
22

3 Medium to Long-Term Plan
⚫ Priority Issues (Overseas)
ASEAN ; Automotive batteries

In the automotive battery business, we will strengthen
our competitiveness by promoting enhancement andstreamlining of the production system, centered on theThailand site. We also promote sales expansion toneighboring countries and build a solid structure in leadacid batteries business in the ASEAN region.
In addition, we will further strengthen our brandstrength that we have built with our partners.

▶

• Expansion centered on the Thailand
site• Expansion of production capacity andefficiency• Expansion to neighboring countries▶

In the motorcycle battery business, mainly at theIndonesian site, we will sublimate global andstable supply chain into something solid.
We also strengthen its activities rooted in themarket by maximizing the use of wide range of
product lineup, overwhelming production volume,and brand strength.

ASEAN ; Motorcycle batteries
•
•
•
•

23

Focusing on the Indonesia site
Stabilization of supply chain
Cost reduction
Capturing demand in Vietnam© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is a priority issue overseas (ASEAN).
For automotive batteries, we will continue to expand our operations with our bases in Thailand
and Indonesia as the core. We will also expand our production capacity and efficiency, and expand
to neighboring countries.
Currently, we are expanding our production capacity to 5 million units per year in Thailand. Next,
we are moving forward with the expansion of our production capacity to 6 million units per year.
At the same time, we will promote labor saving and automation to expand production capacity andimprove efficiency.
As for expansion into neighboring countries, we will use Thailand and Indonesia as hubs to expand
sales to Malaysia, Cambodia, Myanmar, and Vietnam.
We will continue to expand production of automotive batteries, mainly at our bases in Thailand
and Indonesia, and we will also use these hubs to expand sales in neighboring countries in the
ASEAN region.
In addition, the GS Yuasa Asia Technical Center in Thailand will be fully utilized to shorten andlocalize product manufacturing and development.
For motorcycle batteries, we will focus on our Indonesian base.
We currently produce and sell approximately 20 million units in Indonesia. We will work to reduce
costs by stabilizing the supply chain, and to reduce labor and automate facilities.
We will also capture demand from Vietnam, which is expected to expand significantly in the future.
We are currently producing and selling 6.8 to 6.9 million units per year in Vietnam, and are looking
to expand further.
23

3 Medium to Long-Term Plan
⚫ Priority Issues (Overseas)
EuropeIn Europe, in addition to the existing sales sites, withthe consolidation of a production site in Turkey in
FY2022, we aim to gain residual profit by expanding
sales due to prompt supply of products to North
Africa and neighboring countries.
In addition, our European sites have focused on
industrial batteries in the past. We are working tostrengthen activities to ensure profitability as a site.

▶

• Automobiles: Expand sales to Europe,
North Africa, and the Middle East
• Motorcycles: Optimization of global
Supply Chain• Electrification: Expand sales ofindustrial batteries▶

In Australia, we will create added value and increase
the value of our presence in Australian society, basedon the original marketing strategy (Made in Australia)
promoted under the COVID-19.

Australia• Promote unique marketing in Australia✓Product strategy of “Made in Australia”✓Production capacity expansion✓Strengthening of unique services

24© 2023 GS Yuasa International Ltd. All Rights Reserved.

This is a priority issue overseas (Europe and Australia).
In Europe, in addition to GS Yuasa Battery Europe Ltd. as a conventional sales base, we willpromptly supply products and expand sales to neighboring countries such as North Africa by
establishing a production base in Turkey, which will be consolidated from FY2022.
In addition, our European bases have been focusing on industrial batteries in the past, and wewill continue to expand sales of these products in Europe and Africa. This is a battery forforklifts.
In Australia, we will create added value through a community-based marketing strategy of"Made in Australia", which we promoted with the COVID-19, to increase our presence inAustralian society.
As the only battery manufacturer in Australia, we will continue to pursue the path of local
production for local consumption.

24