Initiatives for Strengthening
Competitiveness for Sustainable Growth
October 31, 2018

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

Business Environment and Direction of Initiatives
Automotive Industry

Time of major changes once in 100 years
Environmental
regulations

Technologicalinnovation

Change in users’ needs
and values

I Electrification(1) Improving lineup of electrified products(2) Establishment of joint venture(Electric Driving module /Integrated ECU)

AutomatedII driving• Vehicle Dynamics Control• Automated Valet Parking, Driver Monitoring SystemConnectedcars• Hospitality Services (Example: Smart Door Safety Function)• Local Contribution Measures (Example: Shared transportationservice)

Reinforcing
III foundation(3) Business structural change

Explained
today

Direction of initiatives

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I Electrification(1) Improving lineup of electrified products

Forecast of Global Market Trend of Powertrain
Pattern 1

Pattern 2

Pattern 3(Ratio of EVs in 2030: 10%)

(Ratio of EVs in 2030: 20%)

(Ratio of EVs in 2030: 30%)

(10 million units)(10 million units )(10 million units)

eAxle/
102-motor
HY

10% BEV/FCEV
20% BEV/FCEV
101030%BEV/FCEVStrong HEVStrong HEVStrong HEV

1-motorHybrid/AT0'17 '20 '25 '30

Mild HEV

Mild HEV

AT/CVT

AT/CVTDCTMT

DCT(FY)MT

0'17 '20 '25 '30(FY)

Mild HEV
AT/CVTDCT0MT'17 '20 '25 '30 (FY)Market for the Automatic Transmission-based powertrains does not change
drastically regardless of the changes in the ratio of EVs in 2030.
2/15

I Electrification(1) Improving lineup of electrified products
We will advance product development omnidirectionally by utilizing thetechnological bases which were developed for Automatic Transmission
and the 2-motor Hybrid transmission.
MarketProduct lineup
Status of development

Strong HEVElectrified vehicle

BEV・FCEVeAxle
eAxle

PHEV・
HEV

Being developed
Being mass produced/ Being developed

2-Motor HybridTransmission

Being mass produced

1-Motor Hybrid
Transmission

Start of mass production isslated from Jan. 2019

Mild HEVAT

Being considered

Gasoline-powered
vehicle, etc.

AT

Being mass produced
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I Electrification(1) Improving lineup of electrified products

We will provide the products for major four fields forelectrification of vehicles.

1. Electric driving module
2. Electric pumps
3. Cooperative regenerative brake system

4. Lightweighting

4/15

I Electrification(1) Improving lineup of electrified products
1. Electric driving module

1-Motor Hybrid Mounted on Groupe PSA’s DS7 CROSSBACK(PHEV model)
Transmission
Paris Motor Show

(Press conference at Paris Motor Show)(Aisin Group’s booth)
5/15

I Electrification(1) Improving lineup of electrified products
1. Electric driving module

eAxle
By combining motors, gearboxes, and power control units (PCUs), we will promote developmentof the products that can be used for various vehicle types from cars to buses and trucks.

MotorGear Box

PCUInline Design
200kW

Integrated
150kW

××=100kW
Offset Design50kW

SeparateeAxle
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I Electrification(1) Improving lineup of electrified products
1. Electric driving module

eAxle
By combining motors, gearboxes, and power control units (PCUs), we will promote developmentof the products that can be used for various vehicle types from cars to buses and trucks.

(Exhibition at Paris Motor Show)
7/15

I Electrification(1) Improving lineup of electrified products
2. Electric pumps▪Cooling/Lubricating motors,PCUs and batteries
Electric waterpump

3. Cooperative regenerative brakesystem▪Preparing two types to respond todifferent vehicle types and needs

Electronically Controlled BrakeSystem

Electric oilpump
Hydraulic booster

GearPump

ABS Modulator
ESC Modulator

4. Lightweighting▪Rough shape materials and chemical
products for high strength andlightweighting→Reducing vehicles’ energy consumption

By wire type

ESC Modulator typeHot stamping Products(Die Quenching)Spray-type
damping coat

8/15

I Electrification
II Automated driving(2) Establishment of joint venture1) Overview of the joint venture for development and sales of driving modules
Transaxle

Production
subcontracting

Joint venture fordevelopment andsales of driving
modules

Powertrain
specification

Automotivemanufacturers

Invested shares

InverterSupply ofcomponents
Motor generator

50％
50％

Sales of driving
modules2) Overview of the joint venture for development of integrated ECU software
Joint venture fordevelopment ofintegrated ECU
softwareConsignment ofdevelopment ofintegrated ECU
softwareSensorInvested shares
65％
25％
5％
5％

SensorSpecification ofsystems forautomated driving,etc.

Supply ofintegrated ECU
softwareBrake
Steering

Automotive
manufacturers

Systems forautomated driving,etc.

9/15

III Business foundation(3) Business structural change - Business reorganization -We will implement business reorganization steadily
Aisin Group

ＭＴBrakeSeatframe

Auto bodycomponent

PistonAisin Seiki
Production ofcontrolled brakeToyotaToyotaAisin
Kirloskar
Philippines Auto Parts

AISIN AI

Exterior/Functional
products

Businessintegration

ADVICS
New Handa Plant

Hosei Brake

Development andproduction of MT

Development andproduction ofcontrolled brakeToyota Motor

DENSO

Seat frame
for Toyota

ToyotaBoshokuDrum brake
ShirokiNisshinbo BrakeBusinessintegration

ART METAL
MFG.

ShirokiAH BrakeToyotaToyotaAutoparts Kirloskar
Philippines Auto Parts

PistonART METAL
MFG.

10/15

III Business foundation(3) Business structural change - Business reorganization - 1

Business integration of AISIN AW and AISIN AI in April 2019
AISIN AIAISIN AWMTAT

Making the “virtual” company
system real and expediting

Transfer

CVT

structural change in an integrated
mannerHybrid Transmission

eAxle
MT
Transfer

Handling all drive units▪Reorganizing and aggregating MT
production→Changing to production of AT andHybrid transmission▪Streamlining duplicated functions.
Improving efficiency. Efficientutilization of MT engineers.

Reinforcing preparations for electrification by
optimizing resources in the powertrain field

11/15

III Business foundation(3) Business structural change - Business reorganization - 2[Brake business] Improving efficiency of development and production systems
and focusing on the growing field
Foundation brake

ADVICS
Brake mastercylinderStreamlining
production

Disk brake(Floating type)Parts for drumbrake

AS Brake
Systems

Hosei Brake(incl. AH Brake)

Electric parking brake (MOC)
Disk brake(Floating type)

Disk brake(Floating type)

Disk brake(Opposite type)

Drum brake
Optimizing incollaboration withAHBrake

AH Brake: Acquired from Nisshinbo Brake in April 2018

Improving
efficiency ofdevelopment

Integrating the drum brake development systems ofADVICS, Hosei Brake, and AH Brake and shifting
the streamlined human resources to developmentof electric parking and control brakes.

Electric parking
brake
(MOC)

12/15

III Business foundation(3) Business structural change - Business reorganization - 2

We will achieve further growth by responding securely to the demands
for control brakes and electric parking brakes that are expected to grow.
ADVICS Handa Plant is expanded for increaseof the control brake production capability.

Sales goal of Brake Business(%)(100 million yen)

Expanded area:
61,600m2

8Control7
brakes/Electric6parking
5
brakesExisting plant area

5,865 5,794

Expanded area
(Conceptional drawing)

Profit ratio

4※Start of operation in the expanded area isslated for Mar. 2019.
※Transfer of production from DENSO isplanned to complete before the end of2020.

3
2.82

2017 2018

(FY)

1.7

(Results)

Cooperative regenerative brakesystemESC

12020

2025

013/15

III Business foundation(3) Business structural change - Enhancing collaboration andimproving efficiency ・Unification of sales activities in China

Strengthening
the VC system(Breaking down thewalls of organization)(Sale of other products by using the sales routes for AT)

・Aftermarket VC
・Unifying the administration functions into the Group’s
head office

Selection fromexisting products andintensive investment

・Shifting resources from the unprofitable businesses to
the growing businesses
Taking into consideration the products’
competitiveness, market size, and yieldability
・Increasing sales of the power sliding doors
・Intensive investment of resource in the products withthe biggest and second biggest market shares

Improving efficiencyof business
operations

・Improving productivity by utilizing the IoT and AI in theproduction lines
・Increased utilization of RPA in offices and engineering
departments

Scrap & build workwith no exceptions

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III Business foundation

Improving productivity by utilizing the IoT in the production lines

Achieving outstanding quality and productivity and securing customers’ trust
Introducedbases[Now][End of FY 2018]27 bases→ 46 bases(14 domestic + 13
overseas bases)[Final goal](14 domestic and 32
overseas bases)→ 120 bases<<Batch monitoring of operations>>
1) Visualization of operationalsituations
2) Failure prediction. Prevention ofoccurrence of failures.
(No stoppage due to malfunction.
No defectives.)[Expected effects]
20% increase in output
50% reduction in Discarded
defectives
80% reduction Long-hour
stoppage due to malfunction
20% reduction inmaintenance and inspection
staff

Domestic and overseas production bases

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